NEW STATUTORY ENACTMENT

February 12th, 2009

Governor Granholm has signed new legislation amending Section 845 of the Michigan Worker’s Disability Compensation Act (WDCA).  This legislation became effective on January 13, 2009.  Prior to this amendment, Section 845 provided the following:

Sec. 845.  The bureau shall have jurisdiction over all controversies arising out of injuries suffered outside this state where the injured employee is a resident of this state at the time of injury and the contract of hire was made in this state.  Such employee or his dependents shall be entitled to compensation and other benefits provided by this act.

Following the amendment, Section 845 now provides the following for Applications for Mediation or Hearing filed on or after January 13, 2009:

Sec. 845. The worker’s compensation agency shall have jurisdiction over all controversies arising out of injuries suffered outside this state if the injured employee is employed by an employer subject to this act and if either the employee is a resident of this state at the time of injury or the contract of hire was made in this state. The employee or his or her dependents shall be entitled to the compensation and other benefits provided by this act. [emphasis added].

On its face, this amendment adds a requirement of having the Claimant’s employer being subject to the act, but, by replacing the word “and” with “either” the amendment makes it easier for Claimant’s to assert jurisdiction in Michigan.  In other words, prior to the amendment, those Claimant’s employed by Michigan-based companies who were injured out-of-state, normally qualified for workers’ compensation benefits under the law of the state in which they were injured.

The amendment to the Section 845 of the WDCA makes it easier for such Claimants to also qualify for Michigan statutory workers’ compensation benefits. Under the amended Section 845, a Claimant may elect to receive benefits from one or both states.

However, it should be underscored that Michigan law provides that a Michigan-based employer is entitled to a credit for those benefits received from another state against the benefits a Claimant may receive under Michigan law.

In effect, the amendment to Section 845, supercedes the Michigan Supreme Court’s ruling in Karaczewski v Farbman Stein & Co 478 Mich 28 (2007).  In Karaczewski, the Court held that the WDCA should be strictly construed to require that a Claimant prove that the contract of hire was entered into in Michigan and that the employee was a resident of Michigan at the time of injury in order for the Claimant to recover worker’s compensation benefits from a Michigan employer.

A link to the actual executed legislation can be found at the following web address:
http://www.legislature.mi.gov/documents/2007-2008/publicact/pdf/2008-PA-0499.pdf

WC CALCULATIONS

January 13th, 2009

2009 Calculation Program
Version 10.0

Version 10.0 of the calculation program is now available. This includes rates for the year 2009. This is still a single user system. Please do not attempt to install in a networked environment and make accessible by more than one user, as both calculation and program errors will occur.  This application is also not supported in a Windows NT or Citrix environment. Click here  Calculation Program Help Manual to view the help manual which includes instructions on installing this program. It may be helpful to print these instructions before continuing. If you have a previous version of this program on your PC, it must be uninstalled first. Once you have printed and read the install instructions, click here setup.exe to download the new version to your computer. You MUST save this file to your hard drive and install it from there. The file size is almost 13MB, so it may take a few minutes depending upon the speed of your connection.  If you wish to install this program on more than one computer, you can save the setup.exe file to any external media (i.e., flash drive, CD, etc.).If you do not have internet access, you may obtain this program on CD-ROM. If you would like a copy, please send a letter to Sandra Adams at the Workers’ Compensation Agency, P.O. Box 30016, Lansing, Michigan 48909 . The letter must be accompanied by a padded, stamped ($1.65 worth of postage), self-addressed mailer at least 7″ x 9″ in size.

CASE OF THE MONTH (JANUARY)

January 1st, 2009

Brown v Cassens Transport Co., 6th Circuit Court of Appeals (Docket No. 05-2089, Opinion issued and recommended for publication on October 23, 2008)
In this important case relating to workers’ compensation in Michigan, the Plaintiffs were current or former employees of Cassens Transport, Inc. who submitted worker’s compensation claims to Cassens based on workplace injuries they had alleged to have each sustained. On June 22, 2004, the plaintiffs filed a complaint raising Racketeer Influenced and Corrupt Organization (RICO) claims and Intentional Infliction of Emotional Distress (IIED) claims against the defendants. In their complaint, the plaintiffs alleged that Cassens, which was self-insured for purposes of paying benefits under the Worker’s Disability Compensation Act (WDCA), contracted with Crawford & Company to serve as a claims adjuster for the worker’s compensation claims of Cassens’s employees. They further pleaded that Cassens, Crawford, and Dr. Saul Margules, as well as other “cut-off” doctors, engaged in a pattern of racketeering activity that denied the plaintiffs’ worker’s compensation claims. Specifically, the plaintiffs alleged that Cassens and Crawford deliberately selected and paid unqualified doctors, including Dr. Margules, to give fraudulent medical opinions that would support the denial of worker’s compensation benefits, and that defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims.  Id.

The district court granted the defendants’ motion to dismiss pursuant to Rule 12(b)(6) on July 15, 2005. The plaintiffs filed a timely appeal. A majority of the 6th Circuit panel affirmed the dismissal on the ground that plaintiffs failed to plead that they relied on misrepresentations by defendants. The U.S. Supreme Court, however, granted plaintiffs’ petition for a writ of certiorari, vacated the 6th Circuit’s judgment, and remanded the case to us for reconsideration in light of the decision in Bridge v Phoenix Bond & Indemnity Co., 128 S. Ct. 2131 (2008), which held unanimously that a civil-RICO plaintiff does not need to show that it detrimentally relied on the defendant’s alleged misrepresentations.
On remand, the 6th Circuit held:

(1)    Thirteen predicate acts with the same purpose (to reduce Cassens’s payment obligations towards worker’s compensation benefits by fraudulently denying worker’s compensation benefits to which the employees are lawfully entitled) constituted a pattern of racketeering activity for a RICO claim, regardless of whether injury to each worker independently consisted of a pattern of racketeering activity;

(2)    Relationship-plus-continuity standard for establishing pattern of racketeering activity was satisfied by allegations as each of the plaintiffs has also sufficiently pleaded that they were injured by the defendants’ “pattern of racketeering activity” under 18 U.S.C. §§ 1964(c) because the defendants’ fraud deprived the plaintiffs of worker’s compensation benefits and caused them to incur attorney fees and medical care expenses;

(3)    The injured workers were not required to plead or prove reliance on misrepresentations;

(4)    The worker’s allegations were sufficient to satisfy proximate causation requirement for civil RICO claim because the defendants’ fraudulent acts were a “substantial and foreseeable cause” of the injuries alleged by the plaintiffs: the deprivation of their worker’s compensation benefits and expenses for attorney fees and medical care;

(5)    The Michigan worker’s compensation statutes did not reverse preempt RICO under McCarran-Ferguson Act because RICO would not “invalidate, impair, or supersede” the WDCA or frustrate the goal of the state law to punish the improper denial of benefits if it was part of racketeering activity, and because worker’s compensation benefits are not a form of insurance; however

(6)    The denial of workers’ compensation benefits by the defendants was not sufficiently outrageous to support claim for intentional infliction of emotional distress.  Id.

In light of these holdings, the 6th Circuit Court of Appeals reversed the dismissal of plaintiffs’ RICO claims and remanded the case back to the district court for further proceedings consistent with the panel’s opinion. However, the Court affirmed the dismissal of the plaintiffs’ IIED claims.

Workers’ Compensation Litigation Forms

October 29th, 2008

In an effort to assist our clients, we have placed links here to locate specific litigation documents at the Michigan Workers’ Compensation Agency. Clicking on a link below will cause you to navigate away from this site briefly in order to open or download the PDF form from the WCA site. To ensure the most current versions of form, you may wish to visit WCA directly. (This link will open in a new window.)

-WC-104A (2/04) – Plaintiff’s Application for Mediation or Hearing

-WC-104B (4/06) – Health Care Services Application for Mediation or Hearing (fill-in form)

-WC-104C (4/05) – Defendant’s Application for Mediation or Hearing

-WC-105 (8/08) Work History, Work Qualifications & Training Disclosure Questionnaire (fill-in form)

-WC-113 (1/04) – Redemption Order (fill-in form)

-WC-113A (8/05) – Multiple Carrier Redemption Form (fill-in form)

-WC-115 (5/05) – Voluntary Payment Form (fill-in form)

-WC-119 (8/05) – Affidavit in Support of Redemption (settlement) Agreement (fill-in form)

-WC-251 (8/05) – Carrier’s Response (fill-in form)

-WC-262 (4/05) – Claim/Cross-Claim for Review (fill-in form)

-WC-508 (2/07) – Subpoena for Production of Records (and/or) Witness Subpoena (fill-in form)

-WC-544 (7-05) – Worker’s Settlement Statement (fill-in form)

-WC-556 (5/05) – Agreement to Redeem Liability (fill-in form)

Self-Insured Forms

October 29th, 2008

In an effort to assist our clients, we have placed links here to locate specific claim documents pertaining to Self-Insured companies at the Michigan Workers’™ Compensation Agency. Clicking on a link below will cause you to navigate away from this site briefly in order to open or download the PDF form from the WCA site. To ensure the most current versions of form, you may wish to visit WCA directly. (This link will open in a new window.)

-WC-402 (7/04) Self-Insurer Application Packet

-WC-402A (2/06) Self-Insurer Request to Add or Delete Subsidiary/Affiliate (fill-in form)

-WC-402G (8/05) Group Self-Insurer Application Packet

-WC-402GR (1/04) Group Self-Insurer Application (fill-in form)

-WC-404 (1/04) Service Company Application (fill-in form)

-WC-650 (3/05) – Self-Insured Group Notice of Acceptance of Membership (fill-in form)

-WC-651 (3/05) – Notice of Termination of Membership (fill-in form)

-Letter of Credit/Memorandum of Understanding (8/08) (fill-in form)

-Michigan Continuous Surety Bond (12/03)

-Michigan Certificate of Specific/Aggregate Excess Liability Insurance (1/04)

-Self-Insurer’s Claims Transfer Agreement

The Impact of the Stokes Decision

October 29th, 2008

In the recent decision of Stokes v Chrysler LLC, 481 Mich 266 (2008), the Michigan Supreme Court set up a multi-step test which plaintiffs must meet to establish disability.

(1) plaintiff must disclose all prior qualifications and training, which include educational skills, experience and training;
(2) Plaintiff must consider other jobs that pay his/her maximum pre-injury wage to
which his/her qualifications and training translate;
(3) Plaintiff must be able to establish the work injury prevents the performance of any of the jobs identified as being within his/her qualifications and training;
(4) If plaintiff is capable of performing some or all of those jobs, plaintiff must show he/she cannot obtain any of those jobs; and
(5) Plaintiff must make a good faith effort to procure post-injury employment if there are jobs at the same salary or higher that he/she is qualified to perform and plaintiff’s work-related injury does not preclude performance. Plaintiff will also have to demonstrate a good faith effort to obtain employment and present proof the injury would preclude the type of work which any of the available jobs would require.

Once plaintiff establishes all of the above factors, defendant/employer then has the burden of presenting evidence there were jobs within plaintiff’s qualifications, training and physical limitations that were reasonably available and which would have allowed plaintiff to earn his/her “maximum wage.” These proofs will generally require the use of a vocational rehabilitation expert to perform an assessment with job search activities, as well as personally interview plaintiff to determine the necessary information to perform the assessment and job search activities. The decision does establish the right to such a vocational interview.

If the defendant presents evidence which indicates there are jobs available for plaintiff within his/her qualifications, background and training, then plaintiff would have the opportunity to present additional vocational evidence, potentially in the form of their own vocational counselor.

Overall, the impact of the Stokes decision will obviously depend on the specific facts in each case and Plaintiff’s qualifications, background and training, as well as the level of wages being earned with the employer. The decision will have a greater impact on cases involving low wage earning employees since the burden of establishing the inability to obtain work at minimum paying jobs will be quite difficult.

If you have any questions regarding the impact of this decision on any claims please feel free to contact Grzanka Grit McDonald.

Workers’ Compensation Claim Forms

October 29th, 2008

In an effort to assist our clients, we have placed links here to locate specific claim documents at the Michigan Workers’ Compensation Agency. Clicking on a link below will cause you to navigate away from this site briefly in order to open or download the PDF form from the WCA site. To ensure the most current versions of form, you may wish to visit WCA directly. (The link will open in a new window.)
-WC-100 (10/05) – Employer’s Basic Report of Injury (fill-in form)

-WC-106 (7/05) – Supplemental Report of Fatal Injury (fill-in form)

-WC-107 (11/04) – Notice of Dispute (fill-in form)

-WC-108 (9/04) – Application for Advance Payment (fill-in form)

-WC-110 (3/05) – Report on Rehabilitation (fill-in form)

-WC-114 (8/05) – Application for Reimbursement from the Compensation Supplement Fund (fill-in form)

-WC-117 (9/05) – Employee’s Report of Claim (fill-in form)

-WC-500 (6/08) VR Provider Professional Disclosure Statement

-WC-701 (9/05) – Notice of Compensation Payments (fill-in form)

-Need to Know How to Complete a Form 701?

-WC-728 (8/05) – Amputation Chart