Brodie: Five Injured Workers Asked the Supreme Court to Change the Apportionment Math. It Said No.

Stan Brodie spent his career as a Contra Costa County firefighter. After a back and knee injury in 2000 and subsequent cumulative trauma, he was 74 percent permanently disabled. Earlier injuries to the same body parts had already been rated at 44.5 percent. The workers’ compensation judge took the difference, 29.5 percent, and awarded him $20,867.50. Four other injured workers had similar fights over a single question: Once part of a disability is assigned to something other than the current injury, how do you turn what is left into dollars? In Brodie v. Workers’ Compensation Appeals Board, 40 Cal.4th 1313 (2007), the California Supreme Court unanimously held that the 2004 reform legislation did not change the answer it gave in 1976. Our separate analysis of Rice covers how the apportionment percentage itself is decided. This article is about what the court did with a repealed statute, and why that mattered to the money.

A firefighter, an amputee and three others

The court described five proceedings with “widely differing facts.” In each, part of the current permanent disability could be attributed to earlier industrial injuries or to nonindustrial causes, and in each the judge applied the old formula because the Appeals Board had ordered it.

• Brodie: the 74 percent and 44.5 percent ratings above.
• Kenneth Dee Welcher: a 1990 conveyor injury rated at 62.5 percent, then an amputation below the right knee from later cumulative injury, stipulated at 71 percent. The judge rounded the difference down to 8 percent and awarded $3,360.
• Jack Strong, a San Francisco engineer with three industrial injuries, and Henry Williams, a United Airlines mechanic whose back rating went from 28 to 43 percent.
• Aurora Lopez, a state employee stipulated to be 100 percent disabled, with 79 percent industrial and 21 percent nonindustrial.

The Court of Appeal split. One panel said the 2004 law had wiped out the old method and adopted its own variation. Another said the old method still applied. The Supreme Court took the cases to resolve the split.

Why the formula mattered

Permanent disability is first expressed as a percentage, then converted to a payout by a table. Until 1972, the table was a straight line: four weeks of benefits for each percentage point. Subtracting percentages and subtracting dollars gave the same answer. In 1971 the Legislature changed the table into a sliding scale, so that benefits per point climbed as disability got worse. The court gave the example of about 30 weeks for a 10 percent disability and about 541 weeks for 90 percent.

After that, the method mattered. Take a worker already 10 percent disabled who is 90 percent disabled after a new injury. “Formula A” subtracts the percentages (80 percent) and looks up the award for that number. “Formula C” starts with the award for 90 percent and subtracts compensation for the earlier 10 percent. The original C used the amount previously paid; the Court of Appeal’s modified C instead valued that earlier disability in current dollars. Because the table is not a straight line, C gives a larger result. The court also mentioned a “formula B,” but no party argued for it.

The money gap was large. In Brodie’s footnote 11, the court said Welcher received $3,360 under formula A but would be entitled to nearly $38,000 plus a life pension (a lifetime payment for severe disability) under the version of C the Court of Appeal adopted, or nearly $68,000 plus a life pension under the original C. Brodie’s just-over-$20,000 award would become $67,700 plus a life pension, or more than $114,000 over his remaining life expectancy. The court used the gap as a clue to intent. A change of this size, it said, “would have dramatic fiscal consequences for employers and insurers (as well as, of course, for employees)” and, if intended, would likely have been remarked upon in the legislative history.

What Senate Bill 899 changed, and what it left alone

The Supreme Court had settled the question in Fuentes in 1976, and the law stood for 28 years. It chose formula A by reading former Labor Code section 4750, which said the employer is liable only for the later injury “as though no prior disability or impairment had existed.” The court described the policy as “encourag[ing] employers to hire the handicapped,” since hiring someone with a prior disability would not raise the cost of a later injury. Courts applied A to both nonindustrial and prior-industrial disability for 28 years.

In 2004, Senate Bill 899 repealed section 4750 and the old section 4663 and enacted a new section 4663 and a new section 4664. The new text says that “[a]pportionment of permanent disability shall be based on causation,” and limits the employer to “the percentage of permanent disability directly caused by the injury.” Doctors must now say what share of the disability each cause produced. The workers’ point was simple: The statute the Supreme Court relied on is gone.

The court agreed that the new text does not say which formula to use. It did not stop there. It asked a different question: Did the Legislature, by changing the language of apportionment, intend a new formula? Its answer was no. The court relied on a presumption that the Legislature does not overthrow long-established principles of law unless it clearly expresses or necessarily implies that intent.

The court’s reasons

The repeal had another job. Under the old law, apportionment by cause was largely barred, and a worker could avoid apportionment to a prior award by proving he had recovered from the earlier injury. The new sections reversed both rules. Those rules were written into sections 4663 and 4750, so repealing those sections was necessary for the reform to work. Because that “alone” explained the repeal, the court said it was unnecessary to imagine a further intent to change the computation, and it invoked Occam’s razor, the idea that the simpler explanation is preferred.

The history said nothing about it. The court looked for any sign that the Legislature meant to change the formula. It found the bill summaries listing many apportionment changes, all about identifying the percentage, none about converting it to dollars. “Instead, one hears only silence.” A change with this fiscal weight, the court said, “would likely have been remarked upon.”

The bill was an urgency measure aimed at what the court called a perceived crisis in skyrocketing costs. The Legislature’s own urgency clause spoke of “the current workers’ compensation crisis.” The court found it unlikely that the Legislature adopted a more expensive formula without a word. It also noted that the benefit-expanding parts of the bill were each mentioned in the history.

Formula C no longer fit. For two successive injuries, C has intuitive appeal, because a 60 percent disabled worker always ends with the table value for 60 percent. But when causes act together, the court explained, there is no “first” 30 percent and “second” 30 percent. Charging the employer for the upper, more expensive range would have “no logic or equity.” The court also saw no sign that the Legislature wanted a new formula for only some apportionment cases.

The Board’s view got weight. The Board had held in Nabors I that formula A survived. The court said it gives weight to the Board’s reading unless clearly erroneous, and here the conclusion “was not clearly erroneous and is entitled to deference.”

The argument for the workers

The strongest argument was the one the Courts of Appeal in Dykes, Nabors II and the Brodie panel accepted, in the court’s summary. The repeal showed an intent to change apportionment law. The new language did not dictate a method. Labor Code section 3202 requires doubts to be resolved in favor of benefits. So the most generous formula, C, should win.

The court answered at the first step. It agreed that wholesale changes in language generally signify an intent to change existing law, and that “the Legislature did intend to significantly alter the law of apportionment . . . .” But the change was to how the percentage is identified, not to how it becomes dollars. Because the court could discern the Legislature’s intent through other means, it had no need for the liberal-construction rule, which it called “a tool for resolving statutory ambiguity where it is not possible through other means to discern the Legislature’s actual intent.”

The court summed up the rule this way: “[A] 30 percent disability is a 30 percent disability, not a 90 minus 60 percent disability or a 60 minus 30 percent disability.” The table compensates the current injury only. It disapproved Dykes and Nabors II to the extent they conflicted. It affirmed the judgment in Welcher (covering Welcher, Strong, Lopez and Williams) and reversed and remanded in Brodie.

What the decision means

The court took as a given that each worker had some disability properly apportioned to the current injury. It decided how to convert that apportioned portion into dollars, not how the percentage was found.

• For lawyers: Brodie is a model of how the court treats a repeal. Where a repeal is fully explained by a new rule the Legislature did adopt, the court treated the repeal alone as weak evidence of a further change. If you argue that a reform changed something it did not mention, expect to be asked for a trace in the history.
• For workers: The fight is mostly over the percentage. Once it is set, the table’s sliding scale works on that number alone. A second injury does not get the benefit of the steeper part of the table because earlier injuries pushed total disability higher.

For help with an apportionment dispute, see our California workers’ compensation practice.