AMA Guides, 6th Edition Found to be Unconstitutional as Applied to Pardo
Kansas Court of Appeals Rules the 6th Edition of The AMA Guides is Unconstitutional as to Francisco Pardo
On Friday, June 1, 2018, the Kansas Court of Appeals published its decision in Francisco Pardo v. UPS. This case had been the subject of great scrutiny, as the issues raised challenged the very constitutionality of the Kansas Workers Compensation Act.
Mr. Pardo suffered a rotator cuff injury in 2013 in a work-related accident. In March 2015, he injured the same shoulder in a separate work-related accident. The second injury was not related to the first injury and involved a different part of the rotator cuff than was previously injured.
January 1, 2015 was the effective date of the change from the 4th Edition of The AMA Guides to the Evaluation of Permanent Impairment to the 6th Edition. The change was somewhat of a surprise to practitioners, who did not bargain for the change when the Kansas Workers Compensation Act was subject to widespread revision, effective May 15, 2011. The change to the 6th Edition was regarded as a favorable development for employers and insurers, as the ratings tend to be lower than those provided for by the earlier edition of The Guides. Some have argued that the change to the 6th Edition, coupled with the changes included in the May 15, 2011 amendments to the Act went too far and upset the bargain struck when the Kansas Workers Compensation Act was first codified.
Some history may be helpful here. Prior to the establishment of the Kansas Workers Compensation Act, the common law provided a remedy for an injured worker to sue his or her employer in district court. The worker would have to prove negligence on the part of the employer and common law defenses such as assumption of the risk and the fellow-servant doctrine would apply. The Kansas Workers Compensation Act represented a delicate bargain between employers and employees. While employers would give up certain common law defenses, including arguing fault on the part of the injured worker, the employer would be granted the benefit of benefits caps and that the claimant would have no right to sue the employer in district court. This is known as the exclusive remedy provision.
The employee, on the other hand, would lose the right to recover greater and more diverse categories of damages in district court, but would be provided an avenue of recovery regardless of the employee’s own fault. Also, as the Act required employers to purchase insurance and provided for a safety net in the form of the Kansas Workers Compensation Fund, the injured worker could be assured that he or she would not have to try to recover for injuries against a judgment proof (bankrupt) employer.
The loss of that common law right to a trial by jury is only balanced, according to the Kansas Constitution, by the provision of an adequate substitute remedy. In the context of workers compensation, that remedy is a robust workers compensation act that provides a meaningful way of recovering for an injury sustained at work.
Because the application of the 6th Edition of The Guides to Mr. Pardo denied him any recovery for permanent partial disability to his shoulder, the Court of Appeals found that the Act unconstitutionally stripped him of his common law right to a jury trial. The Act did not provide an adequate substitute remedy for him. The Court of Appeals then considered the remedy. It could have found the entire Act to be unconstitutional, as applied to Mr. Pardo, but this could open the proverbial floodgates of litigants being allowed to sue their employers in district court. The exclusive remedy of the Act would be in jeopardy. Instead, the Court of Appeals simply struck the portion of the Act that went too far as against Mr. Pardo and found that his injury would have to be evaluated using the 4th Edition of The Guides. For him, the Act reverted to the version that did not represent a constitutional violation to him.
While the holding in Pardo was limited to Mr. Pardo, it certainly will invite other workers compensation claimants to argue that the use of the 6th Edition of The Guides represents a constitutional tipping point whereby the Kansas Workers Compensation Act no longer reflects a fair bargain for the deprivation of a common law right to sue employers in district courts. To date, no review has been sought by UPS to the Kansas Supreme Court. If no appeal is taken, the decision will be final and precedential. Even if appealed, the rationale used by the Court of Appeals can be expected to be echoed in many cases until the ultimate decision is reached. It is unclear at the time of this writing whether the 6th Edition will survive scrutiny when applied to an accident in the absence of a prior injury precluding benefits in the instant claim. The primary rationale of Pardo would certainly be absent, but the use of the 6th Edition does, as already mentioned, tend to abridge benefits workers would have received if the 4th Edition had been utilized.
If you have any questions about the implications of this decision or any other issue regarding the Kansas Workers Compensation Act, the Wallace Saunders Workers Compensation Practice Group would be happy to assist you.
Ryan D. Weltz
For the Firm