Court Does Procedural/Substantive Two-Step in Lozano

On May 13, 2015, the Court of Appeal, Second Appellate District, opined in Cynthia Lozano v. WCAB (B258000) that a 2009 amendment to Labor Code section 3212.1 may be applied retroactively to an injurious exposure which occurred before the statute was amended, because the legislative change was procedural and not substantive.

William Lozano worked as a fire engineer at a Department of Defense installation for Pyramid Services when he developed stomach cancer which caused his death on September 20, 2007. Mr. Lozano left three dependents who filed a claim for benefits. The parties utilized an Agreed Medical Evaluator (AME) who determined that Mr. Lozano was “exposed to known carcinogens at work, but was not aware of a specific established link between those carcinogens and stomach cancer.” The AME added that the cancer would be occupational if the statutory presumption in favor of fire fighters under California Labor Code section 3212.1 applied to Lozano’s case. The WCAB determined that the presumption did not apply and that Lozano failed to meet the burden of proof that the injury arose out of and occurred in the course of employment.

Labor Code section 3212.1 was amended in 2008 to provide a presumption of occupational injury in favor of a firefighting member of a fire department who, when working at a United States Department of Defense installation, is diagnosed with cancer as a result of exposure to a known carcinogen while in service to the department. Prior to 2008, the long existing presumption in favor of California firefighters did not apply to Department of Defense installations. When the statute was amended, it did not include language specifying that it applied retroactively. A tenet of statutory interpretation holds that a statute creating a new right or benefit is presumed to apply prospectively, unless the legislature expressly provides for retroactive application or the statutory purpose is served only with retroactive application. However, statutes that impose procedural changes are interpreted to have retroactive effect in the absence of an expressed legislative intention to the contrary.

In Lozano, the court was not dealing with a new statute, but with an the amendment of an old statute. The employer argued that the amendment extended a new right and must therefore be seen as substantive. The claimant argued that the change was only a procedural modification. The Court of Appeal determined that statutory changes which result in legal consequences are substantive, while changes which modify the procedures for determining the legal significance of past events are procedural. The court concluded that the amendment to Labor Code section 3212.1 did not change the test of liability for firefighters, but reallocated the burden of producing evidence on the issue of injury arising out of and occurring in the course of employment.

The Lozano decision demonstrates once again that in the absence of clear legislative directions, the courts must step in to interpret words that are susceptible of many definitions. In workers’ compensation cases the courts’ interpretation will more often than not favor the extension of benefits in keeping with the social purpose of the workers’ compensation system.

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June 4, 2015