Employment Client Alert: Cannon Decision Blasts Broader Hole In Rating Constraints

In City of Sacramento v. Worker’s Compensation Appeals Board and Arthur Cannon, No. CO72944, published January 15, 2014, (Cannon), the Third District Court of Appeal determined that the WCAB properly endorsed an impairment rating based on the subjective complaints of the injured employee in analogy to another physical condition in the American Medical Association Guides to Evaluation of Permanent Impairment (AMA Guides).

Arthur Cannon was diagnosed with plantar fasciitis that was held to arise out of his work for the City of Sacramento. The examining physician found that “other than some tenderness, no objective abnormalities were identifiable” in Cannon’s condition. As a result, the doctor was unable to associate the symptoms with any permanent impairment “from a strict interpretation of the AMA Guides.” The 2004 workers’ compensation reforms mandated that the AMA Guides be used to calculate permanent impairment after January 1, 2005 (Lab. Code § 4660, subd. (b)(1).) Since no direct description of impairment exists in the Guides for pain, the examining physician rated Cannon’s condition “by analogy” to “a gait derangement abnormality” (a limp) for which the AMA Guides provides a calculated whole person impairment. In doing so the doctor relied on the WCAB’s Almarez/Guzman decision, which opened the door to rating by analogy. ((2009) 74 Cal.Comp.Cases 1084; see Milpitas Unified v. WCAB (2010) 187 Cal.App.4th 808 [approving Almarez/Guzman].) Based on the analogy to a limp, Cannon was described as remaining with a “7% whole person impairment.”

After trial, the workers’ compensation judge agreed with the City’s argument that rating by analogy under Almarez/Guzman is proper only if the condition is characterized as “complex or extraordinary.” The judge determined Cannon’s injury was not, and issued a finding that Mr. Cannon had no permanent disability. On Cannon’s petition, the WCAB overturned the judge’s decision, and the City sought a writ of review.

The Court of Appeal affirmed the WCAB. It rejected the City’s argument that rating by analogy was not permitted when the sole residual of an industrial injury is subjective complaints. Quoting Milpitas, the Court reasoned “if the Legislature had intended to require [objective abnormalities in all cases] ‘it would have used different terminology to compel strict adherence to the[e] criteria [in the AMA Guides] for every condition.’” Instead, section 4660 requires merely that California’s disability rating schedule “incorporate” the AMA Guides. (Subd. (b)(1).) That does not require a doctor to use the Guides as a “mechanical application without regard to how accurately and completely [the Guides] reflect the actual impairment ….”

The Court also rebuffed the City’s argument that rating by analogy is permissible only in “complex or extraordinary” cases. The Court interpreted those terms used in Milpitas to mean “syndromes that are ‘poorly understood and are manifested only by subjective symptoms[.]’” As such, it was precisely because Cannon’s symptoms manifested only subjectively that they were properly rated by analogy. The Court emphasized that “the AMA Guides ‘call[] for the physician’s exercise of clinical judgment to assess the impairment most accurately.’” (Quoting Milpitas, supra, 187 Cal.App.4th at p. 823.) It concluded the examiner had assessed Cannon’s consistently with that direction.

Cannon further deviates from the goal of achieving the level of “consistency, uniformity, and objectivity” many hoped would arise from California’s 2004 adoption of the AMA Guides.

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January 21, 2014