Supreme Court Rules in Favor of COLAs in Labor Code Sec.4659(c) Starting At Latest Date Possible in Baker v. WCAB (X.S.)
August 11, 2011
The California Supreme Court, in a refreshing, unanimous display of good sense prevailing over literalism, has very clearly ruled that the Legislature's intent in creating Labor Code §4659(c), for injuries after January 1, 2003, was for cost-of-living adjustments (COLAs) to be "calculated and applied prospectively commencing on January 1 following the date on which the injured worker first becomes entitled to receive, and actually begins receiving [the designated benefits], i.e., the permanent and stationary date in the case of total permanent disability benefits, and the date on which partial permanent disability benefits become exhausted in the case of life pension payments."
Calculations based upon this decision are the most favorable they could be for defendants.
The opinion, prepared by Justice Baxter and concurred in by the six other Justices, explodes the Sixth District's controversial holding in Duncan (now Baker) v. WCAB (X.S.), [the superseded opinion appearing at 37 CWCR 269, 74 CCC 1427], which had held that the cost of living adjustments (COLAs) for workers injured after January 1, 2003 and suffering either a disability entitling them to a life pension or to permanent total disability were to be calculated from January 1, 2004, regardless of the date of injury, thus protecting untold unborn and as yet uninjured California workers from the ravages of as yet unexperienced inflation. Insurance underwriters were said to have gone into catatonic fits at the prospect of calculating premiums based on such a ruling.
The court approved the position argued by petitioner Subsequent Injuries Benefits Trust Fund (SIBTF) and gave short shrift to the argument of applicant and the CAAA.
According to the court's holding, in a permanent total disability case, the COLA would become operative as January 1 of the year following the permanent and stationary date of the injury causing 100% disability. There will doubtless be litigation on when the permanent and stationary date was achieved and temporary total disability slid into permanent total disability, but that is what the Board is here for. Calculations are much clearer when it comes to life pensions. The COLA escalator will not begin until January 1 of the year following the end of permanent disability payments and the beginning of the life pension payments.
The court lamented the somewhat turgid prose of Sacramento's solons, ending its opinion with a gentle scold, "The current text of section 4659(c)'s second sentence is no model of clarity. Perhaps the Legislature may wish to revisit the suitability of the current language of the second sentence of subdivision (c) in light of the operative language of the first sentence."
The Supreme Court's opinion is clear and leaves the turgidity of the Legislature's effort, abetted by the Sixth District, in the rearview mirror.
By: Barry Lesch, Oakland
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