Supreme Court Decision – Exclusive Remedy

On August 23, 2018, the California Supreme Court held in King v. Comppartners, Inc. et. al. (2018) that a utilization review doctor stands in the shoes of the employer while performing duties within the scope of the workers’ compensation scheme and thus may not be sued in tort unless the act falls outside of what is encompassed within the compensation bargain.

In this case a UR doctor denied continuance of a prescription for Klonopin without authorizing a weaning regimen or warning the applicant of possible side effects of abruptly ceasing the medication. The applicant ceased taking the medicine and alleged that he suffered four seizures as a result. The applicant filed a civil lawsuit against the UR entity Comppartners, the reviewer Dr. Sharma and others. The defendants filed a demurrer asserting that the Workers’ Compensation Act (WCA) provides an exclusive remedy for injuries arising out of employment and that Dr. Sharma did not owe a duty of care to the applicant. The trial court agreed and sustained the demurrer and the Court of Appeal affirmed the order.

The Supreme Court reviewed the case in light of the following questions:

  1. Are the injuries alleged covered by the Workers’ Compensation Act exclusive remedy?
  2. Are the defendants entitled to the protection of the Workers’ Compensation Act in the way that an employer is entitled to protection against tort damages?

The Supreme Court stated that injuries collateral to or derivative of work related injuries are covered by the exclusive remedy doctrine including injuries stemming from the workers’ compensation claims process. The court found that “King’s injury arose out of and in the course of utilization review – a statutorily required part of the workers’ compensation claims process to which he would not have been subject had he not suffered a work-related back injury. The injury is thus compensable under the WCA.” The court further stated that Dr. Sharma’s decision to decertify and the manner in which he communicated that decision falls within the scope of the statutory process, is therefore derivative of the industrial injury and thus arises out of King’s employment for purposes of the exclusive remedy doctrine.

The Supreme Court acknowledged that the WCA is a comprehensive statutory scheme requiring employers to engage in UR and held that UR reviewers stand in the shoes of the employer when they perform statutorily required functions. Accordingly they are protected from tort suits arising out of the workers’ compensation claim process.

When an act is deemed “so extreme and outrageous that the defendant in effect stepped out of its role as contemplated by the workers compensation scheme”, the exclusive remedy does not apply. The court noted that the exception was not met in this case and stated that an allegation of mistake alone is not sufficient to meet the exception.

What this means for you:

This decision protects certain parties engaged in the statutorily mandated utilization review scheme. Penalties contained in the Labor Code are available when defendant’s fail to comply with the statutes and rules interpreting the statutes mandating that UR be utilized in determining the reasonableness and necessity of recommended medical treatment. However the immunization of employers, insurers, claims administrators, UR organizations and UR physicians does not mean that strict compliance with UR statutes and regulations should not be strictly adhered to.

Amanda Rocha, Esq.
Central Coast Office
arocha@gmklaw.com