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Pennsylvania AFL-CIO v. Commonwealth

Commonwealth Court of Pennsylvania

October 11, 2019

Pennsylvania AFL-CIO, by its Trustees ad litem, Richard W. Bloomingdale and Frank Snyder, Petitioners
v.
Commonwealth of Pennsylvania, Governor Tom Wolf, in his official capacity; W. Gerard Oleksiak, Secretary of the Department of Labor and Industry, in his official capacity, Respondents

          Argued: September 10, 2019

          BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge

          OPINION

          RENÉE COHN JUBELIRER, JUDGE

         Before this Court in its original jurisdiction are the Preliminary Objections (POs) of the Commonwealth of Pennsylvania, Governor Tom Wolf, in his official capacity, and W. Gerard Oleksiak, Secretary of the Department of Labor and Industry, in his official capacity (together, Commonwealth), to the Petition for Review in the Nature of a Request for Declaratory Relief and Preliminary and Permanent Injunctive Relief (Petition for Review) filed by the Pennsylvania AFL-CIO, by its Trustees ad litem, Richard W. Bloomingdale and Frank Snyder (PA AFL-CIO). In the Petition for Review, PA AFL-CIO asserts that Section 306(a.3) of the Workers' Compensation Act[1] (Act), which provides for impairment rating evaluations (IRE) and was enacted by the General Assembly and signed by Governor Wolf in 2018, violates article II, section 1 of the Pennsylvania Constitution[2] because it constitutes an unlawful delegation of the General Assembly's legislative authority. Also before the Court is the Application to Intervene of the Leaders of the Pennsylvania House of Representatives (Application)[3] filed pursuant to Pennsylvania Rule of Civil Procedure 2327(4), Pa.R.C.P. No. 2327(4). House Leaders assert they have a legally enforceable interest that may be affected by the resolution of the Petition for Review and should be allowed to intervene to protect that interest.

         Our Supreme Court found Section 306(a.2), the predecessor to Section 306(a.3), unconstitutional under article II, section 1 in Protz v. Workers' Compensation Appeal Board (Derry Area School District), 161 A.3d 827 (Pa. 2017) (Protz II). Before the Court is the Commonwealth's demurrer to PA AFL-CIO's claim that Section 306(a.3) suffers from the same constitutional infirmity. Having carefully reviewed the Petition for Review, the POs, and our Supreme Court's decision in Protz II, we conclude PA AFL-CIO has not stated a legally sufficient claim under article II, section 1, and, therefore, we sustain the Commonwealth's POs, dismiss the Petition for Review, and dismiss the Application as moot.

         I. Background

         A. Section 306(a.2) of the Act

         In 1996, the General Assembly enacted Section 306(a.2) of the Act, [4] which allowed employers to require workers' compensation (WC) claimants to undergo an IRE, during which a physician would determine the claimant's "degree of impairment" that was attributable to the claimant's compensable injury. Formerly 77 P.S. § 511.2(1). Under this section, the physician was to make this assessment by applying the methodology set forth in "the most recent edition" of the American Medical Association's (AMA) Guide to the Evaluation of Permanent Impairment (Guides). Id. If the result of the IRE was a whole-body impairment rating of less than 50 percent, the claimant's benefits would be modified from total disability to partial disability. While this change did not alter the amount of weekly benefits the claimant received, it did cap the receipt of those benefits to 500 weeks. Formerly 77 P.S. § 511.2(2). At the time Section 306(a.2) was enacted, the "most recent edition" of the Guides was the Fourth Edition. As time passed, however, the AMA issued two new editions, the Fifth Edition and Sixth Edition. Each new edition meant that claimants who underwent IREs were subject to the newest edition's methodology.

         B. Constitutional Challenge to Section 306(a.2)

         In 2011, Mary Ann Protz underwent an IRE, using the Sixth Edition of the Guides, at the request of her employer, Derry Area School District (Derry), the result of which was a 10-percent impairment rating. Protz II, 161 A.3d at 830. Based on the IRE, a Workers' Compensation Judge modified Protz's benefits from total to partial. Protz challenged this modification on the basis that the General Assembly unconstitutionally delegated to the AMA the authority to establish the criteria for evaluating a claimant's permanent impairment when it required that the "most recent edition" of the Guides be used. This Court agreed, holding that only the General Assembly has the power to make laws and cannot, constitutionally, delegate that power to any other branch of the government or other entity. Protz v. Workers' Comp. Appeal Bd. (Derry Area Sch. Dist.), 124 A.3d 406, 416 (Pa. Cmwlth. 2015) (Protz I), aff'd in part by Protz II. By requiring the use of "the most recent edition" of the Guides, we explained, the General Assembly had, without making basic policy choices related to the issue of impairment or providing adequate standards to guide and restrain the AMA, delegated its authority to make laws to the AMA. Id. at 415-16. This Court further concluded that, even if the General Assembly had made those policy choices and provided adequate standards, the delegation was constitutionally infirm because the AMA was a private organization. Id. at 416. To remedy this constitutional violation, we did not strike Section 306(a.2) in its entirety, instead holding that all IREs had to be performed using the Fourth Edition of the Guides, the version that existed at the time Section 306(a.2) was enacted.

         Protz and Derry appealed to the Supreme Court, which affirmed in part and reversed in part. After reviewing "the heart of the non-delegation doctrine," the Supreme Court held the General Assembly had delegated its authority to the AMA without "favor[ing] any particular policies relative to the Guides' methodology for grading impairments" or "prescrib[ing] any standards to guide and restrain the AMA's discretion to create such a methodology." Protz II, 161 A.3d at 835. Observing that the AMA could revise the Guides at any time, adding new chapters or removing existing chapters, which would then have to be used by physicians in the IRE process, the Supreme Court held that the General Assembly had given "AMA de facto, unfettered control over a formula that ultimately will determine whether a claimant's partial[]disability benefits will cease after 500 weeks." Id. at 835-36. It similarly noted that the General Assembly has not "include[d] in Section 306(a.2) any of the procedural mechanisms that [the] Court has considered essential to protect against 'administrative arbitrariness and caprice, '" including the holding of hearings, taking public comments, or explaining the bases for its methodology. Id. at 836. As for the AMA's private status, the Supreme Court explained there was tension in the jurisprudence regarding whether delegation to a private entity would be constitutional, which did not need to be resolved at that time. However, it expressed that its decision "should not be read as an endorsement or rejection of the Commonwealth Court's view that" such delegation "is per se unconstitutional." Id. at 838.

         The remedy for the violation of the non-delegation clause, the Supreme Court concluded, was not to revert to the Fourth Edition of the Guides, but to strike down Section 306(a.2) in its entirety because the unconstitutional provisions could not be separated from the valid provisions. Id. at 841. In response to the argument that the Fourth Edition, the edition in effect at the time of Section 306(a.2)'s enactment, should be used, the Supreme Court held it would "beggar[] belief that the General Assembly would have used the words 'most recent edition' when it really meant 'Fourth Edition.'" Id. at 839. Thus, the Supreme Court reversed that part of Protz I.

         C. Section 306(a.3) of the Act

         After the Supreme Court's decision in Protz II, the General Assembly repealed Section 306(a.2) and enacted Section 306(a.3). Section 306(a.3) provides, in pertinent part:

(1) When an employe has received total disability compensation pursuant to clause (a) for a period of one hundred and four weeks, unless otherwise agreed to, the employe shall be required to submit to a medical examination which shall be requested by the insurer within sixty days upon the expiration of the one hundred and four weeks to determine the degree of impairment due to the compensable injury, if any. The degree of impairment shall be determined based upon an evaluation by a physician who is licensed in this Commonwealth, who is certified by an American Board of Medical Specialties-approved board or its osteopathic equivalent and who is active in clinical practice for at least twenty hours per week, chosen by agreement of the parties, or as designated by the department, pursuant to the American Medical Association "Guides to the Evaluation of Permanent Impairment," 6th edition (second printing April 2009).
(2) If such determination results in an impairment rating that meets a threshold impairment rating that is equal to or greater than thirty-five per centum impairment under the American Medical Association "Guides to the Evaluation of Permanent Impairment," 6th edition (second printing April 2009), the employe shall be presumed to be totally disabled and shall continue to receive total disability compensation benefit under clause (a). If such determination results in an impairment rating less than thirty-five per centum impairment under the American Medical Association "Guides to the Evaluation of Permanent Impairment," 6th edition (second printing April 2009), the employe shall then receive ...

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