King v. CompPartners, Inc. , 236 Cal. Rptr. 3d 853 ( 2018 )

Filed 8/23/18
IN THE SUPREME COURT OF CALIFORNIA
KIRK KING et al., )
)
Plaintiffs and Appellants, )
) S232197
v. )
) Ct.App. 4/2 E063527
COMPPARTNERS, INC., et al., )
) Riverside County
Defendants and Respondents. ) Super. Ct. No. RIC 1409797
____________________________________)
By statute, California’s workers’ compensation system provides an injured
employee’s “exclusive” remedy against an employer for compensable work-
related injuries. (Lab. Code, § 3602, subd. (a).) Here we consider the application
of workers’ compensation exclusivity to claims arising from the workers’
compensation utilization review process. Through that process, utilization
reviewers, acting on behalf of employers, determine whether the plan
recommended for the treatment of an employee’s industrial injury is medically
necessary after consulting a schedule of uniform treatment guidelines. If the
utilization reviewer concludes that a recommended treatment is not medically
necessary, he or she may modify or deny the treatment request. (Lab. Code,
§ 4610.)
In this case, a utilization reviewer denied a treating physician’s request to
continue prescribing certain medication for an injured employee. Alleging that the
utilization reviewer caused him additional injuries by denying the request without
1
SEE CONCURRING OPINIONS
authorizing a weaning regimen or warning him of the possible side effects of
abruptly ceasing the medication, the employee filed a lawsuit seeking recovery in
tort. We conclude that the workers’ compensation law provides the exclusive
remedy for the employee’s injuries and thus preempts the employee’s tort claims.
I.
A.
First created more than a century ago, California’s workers’ compensation
system is now governed by the Workers’ Compensation Act (WCA), “a
comprehensive statutory scheme governing compensation given to California
employees for injuries incurred in the course and scope of their employment.”
(Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal. 4th 800,
810 (Vacanti); see Mathews v. Workmen’s Comp. Appeals Bd. (1972) 6 Cal. 3d
719, 729−731; Lab. Code, §§ 3200 et seq.) At the core of the WCA is what we
have called the “ ‘ “compensation bargain.” ’ ” (Vacanti, supra, at p. 811.) Under
this bargain, “ ‘the employer assumes liability for industrial personal injury or
death without regard to fault in exchange for limitations on the amount of that
liability.’ ” (Ibid.) The employee, for his or her part, “ ‘is afforded relatively swift
and certain payment of benefits to cure or relieve the effects of industrial injury
without having to prove fault but, in exchange, gives up the wider range of
damages potentially available in tort.’ ” (Ibid.)
Under the WCA, an employer must provide an injured worker with all
medical treatment reasonably required to cure or relieve the effects of his or her
injury. (Lab. Code, § 4600.) When an injured employee suffers an industrial
injury, the employee reports the injury to his or her employer and then seeks
medical care from a treating physician. After examining the worker, “the treating
physician recommends any medical treatment he or she believes is necessary and
2
the employer is given a treatment request to approve or deny.” (State Comp. Ins.
Fund v. Workers’ Comp. Appeals Bd. (2008) 44 Cal. 4th 230, 238 (State Fund).)
For many years, if an employer wished to challenge a treating physician’s
recommendation, it had to invoke a “cumbersome, lengthy, and potentially costly”
dispute resolution process involving review by qualified medical evaluators,
litigation before a workers’ compensation judge, and a right of appeal to the
Workers’ Compensation Appeals Board. (State Fund, supra, 44 Cal.4th at p. 238;
see id. at p. 239.) To increase efficiency and reduce costs, the Legislature enacted
several major reforms that took effect in 2004. These reforms included a process
of mandatory utilization review, under which a reviewer assesses a treating
physician’s recommendation according to a schedule that establishes uniform
guidelines for evaluating treatment requests. (Lab. Code, § 4610; see State Fund,
at p. 240; see also Smith v. Workers’ Comp. Appeals Bd. (2009) 46 Cal. 4th 272,
279.)1
Under the statute as amended, every employer is required to establish a
utilization review process, “either directly or through its insurer or an entity with
which an employer or insurer contracts for these services.” (Lab. Code, § 4610,
former subd. (b), now subd. (g).) The utilization review process is
“comprehensive,” covering “any and all” treatment requests. (State Fund, supra,
44 Cal.4th at pp. 236, 243.) “If the treatment request is straightforward and
1 Section 4610 was added to the Labor Code effective January 1, 2004.
(Stats. 2003, ch. 639, § 28.) The Legislature later amended the section effective
January 1, 2013. (Stats. 2012, ch. 363, § 43.) This is the version of section 4610
that was in effect at the time of the events at issue in this case.
The Legislature has since made additional amendments to section 4610,
effective January 1, 2017 (Stats. 2016, ch. 868, § 3; Stats. 2016, ch. 885, § 1.5),
and January 1, 2018 (Stats. 2017, ch. 240, § 1). Neither amendment affects our
analysis in this case. Unless otherwise specified, we refer to the version of section
4610 that was in effect in 2013.
3
uncontroversial, the employer can quickly approve the request—utilization review
is completed without any need for additional medical review of the request.” (Id.
at p. 241; see id. at p. 240.) But while an employer can unilaterally approve a
treatment request, only a licensed physician competent to evaluate the “specific
clinical issues” can modify, delay, or deny a treatment request. (Lab. Code,
§ 4610, former subd. (e), now subd. (g)(3)(A).) The central issue for the
utilization reviewer is whether the requested treatment is medically necessary.
(Id., § 4610, subd. (a).) This medical necessity determination is to be made after
consulting the schedule for medical treatment utilization (id., § 4610, former
subds. (c), (f), now subds. (g)(1), (h)), which is presumed to be “correct on the
issue of extent and scope of medical treatment” (id., § 4604.5, subd. (a); see ibid.
[explaining that the presumption can be rebutted]).
Labor Code section 4610 specifies the information on which utilization
reviewers are to rely in making medical necessity determinations (Lab. Code,
§ 4610, former subd. (d)), as well as the timing of the determinations (id., § 4610,
former subd. (g)) and the nature of the explanations that must accompany the
determinations (id., § 4610, former subd. (g)(4)). When, for example, a utilization
reviewer decides to deny the recommendation of a treating physician in the midst
of treatment, that determination must be communicated to the requesting physician
within 24 hours of the decision. (Id., § 4610, former subd. (g)(3)(A), now subd.
(i)(4)(A).) In these so-called concurrent review cases, the statute provides that
“medical care shall not be discontinued until the employee’s physician has been
notified of the decision and a care plan has been agreed upon by the physician that
is appropriate for the medical needs of the employee.” (Id., § 4610, former subd.
(g)(3)(B), now subd. (i)(4)(C).) The decision to deny the request must “include a
clear and concise explanation of the reasons for the employer’s decision, a
description of the criteria or guidelines used, and the clinical reasons for the
4
decisions regarding medical necessity.” (Id., § 4610, former subd. (g)(4), now
subd. (i)(5).)
About a decade after it first instituted mandatory utilization review, the
Legislature enacted a second set of reforms designed to streamline the resolution
of disputes concerning utilization review determinations. (Stats. 2012, ch. 363,
§ 1, pp. 3719−3720.) The Legislature found that the then-existing dispute
resolution system was “costly, time consuming, and [did] not uniformly result in
the provision of treatment that adhere[d] to the highest standards of evidence-
based medicine,” all of which “adversely affect[ed] the health and safety of
workers injured in the course of employment.” (Id., § 1, subd. (d), p. 3719.) To
remedy these ills, the Legislature crafted a system of “independent medical
review,” or “IMR,” for resolving utilization review disputes. (Lab. Code,
§ 4610.5, subd. (d).)
Following this second set of amendments, the IMR process is the exclusive
mechanism for review of a utilization review decision. (Lab. Code, § 4610.5,
subd. (e); see also id., § 4062, subd. (b) [“If the employee objects to a decision
made pursuant to Section 4610 to modify, delay, or deny a request for
authorization of a medical treatment recommendation made by a treating
physician, the objection shall be resolved only in accordance with the independent
medical review process established in Section 4610.5.”].) Independent medical
review “is performed by an independent review organization, which assigns
medical professionals to review pertinent medical records, provider reports, and
other information submitted to the organization or requested from the parties.”
(Stevens v. Workers’ Comp. Appeals Bd. (2015) 241 Cal. App. 4th 1074, 1090; see
generally Lab. Code, § 4610.6.) The independent reviewer is tasked with
determining whether the requested treatment is “medically necessary based on the
specific medical needs of the employee and the standards of medical necessity as
5
defined in subdivision (c) of Section 4610.5.” (Id., § 4610.6, subd. (c).) If an
employee disputes an adverse decision on independent medical review, he or she
may appeal that decision to the Workers’ Compensation Appeals Board (id.,
§ 4610.6, subd. (h)); decisions of the Board may in turn be appealed to a Court of
Appeal (id., § 5950). (See Stevens, supra, 241 Cal.App.4th at p. 1091.)
B.
In February 2008, plaintiff Kirk King sustained a back injury while he was
at work.2 King suffered chronic pain as a result of the injury, which in turn caused
him anxiety and depression. In July 2011, a mental health professional prescribed
several psychotropic drugs, including Klonopin, to treat these latter conditions.
Defendant Dr. Naresh Sharma is an anesthesiologist who was employed by
defendant CompPartners, Inc. (CompPartners), a licensed workers’ compensation
utilization review management company. In July 2013, Dr. Sharma conducted a
utilization review of King’s Klonopin prescription. Dr. Sharma determined that
the Klonopin was medically unnecessary and decertified the prescription.
Dr. Sharma’s decertification did not provide for a weaning regimen, nor did
Dr. Sharma warn King of the risks of abruptly ceasing Klonopin. King
immediately stopped taking the medication and suffered a series of four seizures
as a result.
2 Because we are reviewing an order sustaining a general demurrer, we
accept as true all the material allegations of the complaint. (Shoemaker v. Myers
(1990) 52 Cal. 3d 1, 7.) Plaintiffs’ briefs include factual assertions that were not
included in the complaint, and so we have not considered them in deciding
whether the demurrer was properly sustained. (United Bank & Trust Co. v.
Fidelity & Deposit Co. (1928) 204 Cal. 460, 461; Harris v. King (1998) 60
Cal. App. 4th 1185, 1187.) We have, however, considered the new assertions in
deciding, post, whether plaintiffs should have been granted leave to amend the
complaint. (Connerly v. State of California (2014) 229 Cal. App. 4th 457, 460.)
6
In September 2013, King sought a new prescription for Klonopin. A month
later, Dr. Mohammed Ashraf Ali, a psychiatrist employed by CompPartners,
performed a utilization review of the prescription. Dr. Ali, like Dr. Sharma, found
that King’s Klonopin prescription was medically unnecessary. And again, like
Dr. Sharma, Dr. Ali neither authorized a weaning regimen nor warned King of the
risks of abruptly stopping the medication.
In October 2014, King and his wife filed a complaint in superior court
against CompPartners and Dr. Sharma, among others.3 The Kings asserted claims
of negligence, professional negligence, intentional and negligent infliction of
emotional distress, and loss of consortium. Defendants demurred, arguing that the
Kings’ claims were preempted by the WCA. In the alternative, they argued that
the negligence claims failed because Dr. Sharma owed no duty of care to King.
The trial court agreed with both arguments and sustained the demurrer without
leave to amend.
The Court of Appeal affirmed the order sustaining the demurrer but
reversed the denial of leave to amend. The Court of Appeal agreed with
defendants that the Kings’ challenge to Dr. Sharma’s decision to decertify the
Klonopin prescription is subject to the exclusive remedies of the workers’
compensation system. But insofar as the Kings instead challenge Dr. Sharma’s
failure to warn King of the risks of Klonopin withdrawal, the court concluded, the
claim is not preempted because it does not directly challenge Dr. Sharma’s
medical necessity determination. Finally, the Court of Appeal held that
Dr. Sharma owed King a duty of care, though it also held that the scope of the
duty could not be determined on the basis of the facts alleged in the Kings’
complaint.
3 The Kings also sued two other defendants, but only CompPartners and
Dr. Sharma are parties to this appeal.
7
We granted review. “In reviewing an order sustaining a demurrer, we
examine the operative complaint de novo to determine whether it alleges facts
sufficient to state a cause of action under any legal theory.” (T.H. v. Novartis
Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.) If the demurrer was sustained
without leave to amend, we consider whether there is a “reasonable possibility”
that the defect in the complaint could be cured by amendment. (Hendy v. Losse
(1991) 54 Cal. 3d 723, 742 (Hendy).) The burden is on plaintiffs to prove that
amendment could cure the defect. (Ibid.)
II.
To give effect to the compensation bargain underlying the system, the
WCA generally limits an employee’s remedies against an employer for work-
related injuries to those remedies provided by the statute itself. Labor Code
section 3600, subdivision (a) provides that workers’ compensation liability “shall,
without regard to negligence, exist against an employer for any injury sustained by
his or her employees arising out of and in the course of the employment . . . in
those cases where the . . . conditions of compensation concur.”4 Subject to certain
enumerated exceptions not relevant here, this liability is “in lieu of any other
liability whatsoever.” (Lab. Code, § 3600, subd. (a).) Labor Code section 3602
underscores the point: “Where the conditions of compensation . . . concur, the
right to recover such compensation is . . . the sole and exclusive remedy of the
employee . . . against the employer . . . .” (Id., § 3602, subd. (a), italics added.)
4 The conditions of compensation relevant to this case are as follows:
“(1) Where, at the time of the injury, both the employer and employee are subject
to the compensation provisions of this division. [¶] (2) Where, at the time of the
injury, the employee is performing service growing out of and incidental to his or
her employment and is acting within the course of his or her employment. [¶]
(3) Where the injury is proximately caused by the employment, either with or
without negligence.” (Lab. Code, § 3600, subd. (a).)
8
The WCA instructs that its provisions are to be “liberally construed by the
courts with the purpose of extending their benefits for the protection of persons
injured in the course of their employment.” (Lab. Code, § 3202.) This rule of
liberal construction applies even though a particular plaintiff might prefer to forgo
a workers’ compensation remedy in favor of a remedy at law: We construe the
Act “ ‘in favor of awarding work[ers’] compensation, not in permitting civil
litigation.’ ” (Arriaga v. County of Alameda (1995) 9 Cal. 4th 1055, 1065, italics
omitted.)
In addressing the application of the WCA’s exclusivity provisions in this
case, we confront two main issues: First, are the injuries the Kings allege in this
case the sort of injuries that are covered by the workers’ compensation exclusive
remedy? And second, are the defendants in this case entitled to the protections of
workers’ compensation exclusivity? We address each issue in turn.
A.
It is by now well established that the WCA’s exclusivity provisions
preempt not only those causes of action premised on a compensable workplace
injury, but also those causes of action premised on injuries “ ‘collateral to or
derivative of’ ” such an injury. (Vacanti, supra, 24 Cal.4th at p. 811, quoting
Snyder v. Michael’s Stores, Inc. (1997) 16 Cal. 4th 991, 997 (Snyder).) Such
collateral or derivative injuries include injuries stemming from conduct occurring
in the workers’ compensation claims process. In Vacanti, for example, we held
that the exclusivity provisions applied to claims brought by medical providers
against workers’ compensation insurers for the alleged mishandling of lien claims.
Because the medical providers sought to recover compensation for medical
services provided to workers injured in the course of their employment, we
reasoned, their claims fell within the scope of workers’ compensation exclusivity.
And to the extent the acts alleged by the providers constituted a “ ‘normal part of
9
the employment relationship’ [citation] or the workers’ compensation claims
process,” the claims were barred. (Id. at p. 820.) “[I]njuries arising out of and in
the course of the workers’ compensation claims process,” we explained, “fall
within the scope of the exclusive remedy provisions because th[e] process is
tethered to a compensable injury.” (Id. at p. 815.)
This conclusion follows from the unique causation principles underlying
Labor Code section 3600. As we recently explained in South Coast Framing, Inc.
v. Workers’ Comp. Appeals Bd. (2015) 61 Cal. 4th 291, 297 (South Coast
Framing), section 3600 provides a workers’ compensation remedy for an injury
linked “ ‘ “in some causal fashion” ’ ” to employment. This causation requirement
differs markedly from ordinary tort principles, in that “ ‘ “ ‘[a]ll that is required is
that the employment be one of the contributing causes without which the injury
would not have occurred.’ ” [Citation.]’ ” (Id. at pp. 297−298.) Because of this,
“industrial causation has been shown in an array of scenarios where a work injury
contributes to a subsequent nonindustrial injury.” (Id. at p. 300.) California courts
have held, for example, that “[a]n employee is entitled to compensation if a new or
aggravated injury results from medical or surgical treatment for an industrial
injury.” (Ibid. [citing cases]; see id. at p. 294 [workers’ compensation remedy
available to family of worker who died from the combination of drugs prescribed
following a fall at work].) This is true regardless of “ ‘whether the treatment [was]
provided by a physician selected by the employee or by the employer or the
employer’s compensation carrier.’ ” (Id. at p. 306.) And where the remedy is
available as an element of the compensation bargain it is exclusive of any other
remedy to which the worker might otherwise be entitled from the employer: “The
employer’s compensation obligation is ‘in lieu of any other liability whatsoever to
any person.’ ” (Snyder, supra, 16 Cal.4th at p. 996, quoting Lab. Code, § 3600,
italics omitted.)
10
These established principles lead to a straightforward answer here. The
Kings seek to recover for injuries that arose during the treatment of King’s
industrial injury and in the course of the workers’ compensation claims process.
Because the Kings allege injuries that are derivative of a compensable workplace
injury, their claims fall within the scope of the workers’ compensation bargain and
are therefore compensable within the workers’ compensation system.
The Court of Appeal agreed with this conclusion insofar as the Kings are
proceeding against defendants on a theory that Dr. Sharma made an erroneous
medical necessity determination regarding King’s Klonopin prescription. But the
court concluded that the exclusivity provisions of the WCA do not apply to the
extent the Kings complain of Dr. Sharma’s failure to warn King of the adverse
consequences of abruptly stopping Klonopin. This was error; focusing on
Dr. Sharma’s failure to warn does not alter the analysis. On either theory of
liability, 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.
In reaching its contrary conclusion regarding the Kings’ failure-to-warn
theory, the Court of Appeal relied on Vacanti’s observation that “courts have
allowed tort claims in cases where the alleged injury—the aggravation of an
existing workplace injury—did not occur in the course of an employment
relationship. (See, e.g., Weinstein v. St. Mary’s Medical Center (1997) 58
Cal. App. 4th 1223, 1235−1236 [allowing a medical malpractice claim against the
employer because the resulting aggravation of the workplace injury did not arise
out of the employment relationship].)” (Vacanti, supra, 24 Cal.4th at p. 814.) The
Court of Appeal read this passage to mean that “if something goes wrong in the
claims process for [a] workplace injury,” then the WCA’s exclusivity provisions
11
apply, but “if a new injury arises or [a] prior workplace injury is aggravated, . . .
the exclusivity provisions do not necessarily apply.” (King v. CompPartners, Inc.
(2016) 243 Cal. App. 4th 685, 694.) This is not a fair reading of the passage.
Vacanti did not attempt to draw a distinction between claims that “something
[went] wrong in the claims process,” on the one hand, and claims of a new or
aggravated injury, on the other. Vacanti instead simply noted that cases have held
that the WCA does not preempt claims of new or aggravated injuries arising
outside “the employment relationship.” (Vacanti, supra, at p. 814, italics added.)
Vacanti’s reference to Weinstein v. St. Mary’s Medical Center offers some
insight into what this court had in mind. The plaintiff in Weinstein was a hospital
employee who was injured on the job. She voluntarily sought treatment for her
workplace injury at the hospital where she worked. While on the premises to
receive treatment, she was injured in a slip and fall. (Weinstein v. St. Mary’s
Medical Center, supra, 58 Cal.App.4th at p. 1226 (Weinstein).) The hospital
argued that tort remedies for the slip and fall injury were barred by workers’
compensation exclusivity. The Court of Appeal rejected the argument, invoking
the so-called “dual capacity doctrine” first enunciated by this court in Duprey v.
Shane (1952) 39 Cal. 2d 781 (Duprey). That doctrine, as we have later described
it, “posits that an employer may have or assume a relationship with an employee
other than that of employer-employee, and that when an employee seeks damages
for injuries arising out of the secondary relationship the employee’s claim is not
subject to the exclusive remedy provisions of the Workers’ Compensation Act”
(Hendy, supra, 54 Cal.3d at p. 730). The court in Weinstein reasoned that the
plaintiff’s slip and fall injury was entirely independent of her employment
relationship with the hospital; she had freely chosen to receive treatment at the
12
hospital, and her claims invoked the hospital’s duty toward her in its capacity as a
landowner, not as an employer. (Weinstein, at pp. 1235−1236.)5
This case presents no comparable circumstances. Certainly King, like the
plaintiff in Weinstein, seeks recovery for injuries following his initial industrial
injury. But unlike the injuries at issue in Weinstein, King’s injuries occurred
within the scope of the employment relationship: King alleges the injuries
resulted from errors in the utilization review process—a process that King’s
employer, in its capacity as an employer, was required to establish for the review
of the treatment recommended for King’s prior industrial injury. (See Lab. Code,
§ 4610.)
The Court of Appeal at least implicitly recognized the relationship between
King’s alleged injuries and his employment when it concluded that the Kings’
challenge to Dr. Sharma’s medical necessity determination is preempted by the
5 The court in Weinstein acknowledged that the Legislature had amended the
WCA in 1982 to make clear that “[t]he fact that either the employee or the
employer also occupied another or dual capacity prior to, or at the time of, the
employee’s industrial injury shall not permit the employee or his or her
dependents to bring an action at law for damages against the employer.” (Lab.
Code, § 3602, subd. (a).) But the court concluded that the 1982 amendment did
not alter the analysis because the plaintiff was seeking compensation for a slip and
fall injury that occurred after the initial industrial injury and had no connection at
all with any employment-related duties or obligations she might have toward the
hospital, or the hospital toward her. (Weinstein, supra, 58 Cal.App.4th at p. 1237.)
In other words, at the time of the injury in question, the hospital was acting in only
one capacity, and that capacity was one of landowner, not employer.
This court has never had occasion to consider what, if anything, remains of
the Duprey dual capacity doctrine following the 1982 amendment. (See Hendy,
supra, 54 Cal.3d at pp. 735−739 [recognizing that the Legislature restricted the
scope of the dual capacity doctrine when it amended section 3602 in 1982]; id. at
p. 736, fn. 10 [reserving the question whether “the 1982 amendment of section
3602 abolished the dual capacity doctrine insofar as it applied to employer
physicians who provide treatment to their employees for industrial injuries”].)
The question is not raised here and we express no view on it.
13
WCA. But the court distinguished the Kings’ failure-to-warn theory on the
ground that such a warning, if given, would fall outside the scope of the workers’
compensation claims process. That distinction is untenable. The utilization
review provisions of the WCA govern not only the substance of a utilization
review decision, whether based on medical necessity or otherwise, but also the
content of the responses communicating the decision. (See Lab. Code, § 4610,
former subd. (g)(4), now subd. (i)(5) [“Responses regarding decisions to modify,
delay, or deny medical treatment services requested by physicians shall include a
clear and concise explanation of the reasons for the employer’s decision, a
description of the criteria or guidelines used, and the clinical reasons for the
decisions regarding medical necessity.”].) The statute also specifies when, and to
whom, the decision must be conveyed. (Id., § 4610, former subd. (g)(3), now
subd. (i)(4) [decisions “shall be communicated to the requesting physician within
24 hours of the decision”].) Both Dr. Sharma’s decision to decertify Klonopin and
the manner in which Dr. Sharma communicated that decision fall within the scope
of the statutory process set up by King’s employer to review recommendations
concerning the treatment of King’s industrial injury. The harm the Kings allege is
therefore collateral to and derivative of that industrial injury and arose within the
scope of King’s employment for purposes of the workers’ compensation exclusive
remedy. (See South Coast Framing, supra, 61 Cal.4th at pp. 299−300.)
B.
The Kings argue that even if their injuries were collateral to and derivative
of King’s work-related back injury, defendants are not entitled to the protections
of workers’ compensation exclusivity because defendants are not King’s
“employer” for purposes of the WCA’s exclusivity provisions.
While the workers’ compensation remedy bars suit against an “employer”
(Lab. Code, §§ 3600, 3602), the statute expressly preserves the right of employees
14
to sue third parties: “The claim of an employee . . . for compensation does not
affect his or her claim or right of action for all damages proximately resulting from
the injury or death against any person other than the employer” (id., § 3852). The
statute generally defines the term “employer” to mean, as relevant here, any
“person including any public service corporation, which has any natural person in
service” (id., § 3300, subd. (c); see also id., § 3351 [defining “employee” as
“every person in the service of an employer”])—a definition that would appear to
exclude CompPartners and Dr. Sharma, neither of whom can be said to have King
“in [] service.”
But as the Kings acknowledge, it has long been held that workers’
compensation exclusivity preempts tort claims against certain other persons and
entities as well: insurers, as “the ‘alter ego’ of the employer” (see Unruh v. Truck
Insurance Exchange (1972) 7 Cal. 3d 616, 625 (Unruh)) and independent claims
administrators and adjusters hired by self-insured employers to handle workers’
compensation claims (Marsh & McLennan, Inc. v. Superior Court (1989) 49
Cal. 3d 1, 4 (Marsh)). The question is whether the WCA, properly interpreted, also
preempts tort claims against utilization reviewers hired by employers to carry out
their statutory claims processing functions. Viewing the question against the
backdrop of our precedents, we conclude the answer is yes.
In Unruh, an injured employee sued her employer’s insurer and others in
tort, alleging that they negligently and intentionally caused her physical and
psychological injury while investigating her workers’ compensation claim.
(Unruh, supra, 7 Cal.3d at pp. 620−621.) We held that the WCA barred the
employee from bringing her negligence claim against the insurer.6 (Id. at p. 624.)
6 We held under a narrow exception, not relevant here, that the employees’
intentional tort claims against the insurer could proceed. (Unruh, supra, 7 Cal.3d
at p. 630.) We discuss this exception below. (See part II.C., post.)
15
Although the statute’s general definition of employer does not include insurers, a
special provision defining “employer” for purposes of the WCA’s subrogation
provisions does expressly include insurers. (Ibid., citing Lab. Code, § 3850.) We
concluded that this special definition applied to the provision authorizing suits
against any “ ‘person other than the employer.’ ” (Unruh, at p. 625, quoting Lab.
Code, § 3852.) Therefore, we held, when an insurer “act[s] within its proper role
in the compensation scheme” (Unruh, at p. 627), it “retain[s] immunity from
lawsuit as the ‘alter ego’ of the employer” (id. at p. 625).
In Marsh, an injured employee’s surviving spouse sued the employer’s
independent claims administrator in tort for wrongly stopping the payment of the
death benefits to which she was entitled. The plaintiff in that case argued that she
was entitled to maintain the suit because the independent claims administrator was
neither an employer, nor an insurer as in Unruh, and therefore was not entitled to
the protections of workers’ compensation exclusivity. We rejected the argument.
The exclusive remedy doctrine, we explained, derives its force from more than the
special statutory definition of “employer” on which we focused in Unruh. The
exclusivity doctrine also derives from other provisions of the WCA: namely,
Labor Code section 5300, which establishes the exclusive jurisdiction of the
Workers’ Compensation Appeals Board over disputes concerning an employee’s
right to compensation or the liability of an employer, and Labor Code section
5814, which specifies the penalty for unreasonable delay or refusal of
compensation. Taken together, we concluded, these provisions “imply that the
workers’ compensation system encompasses all disputes over coverage and
payment, whether they result from actions taken by the employer, by the
employer’s insurance carrier or, . . . by an independent claims administrator hired
by the employer to handle the worker’s claim.” (Marsh, supra, 49 Cal.3d at p. 8.)
By way of explanation, we noted that independent claims administrators perform a
16
statutorily recognized function in the workers’ compensation scheme. (Id. at p. 9;
see ibid. [“Administrators must now obtain certification from the Director of
Industrial Relations [citation] and are subject to fines or revocation of their
certificates at any time for good cause [citation]. [Citation.] They must also file
annual reports with the director. [Citation.]”].) They perform this function on
behalf of employers who “lack[] the expertise to themselves handle the workers’
compensation claims of their employees” (id. at p. 8), and they are likely to bear
ultimate responsibility for any penalty owed because of their misconduct (ibid.).
We therefore concluded that an independent claims administrator stands in the
shoes of the employer for the purpose of the claims administration process, and
thus is entitled to the same protection from tort claims based on an injury
compensable within the workers’ compensation system. Concluding otherwise,
we said, “would vitiate the very purpose of the exclusive remedy provisions of the
Act.” (Ibid., fn. omitted.)
Similar considerations apply in the context of disputes regarding utilization
review. The WCA requires employers to engage the services of utilization
reviewers and regulates utilization review activities in considerable detail. (See
Lab. Code, § 4610, former subd. (b), now subd. (g).) The statute identifies the
exclusive means by which an employee may dispute a utilization review decision:
namely, independent medical review. (Lab. Code, § 4610.5, subd. (e) [“A
utilization review decision may be reviewed or appealed only by independent
medical review pursuant to this section.”]; see also id., § 4062, subd. (b) [“If the
employee objects to a decision made pursuant to Section 4610 to modify, delay, or
deny a request for authorization of a medical treatment recommendation made by
a treating physician, the objection shall be resolved only in accordance with the
independent medical review process established in Section 4610.5” (italics
added).].) And the statute prescribes administrative penalties against any
17
employer, insurer, or other entity that fails to meet any of the pertinent statutory
requirements. (Id., § 4610, former subd. (i), now subd. (p).)7
Perhaps most importantly, in performing their statutory functions,
utilization reviewers, much like independent claims administrators, effectively
stand in the shoes of employers: they perform utilization review on behalf of
employers, to discharge the employers’ own responsibilities to their employees.
Indeed, as the statute acknowledges, the utilization review function can be
performed by the employer itself, as well as by the insurer or by an independent
entity with which the employer or insurer contracts. (Lab. Code, § 4610, former
subd. (b), now subd. (g).) The statute contains no suggestion that claims arising
from the utilization review process should be treated differently depending on
whether the employer conducts the review in-house or instead contracts with an
independent utilization review organization. To the contrary, Labor Code section
4610.5—which sets out the procedures for resolving “[a]ny dispute over a
utilization review decision” (id., § 4610.5, subd. (a))—expressly defines the term
“employer” for that purpose to include the “employer, the insurer of an insured
employer, a claims administrator, or a utilization review organization, or other
entity acting on behalf of any of them.” (Id., § 4610.5, subd. (c)(4), italics added.)
This special definitional provision tends to reinforce the conclusion that the
Legislature regards utilization review organizations, like claims administrators, as
acting on behalf of the employers that contracted for their services.
We presume that the Legislature was aware of our decision in Marsh when
it crafted the utilization review provisions in sections 4610 and 4610.5. (Williams
7 Recent amendments to the act, effective January 1, 2018, call for additional
regulation of utilization review. Section 4610, for example, now contains detailed
requirements for the accreditation of utilization review processes performed by
physicians. (Lab. Code, § 4610, subd. (g)(4).)
18
v. Industrial Acc. Com. (1966) 64 Cal. 2d 618, 620.) And in this case, much as in
Marsh, those provisions, viewed in the broader context and operation of the WCA,
evince an intent “that the workers’ compensation system encompass[] all disputes”
concerning utilization review, “whether they result from actions taken by the
employer, by the employer’s insurance carrier or” by a utilization review
organization hired to handle the review on the employer’s behalf. (Marsh, supra,
49 Cal.3d at p. 8.) As a general matter, a contrary conclusion would also
undermine the Legislature’s apparent purpose in establishing the independent
medical review process as the exclusive mechanism for review of the utilization
review decisions of an employer, including a utilization review organization acting
on the employer’s behalf. (Lab. Code, § 4610.5, subd. (c)(4).) Thus, following
the reasoning of Marsh, we hold that the exclusive remedy for the Kings’ injuries
lies within the workers’ compensation system.
C.
The Kings and their amici raise policy concerns about this conclusion.
Utilization review has a significant impact on the medical care of injured workers.
It follows, they argue, that utilization reviewers should be held accountable for
their mistakes in the same way and to the same extent as treating physicians, who
may be sued for their malpractice. (Duprey, supra, 39 Cal.2d at p. 792.)
The statute’s treatment of utilization reviewers is, however, consistent with
the basic tradeoff that underlies the workers’ compensation system as a whole:
The employee is afforded swift and certain payments for medical treatment
without having to prove fault, but, in exchange, gives up his right to sue in tort for
those injuries that result from risks encompassed by the employment relationship.
(See Fermino v. Fedco, Inc. (1994) 7 Cal. 4th 701, 708; South Coast Framing,
supra, 61 Cal.4th at pp. 299−300.) And the treatment of utilization reviewers is
also consistent with the Legislature’s apparent aim in crafting the WCA’s
19
utilization review provisions. Those provisions task utilization reviewers,
operating on behalf of employers, with making judgments on a limited set of
documents pursuant to defined criteria and subject to further review only through
statutorily specified procedures. (See Simmons v. State Dept. of Mental Health
(2005) 70 Cal.Comp.Cases 866, 874 [noting that a utilization reviewer, unlike a
treating physician, “does not physically examine the applicant, does not obtain a
full history of the injury or a full medical history, and might not review all
pertinent medical records”].) To permit plaintiffs to bring tort suits against
utilization reviewers, in the same manner as they might bring tort suits against
treating physicians, would subject utilization reviewers to a second—and perhaps
competing—set of obligations rooted in tort rather than statute. That result does
not sit easily with the Legislature’s overarching purpose of replacing a dispute
resolution process that was “ ‘cumbersome, lengthy, and potentially costly’ ”
(State Fund, supra, 44 Cal.4th at p. 245 (conc. opn. of Kennard, J.)) with one that
instead “balances the dual interests of speed and accuracy” (id. at p. 241 (maj.
opn.)).
The detailed scheme the Legislature enacted does contain several
safeguards to protect employees from the sort of harm the Kings have alleged. As
previously noted, decisions to modify or deny a treatment request must be
performed by licensed physicians, who must make medical necessity
determinations in keeping with a uniform schedule of medical treatment
guidelines.8 (Lab. Code, § 4610, former subds. (c), (e), (f), now subds. (g)(1),
(g)(3)(A), (h).) As particularly relevant here, the statute provides that “medical
8 The uniform treatment schedule incorporates “evidence-based, peer-
reviewed, nationally recognized standards of care recommended by [the
Commission on Health and Safety and Workers’ Compensation].” (Lab. Code,
§ 5307.27, subd. (a).)
20
care shall not be discontinued until the employee’s physician has been notified of
the decision and a care plan has been agreed upon by the physician that is
appropriate for the medical needs of the employee.” (Lab. Code, § 4610, former
subd. (g)(3)(B), now (i)(4)(C).) To the extent that a physician or a utilization
review organization fails to abide by a statutorily required part of the utilization
review process, the employer, insurer, or utilization review organization may be
subject to administrative penalties. (Lab. Code, § 4610, former subd. (i), now
subd. (p).) A physician who makes unsound professional judgments in this
capacity is subject to professional discipline, which may include the loss of his or
her license. (See Bus. & Prof. Code, §§ 2221, 2234.) And, of course, employers
are ultimately responsible for paying benefits to workers who suffer injuries as a
result of the utilization review process.
Moreover, as we have previously held, workers’ compensation exclusivity
does not bar tort remedies resulting from acts that “fall outside the risks
encompassed within the compensation bargain.” (Vacanti, supra, 24 Cal.4th at
p. 812.) The Kings have not invoked that exception here, and it would not apply
in any event; the exception applies when the conduct is “so extreme and
outrageous that” the defendant “in effect stepped out of its role” as contemplated
by the workers’ compensation scheme. (Marsh, supra, 49 Cal.3d at p. 6; see
Vacanti, supra, 24 Cal.4th at pp. 822−823.) Where, by contrast, “the acts are ‘a
“normal” part of the employment relationship’ [citation], or workers’
compensation claims process [citation], or where the motive behind these acts
does not violate a ‘fundamental policy of this state’ [citation], then the cause of
action is barred.” (Vacanti, supra, 24 Cal.4th at p. 812.) Here, there is no
question that Dr. Sharma’s utilization review decision, the content of the decision,
and his manner of communicating that decision fall within the scope of the
statutory utilization review process. (See Lab. Code, § 4610.) The Kings have
21
alleged that Dr. Sharma was wrong to decertify Klonopin as he did, but an
allegation of mistake alone is not sufficient to exempt a cause of action from
preemption. (Cf. Vacanti, supra, 24 Cal.4th at p. 821 [“Because denying or
objecting to claims for benefits is also a normal part of the claims process,
misconduct stemming from the delay or ‘discontinuance of payments . . . is
properly addressed by the [Workers’ Compensation Appeals Board].’ ”].) In other
cases, however, a plaintiff may well argue that a utilization reviewer’s conduct
exceeds the bounds of its role and that workers’ compensation exclusivity
therefore should not apply.
It is undoubtedly true that the availability of additional remedies would
increase utilization reviewers’ incentives to perform their tasks with appropriate
competence and care. But as we read the statute the Legislature enacted, the
workers’ compensation system provides the exclusive remedy for otherwise
compensable injuries stemming from alleged mistakes in the utilization review
process. Here the Kings’ tort claims concerning Dr. Sharma’s decertification of
King’s prescription are collateral to and derivative of a compensable injury and
defendants performed a statutorily recognized utilization review function on
behalf of King’s employer. Because the acts alleged do not suggest that
defendants stepped outside of the utilization review role contemplated by statute,
the Kings’ claims are preempted.9
The Kings have not shown that they could amend their complaint in a
manner that would alter this conclusion. In their briefing, they do raise some new
factual assertions about Dr. Sharma’s erroneous handling of the treatment request.
9 This conclusion applies to the Kings’ claims of negligence, as well as the
claim of intentional infliction of emotional distress (see Cole v. Fair Oaks Fire
Protection Dist. (1987) 43 Cal. 3d 148, 151) and the claim of loss of consortium
(see Snyder, supra, 16 Cal.4th at p. 997).
22
Specifically, they assert that Dr. Sharma signed a draft decision that had been
prepared by a nurse without reviewing King’s medical records or contacting his
prescribing doctor. They also assert that Dr. Sharma and CompPartners
erroneously sent Dr. Sharma’s decertification decision to King’s general physician
instead of King’s prescribing physician. But neither of these asserted errors in the
utilization review process falls outside the risks contemplated by the statutory
scheme that the Legislature has enacted. Such allegations, if formally pleaded,
would not affect our conclusion that the exclusive remedy for the Kings’ alleged
injuries lies in the workers’ compensation system.
III.
We affirm the Court of Appeal’s judgment insofar as it affirmed the trial
court’s sustaining of the demurrer, but reverse its judgment insofar as it permitted
the Kings to amend their complaint to bolster their claim that defendants are liable
in tort for failure to warn. We remand the case to the Court of Appeal for further
proceedings consistent with this opinion.
KRUGER, J.
WE CONCUR:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
GROVER, J.*
* Associate Justice of the Court of Appeal, Sixth Appellate District, assigned
by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
23
CONCURRING OPINION BY LIU, J.
Today we hold that Kirk and Sara King’s tort claims are preempted by
California’s workers’ compensation system. As enacted by the Legislature and as
interpreted by our court, this system provides the exclusive remedy not only for
workplace injuries but also for injuries “ ‘ “collateral to or derivative of” ’ ”
workplace injuries. (Maj. opn., ante, at p. 9, quoting Charles J. Vacanti, M.D.,
Inc. v. State Comp. Ins. Fund (2001) 24 Cal. 4th 800, 811.) Because “[t]he Kings
seek to recover for injuries that arose during the treatment of [Kirk] King’s
industrial injury and in the course of the workers’ compensation claims
process[,] . . . their claims fall within the scope of . . . the workers’ compensation
system.” (Maj. opn., ante, at p. 11; see Vacanti, at p. 815.) This is true even
though the Kings are seeking damages against a third-party utilization review
organization and its employees: The statutory provisions governing utilization
review, when “viewed in the broader context and operation of the [Workers’
Compensation Act], evince an intent ‘that the workers’ compensation system
encompass[] all disputes’ concerning utilization review, ‘whether they result from
actions taken by the employer, by the employer’s insurance carrier or’ by a
utilization review organization hired to handle the review on the employer’s
behalf.” (Maj. opn., ante, at p. 19, quoting Marsh & McLennan, Inc. v. Superior
Court (1989) 49 Cal. 3d 1, 8.)
1
But the undisputed facts in this case suggest that the workers’
compensation system, and the utilization review process in particular, may not be
working as the Legislature intended. As today’s opinion notes, “[t]he detailed
scheme the Legislature enacted . . . contain[s] several safeguards to protect
employees from the sort of harm the Kings have alleged.” (Maj. opn., ante, at
p. 20.) For example, “decisions to modify or deny a treatment request must be
performed by licensed physicians, who must make medical necessity
determinations in keeping with a uniform schedule of medical treatment
guidelines. [Citations.] As particularly relevant here, . . . ‘medical care shall not
be discontinued until the employee’s physician has been notified of the decision
and a care plan has been agreed upon by the physician that is appropriate for the
medical needs of the employee.’ [Citation.] To the extent that . . . a utilization
review organization fails to abide by a statutorily required part of the utilization
review process, the . . . organization may be subject to administrative penalties.
[Citation.] A physician who makes unsound professional judgments in this
capacity is subject to professional discipline, which may include the loss of his or
her license. [Citations.] And . . . employers are ultimately responsible for paying
[compensatory] benefits to workers who suffer injuries as a result of the utilization
review process.” (Id. at pp. 20–21, fn. omitted.)
The record in this case does not indicate whether defendants followed the
relevant statutory and regulatory requirements in discontinuing Kirk King’s
prescription for Klonopin. But the seizures King suffered as a result of his abrupt
withdrawal from the drug provide grounds for skepticism that “a care
plan . . . appropriate for the medical needs of the employee” was established
before his prescription was discontinued. (Lab. Code, § 4610, former subd.
(g)(3)(B), now subd. (i)(4)(c).) And even if defendants fully complied with the
relevant requirements, it is questionable whether those requirements are enough to
2
prevent similar injuries from occurring in the future. The “compensation bargain”
that underlies the workers’ compensation system may allow for some “mistakes in
the utilization review process.” (Maj. opn., ante, at pp. 8, 22.) But the balance
that bargain strikes between employers’ interests and workers’ interests presumes
that utilization review — which is conducted either by the worker’s employer or
by an entity “stand[ing] in the shoes of [the] employer[]” (id. at p. 18) — will be
performed “with appropriate competence and care” (id. at p. 22). The limited
record here raises doubts as to whether King’s utilization review was handled
properly. The Legislature may wish to examine whether the existing safeguards
provide sufficient incentives for competent and careful utilization review.
LIU, J.
I CONCUR:
CUÉLLAR, J.
3
CONCURRING OPINION BY CUÉLLAR, J.
Employees protected by the Workers’ Compensation Act (WCA; Lab.
Code, § 3201 et seq.) sometimes allege that their harm arises not only from a
work-related injury, but from the “utilization review process” affecting their
access to medical treatment for that injury (id., § 4610). What today’s majority
opinion holds is that when these workers seek a remedy for such harms, they must
find it exclusively in the WCA. I understand why the majority opinion reaches
this conclusion, particularly in light of our decisions in Unruh v. Truck Insurance
Exchange (1972) 7 Cal. 3d 616 (Unruh) and Marsh & McLennan, Inc. v. Superior
Court (1989) 49 Cal. 3d 1 (Marsh). I write separately to emphasize the importance
of the common law remedies that ordinarily protect the public, and why courts
must continue to proceed with caution when considering –– as in this case ––
whether a statute abrogates tort causes of action that ordinarily serve to incentivize
good behavior, compensate for injuries, and right moral wrongs.
The WCA is a “comprehensive statutory scheme” governing the
compensation employers must pay employees for injuries suffered in the course
and scope of their employment. (Charles J. Vacanti, M.D., Inc. v. State Comp.
Ins. Fund (2001) 24 Cal. 4th 800, 810.) At the heart of that scheme is a trade-off:
an employer pays employees less than the full measure of tort compensation for
the work-related harm, but the payment is certain and provided without regard to
fault. (Ibid.) This trade-off governs the relationship between employers and
1
employees who sustain a work-related injury, but keeps tort law relevant to third
parties who might exacerbate such an injury. (See Lab. Code, § 3852 [“The claim
of an employee . . . for compensation does not affect his or her claim or right of
action for all damages proximately resulting from the injury or death against any
person other than the employer”].) So even as the WCA mediates the relationship
of employers and employees, it explicitly carves out room for the continued
viability of tort claims — and the application of common law principles — for
harms involving third parties.
If it is true that this carve-out could in principle conceivably encompass the
independent officials and organizations involved in utilization review, it is also
true that we have previously held this third-party “exception” not to encompass
insurers (see Unruh, supra, 7 Cal.3d at pp. 623-627) or independent claims
administrators (see Marsh, supra, 49 Cal.3d at pp. 4-10). We have so held on the
basis of explicit, and sometimes implicit, indications of the Legislature’s purpose
in the WCA. (See Lab. Code, §§ 3850 [defining employer to include insurers],
5300, subd. (a) [indicating that the Workers’ Compensation Appeals Board is the
exclusive forum for the “recovery of compensation, or concerning any right or
liability arising out of or incidental thereto”].) The majority today extends the
reasoning in these cases to cover independent utilization reviewers, when an
employee’s injuries arise from an incorrect medical necessity decision or the
failure to warn a patient about the consequences of following such a decision.
(Maj. opn., ante, at pp. 17-18.)
Yet this result may be far from obvious –– not only because at least some
of the statutory scheme likely could be reconciled with a different outcome, but
also because of the presumption we normally apply against the implied repeal of
the common law. Not surprisingly, the common law undergirds our jurisprudence.
(See, e.g., Li v. Yellow Cab Co. (1975) 13 Cal. 3d 804, 818-821 (Yellow Cab)
2
[discussing the codification of the common law principle of contributory
negligence in Civ. Code, § 1714].) That our society’s long history with the
common law showcases not only its virtues but its limitations is no reason to
ignore its distinctive attributes. In different settings, the common law leverages
societal experiences to shape incentives, and to develop concepts and categories of
obligation, that offer lawyers and the public a framework for understanding the
duties we owe each other. (See, e.g., Hill v. National Collegiate Athletic Assn.
(1994) 7 Cal. 4th 1, 25, quoting Post, The Social Foundations of Privacy (1989) 77
Cal. L.Rev. 957, 1008 [describing how the common law right to privacy evolved
out of a “ ‘normative set of social practices that constitute a way of life’ ” and
“psychological foundations emanating from personal needs to establish and
maintain identity and self-esteem by controlling self-disclosure”]; Warren &
Brandeis, The Right to Privacy (1890) 4 Harv. L.Rev. 193, 193 [“Political, social,
and economic changes entail the recognition of new rights, and the common law,
in its eternal youth, grows to meet the demands of society”].) As society and our
institutions change, so does the common law. (See Yellow Cab, supra, 13 Cal.3d
at pp. 821-823 [finding contributory negligence to have evolved to comparative
negligence through a common law process].)
The Legislature’s power to curb the scope of common law causes of action
is not only beyond question — it’s part of the process that adapts the fabric of the
common law to a changing world. But we consider a restriction on the public’s
access to longstanding common law protections sufficiently fraught to expect a
clear legislative statement attesting that such change occurred, and rightly so. (See
McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 249 [“we construe
statutory enactments as consonant with existing common law and reconcile the
two bodies of law”]; People v. Ah Sam (1871) 41 Cal. 645, 653 [discussing how
statutes are sometimes “intended to declare what the common law is, for the
3
purpose, merely, of making that certain which before was doubtful”]; Brown, A
Search for Clarity and Consistency in Judicial Process: The Maryland Court of
Appeals Decides Whether to Change Common-Law Rules (2003) 62 Md. L.Rev.
599, 603-604 [“requests to change the common law often produce acrimony.
Someone is asserting that present conditions so differ from the past that an old,
trusted rule must be discarded”].) So we apply a presumption against implied
repeal of common law causes of action. (California Assn. of Health Facilities v.
Department of Health Services (1997) 16 Cal. 4th 284, 299.) Unless a statute
“clearly and unequivocally” demonstrates a purpose different from a rule obtained
from the common law (Yellow Cab, at p. 815), we make every attempt to find a
rational means of harmonizing any conflicts between the two bodies of law (see
McMillin, at p. 249 [requiring harmonization unless “ ‘the language or evident
purpose of the statute’ ” requires the repeal of the common law rule]; cf. Fuentes
v. Workers' Comp. Appeals Bd. (1976) 16 Cal. 3d 1, 7). The common law is
neither substantively perfect nor perfectly efficient. Yet it makes sense to
recognize its foundational status in our system, and to take seriously the doctrines
and presumptions that allow us to make the most of what it has to offer.
The question here is why this presumption does not apply to independent
utilization reviewers and the harms they potentially impose on employees like the
plaintiff in this case. One answer may be that the presumption we apply against
repeal of the common law can be easily rebutted in our analysis of the workers’
compensation law — an area where the Legislature has explicitly eliminated the
right to bring a tort suit against employers. (See Lab. Code, § 3600, subd. (a).)
Given this explicit repudiation of tort law in the WCA, the question changes from
whether the common law has been abrogated — it has — to the boundary lines of
where it’s been eliminated. The dividing line is many times decided on whether
we consider a party an “employer” or an alter-ego thereof. This question must be
4
evaluated in the context of the workers’ compensation scheme as a whole through
explicit or implicit legislative indications of purpose. Although the presumption
against implied repeals may still exist to rebuff undue expansions of who is an
“employer,” the weight of the WCA’s explicit repudiation of tort law in
combination with other indicators of legislative purpose may serve to rebut the
presumption in cases like this one.
Remedies can play a particularly important role as an indicator of
legislative purpose when courts seek to demarcate the precise distinction between
who counts as employers and non-employers under the WCA scheme. A maxim
of the common law is that every right has a remedy. (See Marbury v. Madison
(1803) 5 U.S. 137, 163.) That maxim imbues our understanding of statutory rights
as well. (Collins v. O’Laverty (1902) 136 Cal. 31, 35 [“To deny the remedy would
be to deny the right . . . , and thus to nullify the statute”].) Without an explicit
legislative directive, it would run against this maxim, and the presumption against
the implied repeal of the common law, to eliminate any remedy for what would
normally be redressed through a tort cause of action. We, of course, do not reach
the question whether a tort duty of care runs between the independent utilization
reviewer and the employee. But that is in no small part because the Legislature
implemented a number of safeguards against, and administrative penalties for,
what occurred here, as well as a remedy in the form of additional workers’
compensation for the injuries incurred. As the majority points out, when the
arcana of utilization review results in denial, the process must be performed by
licensed physicians (Lab. Code, § 4610, former subd. (e), now subd. (g)(3)(A)),
those decisions must comply with uniform medical treatment guidelines (id.,
§ 4610, former subds. (c) & (f), now subds. (g)(1) & (h)), and an adverse decision
cannot result in the cessation of care until the employee’s physician receives
notification of the decision and agrees to a care plan for the employee (id., § 4610,
5
former subd. (g)(3)(B), now subd. (i)(4)(C)). (See maj. opn., ante, at pp. 20-21.)
And if a utilization reviewer “fail[s] to meet any . . . requirement of this section,”
the Division of Workers’ Compensation may “assess, by order, administrative
penalties for each failure” on the utilization review organization. (Lab. Code,
§ 4610, former subd. (i), now subd. (p).) Moreover, the physician utilization
reviewer may be subject to professional discipline that could result in the loss of
his or her license or a public reprimand. (See Bus. & Profs. Code, § 2221,
2221.05.) And of course, as the majority opinion holds, the employee has a
remedy in the form of workers’ compensation benefits. (See maj. opn., ante, at p.
14 [finding harm arising from the utilization reviewer’s decision to fall “within the
scope of King’s employment for purposes of the workers’ compensation exclusive
remedy”]; see also id. at p. 21.)
Our understanding of the utilization review statute’s purpose may have
differed if the Legislature had failed to provide any such safeguards, incentives, or
remedies. Even now, those safeguards and remedies may not be set at optimal
levels, and the Legislature may find it makes sense to change them. (See conc.
opn. of Liu, J., ante, at pp. 2-3.) Nonetheless, they are sufficient to support our
conclusion –– in light of our decisions in Marsh and Unruh, and the WCA’s
scheme as a whole –– that any presumption against the implied repeal of common
law tort remedies otherwise available to protect people from negligent or botched
utilization review procedures is rebutted in this case.
CUÉLLAR, J.
I CONCUR:
GROVER, J.*
_____________________
* Associate Justice of the Court of Appeal, Sixth Appellate District, assigned
by Chief Justice pursuant to article VI, section 6 of the California Constitution.
6
See last page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion King v. CompPartners, Inc.
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 243 Cal. App. 4th 685
Rehearing Granted
__________________________________________________________________________________
Opinion No. S232197
Date Filed: August 23, 2018
__________________________________________________________________________________
Court: Superior
County: Riverside
Judge: Sharon J. Waters
__________________________________________________________________________________
Counsel:
Law Offices of Patricia A. Law, Patricia A. Law, Jonathan A. Falcioni; Arias & Lockwood and Christopher
D. Lockwood for Plaintiffs and Appellants.
Smith & Baltaxe and Bernhard Baltaxe for California Applicants’ Attorneys Association as Amicus Curiae
on behalf of Plaintiffs and Appellants.
Francisco J. Silva, Long X. Do, Lisa Matsubara and Stacey B. Wittorff for California Medical Association
as Amicus Curiae on behalf of Plaintiffs and Appellants.
Charles Edward Clark for California Society of Industrial Medicine and Surgery, Inc., as Amicus Curiae on
behalf of Plaintiffs and Appellants.
Joshua S. Meltzer; Munger, Tolles & Olson, Fred A. Rowley, Jr., Jeffrey Y. Wu; Murchison & Cumming,
William D. Naeve, Ellen M. Tipping, Terry L. Kesinger and David A. Winkle for Defendants and
Respondents.
Law Offices of Alweiss & McMurtry and Michael A. Marks for California Workers’ Compensation
Institute and American Insurance Association as Amici Curiae on behalf of Defendants and Respondents.
Crowell & Moring, David D. Johnson; Lewis Brisbois Bisgaard & Smith and Raul L. Martinez for National
Association of Independent Review Organizations, Coventry Health Care Workers Compensation, Inc., and
ExamWorks, Inc., as Amici Curiae on behalf of Defendants and Respondents.
Mary C. Wickham, County Counsel (Los Angeles), Ralph L. Rosato, Assistant County Counsel, Derrick
M. Au, Principal Deputy County Counsel, Susan T. Collins and Emily A Grospe, Deputy County Counsel,
for County of Los Angeles as Amicus Curiae on behalf of Defendants and Respondents.
Page 2 – S231197 – counsel continued
Counsel:
Finnegan, Marks, Theofel & Desmond and Randall G. Poppy for California Chamber of Commerce, the
National Council of Self-Insurers, Property Casualty Insurers Association of America doing business in
California as Association of California Insurance Companies (PCI) and CAJPA as Amici Curiae on behalf
of Defendants and Respondents.
Fred J. Hiestand for the Civil Justice Association of California as Amicus Curiae on behalf of Defendants
and Respondents.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Patricia A. Law
Law Offices of Patricia A. Law
10837 Laurel Street, Suite 101
Rancho Cucamonga, CA 91730
(951) 683-8320
Christopher D. Lockwood
Arias & Lockwood
1881 South Business Center Drive, Suite 9A
San Bernardino, CA 92408
(909) 890-0125
Fred A. Rowley, Jr.
Munger, Tolles & Olson
350 South Grand Avenue, 50th Floor
Los Angeles, CA 90071-3426
(213) 683-9100