Opinion ID: 2586149
Heading Depth: 2
Heading Rank: 1

Heading: The Apportionment Problem

Text: California's workers' compensation system was established to provide for the health, safety, and welfare of workers in the event of industrial injury by `relieving [them] from the consequences of any injury incurred by employees in the course of their employment.' ( Mathews v. Workmen's Comp. Appeals Bd. (1972) 6 Cal.3d 719, 731, fn. 8, 100 Cal.Rptr. 301, 493 P.2d 1165, quoting Stats.1917, ch. 586, § 1, p. 832; see also Claxton v. Waters (2004) 34 Cal.4th 367, 372, 18 Cal.Rptr.3d 246, 96 P.3d 496.) The panoply of benefits the system provides includes compensation for permanent disability. [Permanent disability is understood as `the irreversible residual of an injury.' ( Kopping v. Workers' Comp. Appeals Bd. (2006) 142 Cal.App.4th 1099, 1111, 48 Cal.Rptr.3d 618, quoting 1 Cal. Workers' Compensation Practice (Cont.Ed.Bar 4th ed.2005) § 5.1, p. 276, italics omitted.) A permanent disability is one `... which causes impairment of earning capacity, impairment of the normal use of a member, or a competitive handicap in the open labor market.' ( State Compensation Ins. Fund v. Industrial Acc. Com. (1963) 59 Cal.2d 45, 52, 27 Cal.Rptr. 702, 377 P.2d 902.) Thus, permanent disability payments are intended to compensate workers for both physical loss and the loss of some or all of their future earning capacity. (Lab.Code, § 4660, subd. (a); [3] Livitsanos v. Superior Court (1992) 2 Cal.4th 744, 753, 7 Cal. Rptr.2d 808, 828 P.2d 1195.) Permanent disability payments are calculated by first expressing the degree of permanent disability as a percentage [4] and then converting that percentage into an award based on a table. (§ 4658.) Until April 1972, the table was straightforward: an injured worker received four weeks of benefits for each percentage point of disability. (Former § 4658, added by Stats. 1959, ch. 1189, § 13, p. 3280; Fuentes, supra, 16 Cal.3d at p. 4, 128 Cal.Rptr. 673, 547 P.2d 449.) Thus, for example, a worker determined to have suffered 10 percent permanent disability would receive 40 weeks of benefits, while one with a 90 percent disability would receive 360 weeks of benefits. Employers must compensate injured workers only for that portion of their permanent disability attributable to a current industrial injury, not for that portion attributable to previous injuries or to nonindustrial factors. Apportionment is the process employed by the Board to segregate the residuals of an industrial injury from those attributable to other industrial injuries, or to nonindustrial factors, in order to fairly allocate the legal responsibility. ( Ashley v. Workers' Comp. Appeals Bd. (1995) 37 Cal.App.4th 320, 326, 43 Cal. Rptr.2d 589.) Under the pre-1972 table, apportionment to previous injuries was relatively straightforward. Because the additional compensation for each additional percentage point of disability was linear, it mattered not whether one focused on the difference in percent between the current level of disability and the previous level of disability, or the difference in dollars between the payout at the current level of disability and the payout at the previous level of disability; either method of subtraction would lead to the same current award. However, in 1971 the Legislature amended the table to create a sliding scale of benefits and more generously compensate for more severe disabilities. Under the new table, benefits rose not linearly but exponentially. Thus, for example, under the revised table a worker with a 10 percent disability would receive approximately three weeks of benefits for each percent of disability (for an award of 30.25 weeks), while a worker with a 90 percent disability would receive approximately six weeks of benefits for each percent of disability (for an award of 541.25 weeks). (Former § 4658, Stats.1971, ch. 1750, § 5, p. 3776; Fuentes, supra, 16 Cal.3d at p. 4, 128 Cal.Rptr. 673, 547 P.2d 449.) This amendment created a new apportionment problem in situations where a previously disabled worker suffered a new injury. Consider again the worker who was already 10 percent disabled, but after the new injury was 90 percent disabled. Under the new tables, the difference between the award for a 90 percent disability and the award for a 10 percent disability was no longer equal to the award for an 80 percent disability, the difference between these two disability levels. [5] Thus, it mattered whether one either (1) calculated the percentage of disability attributable to the new injury by subtracting the old rating from the new rating, then consulted the table for the award due this difference (an approach dubbed formula A ( Fuentes, supra, 16 Cal.3d at p. 5, 128 Cal.Rptr. 673, 547 P.2d 449)), or (2) consulted the table for the award due at the new disability rating, then subtracted from that the amount that would have been awarded under the old disability rating (an approach dubbed formula C (ibid.)). [6]