Special Workers' Compensation Alert - What Now? A Protz Primer

July 18, 2017

by Audrey J. Copeland, Esq. & Francis X. Wickersham, Esq.

“What now?” That was the most frequently asked question by workers’ compensation lawyers and judges in hearing offices across the state the day after the Supreme Court of Pennsylvania dropped its landmark decision in Protz v. Workers’ Comp. Appeal Bd. (Derry Area Sch. Dist.), 2017 Pa. LEXIS 1401 (Pa. June 20, 2017). There were no hard answers—mostly conjecture, speculation and predictions. For the uninitiated, in Protz, the Pennsylvania Supreme Court found the IRE provisions of Section 306(a.2) of the Pennsylvania Workers’ Compensation Act to be unconstitutional for improperly delegating legislative authority to the American Medical Association (AMA) and severed it from the Act in its entirety.

“What now?” is not the only question being asked in Workers’ Compensation Land. The question that quickly follows is whether Protz is retroactive. After all, the Pennsylvania Supreme Court’s opinion was silent on the issue. So, does Protz retroactively invalidate all IREs dating back to the time when Section 306(a.2) was passed? It can be said with confidence that this is the position the claimant’s bar will be pushing, since the court struck Section 306(a.2) from the Act. But there’s no need to roll over. A valid argument can be made that Protz does not have that level of retroactivity, and it is an argument that has some juice.

In Blackwell v. Commonwealth State Ethics Commission, 567 A.2d 630 (Pa. 1989)(Blackwell II), the Pennsylvania Supreme Court struck down a statute as an unconstitutional delegation of legislative power. The court then granted reargument limited to the question of the retrospective application of its decision. Blackwell v. Commonwealth of Pennsylvania State Ethics Commission, 573 A.2d 536 (Pa. 1990). On reargument, the court held that the decision applied retroactively because the legal principle on which the decision was based, that legislators may not delegate their power, was a settled principle and not a new rule of law. But the court explained that retroactive application meant that the new decision applied only to cases still pending at any stage of the proceedings and in which the issue was preserved. Blackwell v. Commonwealth of Pennsylvania, States Ethics Commission, 589 A.2d 1094 (Pa. 1991)(Blackwell III). Reargument was not requested in Protz, so there may be no quick resolution of the retroactivity issue.

The Protz opinion should give employers some hope to fight attempts made to reinstate benefits in cases where the period of partial disability based on an IRE of less than 50% has lapsed. Employers can also argue against retroactive application of Protz in cases where there was an adjustment to partial disability status based on a Notice of Change in Status that was never challenged within 60 days as required by the Act. Additionally, employers can argue res judicata against attempts to reinstate benefits in cases where there was a judicial determination that a claimant was partially disabled due to an impairment rating of less than 50% and no appeal was ever filed.

As for current cases, it is unlikely that an argument that Protz does not have retroactive effect because the issue was never preserved will fly with Workers’ Compensation Judges or the Workers’ Compensation Appeal Board. The Commonwealth Court has taken the position that in matters commenced before its decision in Protz, where the claimant raised the issue at the first opportunity to do so, a Protz challenge can be raised for the first time on appeal because the appeal involves the validity of a statute. See Beasley v. Workers’ Comp. Appeal Bd. (Peco Energy Co.), 152 A.3d 391, 399 (Pa. Cmwlth. 2016) (“Under both Section 703 of the Administrative Agency Law and Pa. R.A.P. 1551(a), claimant was allowed to raise the issue of the improper use of the Sixth Guide on appeal.”). If a claimant did not raise a Protz challenge in a pending IRE Modification Petition prior to the Supreme Court’s opinion, they most certainly will now. Modification Petitions based on an IRE that are in litigation before a Workers’ Compensation Judge or the Appeal Board should be withdrawn. Failure to do so would be folly and potentially subject employers to sanctions in the form of penalties and counsel fees.

So, for now, the best answer to “What now?” is to develop a sensible and pragmatic game plan for the coming challenges to past IREs. Depending on the particular IRE situation you are faced with, it might be best to fight, or it might be best to retreat. The Supreme Court of Pennsylvania will likely have to wrestle with Protz again and decide the retroactivity issue, and the future of IREs in Pennsylvania will be in the hands of the legislature. In the meantime, pick your battles wisely.

_{This Special Alert has been prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects.}