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What's Hot in Workers' Comp

The New Jersey Supreme Court addresses medical marijuana in workers’ compensation cases.

Hager v. M&K Constr., 246 N.J., 1247 A.3d 864 (2021) and Calmon v. Pepsi Bottling Group, No. A-2160-19, (App. Div. May 11, 2021)

July 1, 2021

by Kiara K. Hartwell

In Hager v. M&K Constr., the respondent, M&K Construction, appealed a workers’ compensation order to reimburse the petitioner for medical marijuana, which was prescribed after a work-related injury. The petitioner was injured in August 2001 while employed as a laborer for M&K. He underwent two back surgeries, but due to persistent pain, he took opioid medication. He began treating with Dr. Joseph Liotta in 2016, when he was enrolled in the medical marijuana program as an alternative pain treatment and a means to wean him off opioids. Although he started with an ounce per month, his dose increased to the maximum allowed—two ounces—which cost more than $600.00 per month.

At trial, Dr. Liotta testified for the petitioner, noting that he suffered adverse side effects from opioids and was “motivated” to stop, which happened a month after starting medical marijuana. Dr. Liotta indicated there is a smaller risk of addiction to marijuana and fewer serious side effects. The petitioner also testified that it helped him wean off opioids, lessened his pain and helped with muscle spasms. In addition, Dr. Cary Skolnick testified for the petitioner that he needed long-term pain management as a result of the August 2001 injury and that he was 100% permanently and totally disabled, apportioning 65% for the back injury and 35% due to medication effects.

On the other hand, Dr. Gregory Gallick testified for the respondent, finding the petitioner to be 12.5% permanently disabled and still capable of certain jobs. Dr. Robert Brady also testified in describing side effects and risks of medical marijuana. He noted both medical marijuana and opioids were equally psychologically addictive, though opioids were more physically addictive. He opined that medical marijuana was not proven effective for conditions such as the petitioner’s and, rather, the best form of relief would be physical therapy and home exercise.

The Workers’ Compensation Judge found 65% permanent partial disability, apportioning 50% for the orthopedic condition and 15% due to medical marijuana effects. In choosing between medical marijuana and opioids, the court noted medical marijuana was the “clearly indicated option” and ordered M&K to reimburse the petitioner for its costs. The judge found Dr. Liotta and the petitioner’s testimony to be more credible than that of Dr. Brady, specifically emphasizing the petitioner’s ability to wean off opioids. The court indicated that “the Legislature intended to make available the benefits of medical marijuana to persons displaying a medical need, despite the federal attitude toward the substance.” Finally, the judge rejected the notion that M&K was like a private health insurer or government medical benefit program, which would not be required to reimburse medical marijuana costs.

The Appellate Division affirmed the workers’ compensation court’s findings and further went on to analyze whether the New Jersey Jake Honig Compassionate Use Medical Cannabis Act (Compassionate Use Act) was preempted by the federal Controlled Substances Act (CSA). In doing so, the Appellate Division found the Compassionate Use Act did not require employers to “possess, manufacture, or distribute” marijuana per the CSA. In addition, the Appellate Division concluded there was no aider-and-abettor liability for assisting in the petitioner’s possession as M&K did not have the requisite intent and, thus, did not face a credible threat of federal prosecution.

The Supreme Court then granted M&K’s petition for certification. First, the Supreme Court considered M&K’s argument that it should not have to reimburse the petitioner for costs of medical marijuana under the Compassionate Use Act and N.J.S.A. 24:6I-14 as it exempts “a government medical assistance program or private health insurer” from reimbursement. The court rejected this argument, citing to the plain language of the statute and indicating a workers’ compensation carrier does not fall into either category. Furthermore, the court looked to the legislative intent in not specifically including workers’ compensation insurance in the Compassionate Use Act, as other states have done. Because the Legislature did not exclude workers’ compensation carriers and included “chronic pain” as a qualifying medical condition, M&K was not exempt from reimbursing the petitioner.

Next, the Supreme Court rejected M&K’s argument that medical marijuana was not a “reasonable and necessary treatment.” The court looked to a prior decision in Squeo v. Comfort Control Corp., 99 N.J. 588 (1985), where construction of an injured worker’s apartment was found to be reasonable and necessary. The Squeo court not only considered the petitioner’s loss of use of his arms and legs, but also the possible psychological harm due to the petitioner’s multiple suicide attempts after an offer for placement in a nursing home. Similarly, in this case, the court recognized a potential harm to the petitioner in continuing to use opioids. In addition, reimbursement of medical marijuana was noted to be much less unique than the construction of an apartment found in Squeo.

In returning to the first point, as the Supreme Court found M&K was obligated to reimburse the petitioner under the Compassionate Use Act and the workers’ compensation statute, the court then analyzed whether the federal CSA quashed M&K’s state law obligations. After finding guidance from the United States Supreme Court and several circuit courts, the court determined M&K could follow both the Compassionate Use Act and CSA, as the first does not create any obstacles in accomplishing congressional objectives. The court also acknowledged that its decision differed from other state supreme courts, but it noted they were not binding and that its decision was in line with legislative intent, an analysis of federal authorities and the principles of preemption.

Finally, the Supreme Court discussed M&K’s contention that reimbursing medical marijuana costs would be aiding and abetting the petitioner’s possession of marijuana. The court initially noted that M&K was not “electing” to aid the petitioner’s possession of marijuana but, rather, that it was being compelled by court order. Further, the court indicated M&K failed to demonstrate specific intent to aid-and-abet. Again, it was reiterated that M&K was being compelled by the court and, thus, could not be considered as intentionally committing an offense.

Approximately a month after the Supreme Court’s decision in Hager, the Appellate Division in Calmon v. Pepsi Bottling Group affirmed the workers’ compensation order to reimburse the petitioner for medical marijuana prescribed for a work-related back injury. As Hager addressed the same issues raised by Pepsi Bottling Group, the Appellate Division issued this decision after relying on Hager.

 

What’s Hot in Workers’ Comp is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication 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 when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2021 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

Delaware Superior Court Clarifies Pleading Standard for Legal Malpractice Claims

In the matter of Edelstein v. Kirschner, No. N25C-09-018 FJJ, 2026 Del. Super. LEXIS 45, at *1 (Super. Ct. Jan. 29, 2026), the plaintiff law firm sued its former client for unpaid legal fees in the amount of $4,399.35. The former client asserted a counterclaim alleging legal malpractice. More, specifically, the former client claimed that his lawyer committed malpractice be recommending that he settle an underlying lawsuit by entering into a stipulated judgment for an excessive amount with interest that was accruing at “an outlandish” interest rate. The law firm moved to dismiss the counterclaim on the basis that its former client had not alleged facts reflecting that he could prove the case within the case. That is, facts reflecting that his attorneys caused him to lose the underlying case. The Superior Court held that while a legal malpractice plaintiff in cases arising from underlying litigation must prove the case within the case to survive a summary judgment motion, he does not need to plead facts reflecting as much in order to survive a motion to dismiss. While this case addresses the pleading requirements of a legal malpractice case in Delaware, it also serves as reminder that chasing unpaid legal fees from a former client can often give rise to a legal malpractice counterclaim. Attorneys seeking to collect unpaid legal fees should ensure that the fees they seek are for a significant amount, which would be recoverable if a judgment is obtained. Otherwise, the effort could backfire.

Thought Leadership

Pennsylvania Supreme Court Takes Up the Gist of the Action Doctrine

The gist of the action doctrine has been a hot topic in legal malpractice cases in Pennsylvania over the last several years.  Beginning in 2014, the Pennsylvania courts applied the gist of the action doctrine to professional liability actions, following the Pennsylvania Supreme Court’s opinion in Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014).  In Bruno, the court applied the gist of the action doctrine to a professional negligence claim, and found that a negligence claim was not barred simply because the parties were in a contractual relationship where the gist of the claim sounded in negligence. Thereafter, courts in Pennsylvania applied the gist of the action doctrine to breach of contract claims as well, finding that where the allegations sounded in negligence, a plaintiff could not recast a negligence claim as one for breach of contract. This was important because of the distinction between statutes of limitations: negligence claims must be brought within two (2) years, while breach of contract claims can be brought within four (4) years.  Then, last year, the Pennsylvania Superior Court held that the gist of the action doctrine does not apply to breach of contract claims as seen through two opinions. These opinions were Swatt v. Nottingham Village, 342 A.3d 23 (Pa. Super. 2025) and Poteat v. Asteak, et al., 350 A.3d 198 (Pa. Super. 2025). That is, the gist of the action doctrine can bar a negligence claim but it cannot bar a breach of contract claim.  This month, the Pennsylvania Supreme Court granted the petition for allowance of appeal in Poteat.  The Supreme Court phrased the issue for consideration as follows: Whether the Superior Court majority’s holding conflicts with this Court’s holding in Bruno v. Erie Insurance Co., 160 A.3d 48 (Pa. 2014), as well as Superior Court opinions that applied Bruno, and departs from almost 200 years of controlling precedent that distinguishes between causes of action in contract and tort based upon the nature of the duty that was allegedly breached? Attorneys on both sides of legal malpractice matters no doubt look forward to clarification on these issues from our Supreme Court.

Thought Leadership

Appellate Division Affirms Dismissal of Legal Malpractice Counterclaim Against Martin Law Firm

In Martin v. Loury, 2026 N.J. Super. Unpub. LEXIS 1617 (App. Div. July 15, 2026), Martin Law Firm represented Kirk Loury in an employment matter Mr. Loury filed against his former employer, Concord Equity Group Advisors LLC (“Concord”). The allegations included, among other things, that Loury was not fairly compensated for his employment with Concord. After a bench trial finding in Loury’s favor, the Appellate Division remanded this matter in February 2016 for a second trial. During the second trial, Concord CEO, Lee Argush, testified to lower compensation estimate than first trial. On remand, the second trial judge awarded Mr. Loury the same damages as the first judge, finding Mr. Argush not credible. After the findings during the second trial, Martin Law Firm filed an action against Mr. Loury to recover legal fees and costs of representing Mr. Loury in a second bench trial and Mr. Loury filed a counterclaim against Martin Law Firm for legal malpractice, alleging he should have received an even higher award in the second bench trial. In this allegation, Mr. Loury, through his expert, claimed that Martin Law Firm should have recalled Mr. Loury to the stand to rebut Mr. Argush’s testimony to allege an alternative theory of damages. Mr. Loury’s expert admitted that the second judge already rejected Mr. Argush's theory and accepted Loury's damages theory. The trial court barred Mr. Loury’s expert and dismissed Loury's counterclaim with prejudice before convening the collection trial, and the jury ruled in Martin Law Firm’s favor. Mr. Loury appealed the trial court's pretrial rulings barring his liability expert from testifying in support of his legal malpractice counterclaim, denying his motion for summary judgment on that counterclaim, and denying his motion to amend his counterclaim by adding attorney Joseph A. Martin as a codefendant. In affirming the trial court’s decision, the Appellate Division held that the trial court properly excluded Loury’s expert testimony in the counterclaim against Martin Law Firm because the expert could not explain how calling Loury as a rebuttal witness would have increased damages when the second judge already rejected Mr. Argush's testimony and accepted Loury's damages theory, making the expert’s causation opinion speculative. The Appellate Division also held that the trial court properly denied Mr. Loury's summary judgment motion on his malpractice counterclaim because reasonable minds could differ on whether Mr. Martin's alleged failures would have changed the second judge's damages award, given the judge already found Mr. Argush not credible, creating genuine factual disputes precluding summary judgment. Also, the Appellate Division held that the trial court properly denied Loury's May 2023 motion to add Joseph Martin individually because the statute of limitations expired in February 2022, six years after the 2016 appellate remand when Mr. Loury incurred new legal costs, and relation back did not apply because Mr. Loury knew Mr. Martin's identity throughout and strategically chose to sue only Martin Law Firm in his 2019 counterclaim.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict.