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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

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

A five-year-old special education student was enrolled in the Wyoming Valley West School District and attended the State Street Elementary School during the 2024-2025 school year. The student refused to clean up classroom toys at dismissal. When his teacher allegedly grabbed him by the wrist to walk him back to his seat, the student dropped to the floor and began crying. The teacher then allegedly grabbed the student by the ankle and dragged him across the floor. Following an investigation, criminal charges were not advanced by the county DA, and the school permitted the teacher to return to the classroom. The student’s parents sued, lodging thirteen legal counts under both state and federal law, which sought monetary damages from the teacher, the school district, the superintendent, the principal, and the director of special education. The plaintiff’s 42 USC 1983 claims were dismissed as to the school district for failure to allege a policy or custom violation, and the failure to alleged deliberate indifference in the failure-to-train context. As to the superintendent, building principal, and special education director, the Section 1983 claims were also dismissed for failure to allege personal involvement on the part of the individuals. Regarding an equal protection claim asserted against all defendants, the motion to dismiss was also granted for a failure to advance a plausible equal protection claim, holding that “plaintiffs' single-act allegations do not include a factual basis to even infer that the act was motivated by discriminatory animus rather than some other non-discriminatory impulse.” The court further dismissed the plaintiff’s negligence-based claims including negligence against the teacher and district administrators, NIED, and vicarious liability under the Political Subdivision Tort Claims Act (PSTCA). The federal claims under the IDEA, Section 504, and the ADA were also dismissed in various respects. The IDEA claim was dismissed against all defendants with prejudice for failure to exhaust administrative remedies. The Section 504 claims against the individual defendants were also dismissed with prejudice, as districts, not individuals, are the recipients of federal funds under Section 504. However, the Section 504 and ADA claims were dismissed without prejudice as to defendant Wyoming Valley West, and the plaintiff was permitted leave to amend.

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.