Three Blind Mice

WDC Journal Edition: Winter 2007
By: Andy Quartaro - Peterson, Johnson & Murray, S.C.

The Labor and Industry Review Commission (hereinafter referred to as “LIRC”) is an independent agency of Wisconsin. It is structured as a three-member commission and was created to administer Worker’s Compensation, Unemployment Compensation, and Equal Rights Law. The members are appointed by the Governor, subject to confirmation by the Senate, and serve staggered six-year terms.

The LIRC is responsible for deciding appeals of decisions of ALJ’s (administrative law judges) in its three assigned divisions. When deciding an appeal, the LIRC reviews the evidence and arguments, and may consult with the ALJ before it issues a written decision affirming, reversing, or modifying the ALJ’s decision, or directing further proceedings. These decisions can be appealed to the circuit court. Procedures in Worker’s Compensation cases are governed by the Wisconsin Statutes and Administrative Code.[i]

LIRC’s Role

The LIRC is afforded broad authority in its review of ALJ decisions. It must meet some loose requirements before overturning an ALJ decision, but the LIRC’s finding will generally be given a good deal of deference by the court.

LIRC is allowed to overrule credibility determinations of ALJs, with the prerequisite being that the commissioners must hold a credibility conference to obtain the ALJ’s impressions concerning the witnesses’ demeanor and credibility.[ii] Though the LIRC has broad authority to reverse a credibility finding, due process requires that the party is at least afforded the right to know that the LIRC was aware of the examiner’s personal impressions of the material witnesses.[iii]

Judicial review of Worker's Compensation decisions is confined to questions of law and there are only three grounds upon which a reviewing court may overturn a LIRC decision. [iv] They are: (1.) That the LIRC acted without or in excess of its powers; (2.) That the order or award was procured by fraud, or; (3.) That the findings of fact by the LIRC do not support the order or award.[v]. LIRC's findings of fact are conclusive if supported by substantial and credible evidence and in the absence of fraud.[vi] [vii] The actual standard is set forth in Wis. Stat. § 102.23, which states:

“The court shall not substitute its judgment for that of the commission as to the weight or credibility of the evidence on any finding of fact. The court may, however, set aside the commission's order or award and remand the case to the commission if the commission's order or award depends on any material and controverted finding of fact that is not supported by credible and substantial evidence.”

So there you have it. Despite its alleged independent nature, the LIRC is comprised of government appointees who are seated in their positions for six-year terms, and is left largely unchecked by the court. One can certainly see where there is potential for some political influence to creep into their decisions. So what do the numbers say?

The Numbers

The LIRC website contains statistical information for each year regarding their decisions. According to the 2006 statistics, 64%, or 81/126 applicant appeals were affirmed. This includes modifications. The following chart from the website sets forth the numbers in a much more comprehensive manner.


2006 -- WC DECISIONS ISSUED BY TYPE OF APPELLANT[viii]:

Total Applicant Appeals

126 (45% of all appeals)

Affirmed (includes modifications)

81/126

-

64%

Affirmed in part/Reversed in part

9/126

-

7%

Reversed

19/126

-

15%

Remand for Approval of Compromise

7/126

-

6%

Remand for New Findings & Order

2/126

-

2%

Remand/Other

1/126

-

1%

Dismissed/no jurisdiction

5/126

-

4%

Dismissed/late petition

1/126

-

1%

Petition withdrawn

1/126

-

1%

Total Respondent Appeals

141 (50% of all appeals)




Affirmed (includes modifications)

90/141

-

64%

Affirmed in part/Reversed in part

6/141

-

4%

Reversed

8/141

-

6%

Remand for Approval of Compromise

25/141

-

18%

Remand for New Findings & Order

5/141

-

4%

Remand/Other

2/141

-

1%

Petition withdrawn

5/141

-

4%

Applicant & Respondent Appeals

15 (5% of all appeals)




Affirmed (includes modifications)

5/15

-

33%

Affirmed in part/Reversed in part

7/15

-

47%

Reversed

1/15

-

7%

Remand for Approval of Compromise

2/15

-

13%



This means that of the 126 applicant appeals decided in 2006, LIRC in some way increased the award or otherwise found in favor of the applicant about 25% of the time (reversals, partial reversals, and remands.) This does not take into account any times that LIRC affirmed the ALJ’s decision, but modified the award slightly. This percentage may not seem particularly shocking on its face. However, consider the same measure of appeals from 2000, when the Republicans were in charge.


2000 -- WC DECISIONS ISSUED BY TYPE OF APPELLANT[ix]:

Appeals decided on the merits:

Applicant Appeals

162 (49% of appeals decided on the merits)


Affirmed

146/162

-

90.1%


Reversed

5/162

-

3.1%


Modified*

11/162

-

6.8%

Respondent Appeals

149 (46% of appeals decided on the merits)


Affirmed

91/149

-

61.1%


Reversed

28/149

-

18.8%


Modified*

30/149

-

20.1%

Applicant AND Respondent Appeal

17 (5% of appeals decided on the merits)


Affirmed

6/17

-

35.3%


Reversed

0/17

-

0.0%


Modified*

11/17

-

64.7%


Total decided on merits:

328





If you are like me, you didn’t go to law school to look at numbers in charts. But even to the most statistically-challenged of us, the disparity is obvious. The 2000 LIRC affirmed the ALJ’s decision in applicant appeals 90% of the time. That is quite a far cry from 2006, where only 64% of ALJ’s decisions were affirmed in applicant appeals.

I also considered 2007 cases thus far (January through October), and the statistics are right in line with last year’s. Of the 163 total decisions so far (all appeals, not just applicant appeals), LIRC has reversed, remanded or modified approximately 26 ALJ decisions in favor of the applicant. While the actual tally won’t be in until the end of the year, it doesn’t appear that we’re in for any surprises.

The Cases

Considering the huge disparity, one cannot help but wonder how this translates in the actual decisions. Here are some of examples of LIRC decisions this year. These cases all involve the LIRC reversing the ALJ and increasing the applicants’ awards in what can only be described as economic redistribution.


Paul D. Nordval v. J H Hassinger, Inc
.[x]

In this case, the applicant submitted a petition for review after the ALJ found that he was not entitled to prospective medical treatment for an accidental knee injury. The applicant was on a bricklaying job and had two accidents in one day. The applicant saw several doctors and was diagnosed with a knee strain. The doctors’ opinions differed on whether he needed arthroscopic surgery. The ALJ credited the opinion of the doctor who opined that the strain should have healed within one to two months and that any further treatment related to a pre-existing condition. The applicant had previously had arthroscopic surgery for a knee injury in 1999 which had required lateral and menial meniscectomies. The MRI also showed degenerative changes in his knee. The ALJ further noted that the applicant had very little swelling after the injury which suggested only a minor soft tissue injury.

LIRC conferred with the ALJ, who believed that the medical records did not support the applicant’s claim. LIRC reversed the findings of the ALJ and found that the applicant needed arthroscopic surgery as a result of the work injuries.


Carla A. Emmrich v. Gehl Guernsey Farms, Inc.[xi]

The applicant in this case petitioned for commission review based on her claim that she suffered an occupational low back injury. The ALJ had found that the injury was not occupational. LIRC reversed.

The applicant assembled nacho cheese dispensers. This required moving boxes of parts onto a cart, transporting them to her workstation, pulling the parts out of the boxes and assembling the machines. The boxes came in three sizes, 15 pounds, 17 pounds, and 45-50 pounds.

The ALJ found the applicant’s supervisor credible when he testified that the applicant only had to lift one 50 pound box once each day. He also found the applicant’s credibility suspect given the existence of a videotape of her at work where she never lifted any boxes. Moreover, the applicant had a long history of back complaints and had a hysterectomy performed in 2000 in the hopes of alleviating her back pain. This was unsuccessful and her pain continued. Further, the applicant did not begin attributing her back complaints to her job duties until 2003.

The LIRC agreed that the applicant had an underlying back condition, but found that her work duties were a material causative factor in the onset or progression of that condition. The commission reversed the ALJ’s decision to that effect, finding the applicant credible and awarding her compensation for permanent partial disability and temporary total disability.


Terry Hintz v. Underground Pipeline, Inc.[xii]

This case involved an applicant seeking additional permanent partial disability (above the 12% conceded by the employer) in the form of loss of earning capacity for a cervical injury. LIRC reversed the ALJ’s decision in part, finding an additional 28% permanent partial disability.

Part of the ALJ’s credibility determination was based on a video showing the applicant lifting objects weighing at least 35 pounds, pushing a power mower over uneven terrain and operating a riding mower. According to the tape, the applicant moved about with relative ease. The LIRC did not agree with the ALJ that this made the applicant less credible. Although the LIRC agreed that the applicant did not make a sincere effort to find work, LIRC still found that he sustained a 40% loss of earning capacity, which amounted to an additional 28% permanent partial disability.



As employers and worker’s compensation carriers know, it has always been difficult to prevail at the hearing level with an ALJ. In the past, there was some hope that LIRC would reverse an unjust decision. This hope appears to be nothing more than a flicker. Now, even if an employer or worker’s compensation carrier prevails at the hearing level, there is a strong possibility that LIRC will reverse the decision and find in favor of the applicant. Because the courts must give significant deference to a LIRC decision, appealing a LIRC decision is a risky proposition as there is a good chance bad law will be created.


[i]Worker’s Compensation Act, Chapter 102, Wis. Stats., Wis. Admin. Code Ch. LIRC 1, 3, and Wis. Admin. Code Ch. DWD 80.

[ii]Hermax Carpet Marts v. Labor & Industry Review Comm’n, 220 Wis. 2d 611, 583 N.W.2d 662 (Ct. App. 1998)

[iii]Braun v. Industrial Comm., 36 Wis. 2d 48, 57-58, 153 N.W.2d 81 (1967), citing Transamerica Ins. Co. V. Department of ILHR, 54 Wis. 2d 272, 195 N.W.2d 656 (1972).

[iv]Thurner Heat Treating Corp. v. Labor and Industry Review Commn, 218 Wis. 2d 830, 581 N.W.2d 593 (Ct. App. 1998)

[v]Section 102.23(1)(e), Stats

[vi]Section § 102.23

[vii]Ray Hutson Chevrolet, Inc. v. LIRC , 186 Wis.2d 118, 124, 519 N.W.2d 713, 716 (Ct. App. 1994).

[viiiThe State of Wisconsin Labor and Industry Review Commission. “Statistics.” October 25, 2007

[ix]The State of Wisconsin Labor and Industry Review Commission. “Statistics.” October 25, 2007

[x]2007 WL 2972085 (Wis.Lab.Ind.Rev.Com.)

[xi]2007 WL 2051507 (Wis.Lab.Ind.Rev.Com.)

[xii]2007 WL 1058936 (Wis.Lab.Ind.Rev.Com.)