Pennsylvania Supreme Court Clarifies "Reasoned Decision" Under Section 422(A) 12/03

Defense Digest

Pennsylvania Supreme Court Clarifies "Reasoned Decision" Under Section 422(A)

The Pennsylvania Supreme Court, in an opinion authored by Justice Ronald D. Castille regarding the case of Daniels v. W.C.A.B. (Tristate Transport), 828 A.2d 1043 (Pa. 2003), recently addressed the "reasoned decision" requirement set forth in Section 422(a) of the Pennsylvania Workers' Compensation Act in a case where the Workers' Compensation Judge was presented with conflicting evidence.  Summarily, the Supreme Court vacated the Commonwealth Court's decision and order, and remanded the matter to the Workers' Compensation Judge to issue an amended decision under Section 422(a) for the purpose of explaining the basis for her credibility determinations.  The Court held that the Workers' Compensation Judge's credibility determination did not meet the standard found in Section 422(a) in that it was lacking an articulation of the basis for her conclusion on credibility. 

The claimant was involved in a motor vehicle accident on December 13, 1990, while in the course and scope of his employment with Tristate Transport.  A workers' compensation claim was subsequently filed, alleging an injury to his lumbosacral spine, and continuing lower back pain with radiation into his lower extremities.  By way of decision and order dated August 10, 1991, the Workers' Compensation Judge held that the claimant sustained a work-related injury and awarded benefits thereafter. 

The present litigation was initiated by the filing of employer's termination petition, alleging that the claimant's disability had ceased, and that he was able to return to unrestricted work as of November 7, 1991.  The parties endeavored to obtain their respective medical evidence, and the status of the claimant's work injury was subsequently disputed.

The employer submitted the deposition testimony of John T. Williams, M.D., who is a Board certified orthopedic surgeon.  Based on an independent medical evaluation, Dr. Williams offered the opinion that the claimant sustained an acute lumbosacral strain and sprain as a result of the vehicular accident, which had since resolved.  He further opined that the claimant was able to return to work without restriction.  The Court noted that Dr. Williams did not have available for his review any radiographic studies, CT scan, or nerve conduction tests which had been previously undertaken between December, 1990, and November 7, 1991. 

The claimant presented the testimony of Steven Fabian, M.D., a family physician and the claimant's treating physician who had been treating the claimant since the time of injury.  As of the time of the most recent examination, the claimant continued to exhibit complaints of pain in the lumbar spine and legs.  Dr. Fabian rendered the opinion that the claimant's limitation of cervical flexion, extension, and rotation had improved, but that the claimant suffered from post-traumatic cervical and lumbar sprain with a protruding disc at the L4-L5 level.  Dr. Fabian did review the diagnostic studies, which revealed a mildly protruding disc at the L4-L5 level, though a separate EMG was within normal limits.  He concluded that the claimant was unable to return to his time-of-injury job as an ambulance driver, or any other employment for that matter, based on the ongoing complaints of subjective pain, exacerbated by physical activity.

For his part, the claimant testified before the Workers' Compensation Judge specifically regarding ongoing complaints of lower back and leg pain since the time of the work injury.  He testified regarding self-perceived limitations, including his inability to stand or sit for more than one hour, increased pain in his lower back upon prolonged walking, and his inability to lift more than 20 pounds.  He testified that he felt incapable of returning to his time-of-injury position, the duties associated with which included lifting patients and equipping ambulances with oxygen tanks weighing up to 100 pounds.  He was still treating with Dr. Fabian, and undergoing formal physical therapy three times per week, and he remained on prescribed pain medication.

The Workers' Compensation Judge circulated a decision on March 14, 1997, ordering the termination of the claimant's benefits as of November 7, 1991.  In so finding, the Workers' Compensation Judge issued the following findings:

16.Based upon a review of the evidentiary record as a whole this judge finds the testimony of the claimant is not credible or persuasive. 17.Based upon a review of the evidentiary record as a whole, this judge finds the opinions of Dr. Williams to be more credible and persuasive than the opinions of Dr. Fabian. Accordingly, the opinions of Dr. Fabian are rejected where inconsistent with the opinions of Dr. Williams. 18.This judge finds claimant was fully recovered from his December 13, 1990, work injury as of November 7, 1991.

Workers' Compensation Judge's decision at page 4.

The claimant appealed to the Workers’ Compensation Appeal Board, which affirmed the Workers' Compensation Judge's termination decision.  A timely appeal was taken to the Commonwealth Court, sitting en banc, which affirmed by a 5-2 vote.  The Commonwealth Court specifically held that questions of credibility and weight of the evidence fall within the province of the Workers' Compensation Judge, who is the ultimate finder of fact.  Judge Friedman, joined by Judge Pellegrini, dissented, noting that the Workers' Compensation Judge "made no attempt to explain, much less to adequately explain, her reasons for rejecting or discrediting competent evidence" as required by Section 422(a) of the Act.  While recognizing the authority of the Workers' Compensation Judge to render credibility determinations, the dissent noted the Workers' Compensation Judge's failure in this matter to explain the basis for her credibility determination where the evidence was conflicting, which in turn failed to satisfy the reasoned decision requirement. 

Upon appeal to the Pennsylvania Supreme Court, the legal issue under review involved the proper construction of the reasoned decision requirement in a case with conflicting evidence.  The Court reviewed its interpretation of Section 422(a), which provides that the parties in a workers' compensation case are "entitled to a reasoned decision containing findings of fact and conclusions of law based upon the evidence as a whole which clearly and concisely states and explains the rationale for the decisions so that all can determine why and how a particular result was reached."  77 P.S. §834.  The Act goes on to set forth that, "When faced with conflicting evidence, the Workers' Compensation Judge must adequately explain the reasons for rejecting or discrediting competent evidence…[T]he adjudication shall provide a basis for meaningful appellate review." 

The claimant argued that there was no adequate explanation set forth by the Workers' Compensation Judge in the context of her credibility determinations, in direct violation of the reasoned decision requirement of Section 422(a).  The claimant's argument was centered on the fact that there was conflicting evidence as to whether the claimant had fully recovered from his work injury.   The claimant asserted that it was not enough for the Workers' Compensation Judge to summarize the testimony of the witnesses and render conclusions pertaining to her credibility determinations without an attempt to explain the reasons for rejecting the claimant's evidence.  The claimant further averred that such explanation would avoid speculation about what credibility determinations were made and establishing possible meaningful appellate review. 

Conversely, the employer, while not disputing the validity of the reasoned decision requirement, set forth that all parties were able to ascertain how and why the Workers' Compensation Judge directed a termination of the claimant's benefits.  The employer contended the Workers' Compensation Judge needed only to demonstrate that all pertinent evidence was considered prior to rendering her decision.  The employer further argued that the Workers' Compensation Judge was not held to providing detailed factors or considerations leading to determinations of credibility and evidentiary weight, because this could create the potential for an appellate court to supplant the Workers' Compensation Judge's undisputed authority to render credibility and weight determinations, which are not subject to review on appeal. 

As noted, the Supreme Court vacated the Commonwealth Court's order, and remanded to the matter to the Workers' Compensation Judge to issue an amended decision under Section 422(a), explaining the basis for her credibility determination.  The basis of the Court's decision was such that, while the Workers' Compensation Judge summarized the testimony of the witnesses presented, thus demonstrating her grasp of the complete evidentiary record, there was no objective basis articulated to account for why she found the employer's medical expert to be more credible and persuasive than that of the claimant.  Since the Workers' Compensation Judge did not offer a basis for her conclusions concerning her credibility determinations, her decision did not meet the reasoned decision standard set forth in Section 422(a).  The Court acknowledged the narrow standard of review of such articulation, but did not agree with employer's argument that the articulation itself would be unreviewable.  The Court noted that the Workers' Compensation Judge's explanation of the basis for her decision may in itself reveal distinct legal error; therefore, there was no assumption on the Court's part that the remand for the Workers' Compensation Judge's articulation was pointless. 

In rendering its determination, the Court reviewed relevant case law addressing the reasoned decision requirement, centering its analysis on those cases that involved disputed expert medical evidence.  The Commonwealth Court, Supervalu, Inc. v. W.C.A.B. (Bowser), 755 A.2d 715, 721 (Pa. Cmwlth. 2000), found a reasoned decision where the Workers' Compensation Judge provided an adequate explanation for his or her determination by "outlining the evidence considered, stating the credible evidence on which he relied, and setting forth the reasons for the ultimate decision."

In PEC Contracting Engineers v. W.C.A.B. (Hutchinson), 717 A.2d 1086, 1088-89 (Pa. Cmwlth. 1998), the Commonwealth Court has also held that a Workers' Compensation Judge's determination is adequate as a reasoned decision, which sets forth that a medical expert was credible based on his familiarity with the claimant as a result of being his treating physician on a long-term basis.  Conversely, the employer's medical expert witness examined the claimant twice, during which time a total of approximately 45 minutes was spent examining the claimant, and the examiner testified on behalf of employers more than 90 percent of the time. 

These cases were contrasted with Hahnemann University Hospital v. W.C.A.B. (Wallace), 718 A.2d 391 (Pa. Cmwlth. 1998), wherein the Commonwealth Court held that the Workers' Compensation Judge failed to issue a reasoned decision by neglecting to adequately explain why he rejected competent, conflicting evidence.  In that case, while the Workers' Compensation Judge summarized the testimony of the claimant and the expert witnesses, in discussing the conflicting medical evidence, the Workers' Compensation Judge simply noted that the opinions of the claimant's medical witnesses were more credible and persuasive than the testimony and opinions of the employer's medical witnesses.  Nothing more was added to explain the basis for these credibility determinations.

In Daniels, the court references the "relative informality" of adjudicating workers' compensation cases, which it claimed was necessary to facilitate speedier decisions in a field where the volume of cases is heavy.  Consequently, it is customary that testimony, in particular expert testimony, is routinely obtained by way of deposition, as opposed to live before the Workers' Compensation Judge.  Typically, as was the case in Daniels, the conflicting medical testimony is offered by way of deposition.  As such, the Workers' Compensation Judge was unable to observe the respective demeanors of  the experts, and the ultimate resolution of the conflicting evidence cannot, therefore, be supported by a broad statement that one expert was found more credible and persuasive than the other.  In such cases where the Workers' Compensation Judge is unable to subjectively measure the credibility of any given witness via live testimony, "some articulation of the actual objective basis for the credibility determination must be offered for the decision to be a 'reasoned' one which facilitates effective appellate review." Id. at 1053

The Court referenced the Workers' Compensation Judge's ability to measure the claimant's credibility and demeanor, since he testified at the time of hearing.  However, the Workers' Compensation Judge set forth no objective basis for deeming the deposition testimony and opinions of the employer's medical witness to be more credible and persuasive than those of the claimant.  Therefore, the Court's holding is based on the judge's failure to articulate the basis of her conclusions regarding credibility. 

In dictum, the Court appears to be adhering to the notion that, if a medical expert were to testify live before the Workers' Compensation Judge, such articulation is not mandatory to comply with Section 422 (a).  In the predominance of cases where medical experts testify by way of deposition, however, a Workers' Compensation Judge's failure to explain the basis of his or her credibility determinations should be considered in direct violation of the aforementioned section.  Those cases where the Workers' Compensation Judge offers mere summaries of the witness testimony and conclusory findings, while fueling speculation as to why those credibility determinations were made, should be considered to be a violation of Section 422(a). 

Justice Sandra Schultz Newman authored a concurring and dissenting opinion, which elaborates on the issue of witness credibility.  Justice Newman references her concern over the suggestion that a Workers' Compensation Judge may insulate his findings from review by denominating them credibility determinations.  Absent any findings of clear error on review, there is in fact nothing to review on appeal if no rationale is provided for credibility determinations of the Workers' Compensation Judge.  Justice Newman goes on to contend that a Workers' Compensation Judge may not make credibility determinations based solely on "instinct."  An explanation from the Workers' Compensation Judge is necessary to determine whether the reasons for acceptance or rejection of any given testimony were improper.  As such, a mere credibility determination does not satisfy the substantive purposes of the fact finding requirement. 

Justice Newman concludes that, if the factual basis for a decision includes a determination based predominantly on the credibility of a witness, the Workers' Compensation Judge must identify whether reliance was placed on observational credibility and/or substantive credibility, while providing any specific evidence of the observed demeanor, manner, or attitude of the witness, or any perceived inconsistencies or lack thereof.   Her dissent from the majority opinion was based on the notion that a Workers' Compensation Judge may simply set forth credibility determinations without accompanying rationale. 

*Dan is an associate in our Pittsburgh, PA office.  He can be reached at (412) 803-1181 or ddeitrick@mdwcg.com.