G. Werkheiser v. WCAB (DOT) (Complete Opinion)
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA Glen Werkheiser, : Petitioner : : v. : : Workers Compensation Appeal : Board (Department of Transportation), : Respondent : PER CURIAM No. 886 C.D. 2007 Argued: October 31, 2007 MEMORANDUM ORDER AND NOW, this 19th day of May, 2008, it is hereby ORDERED that the interlocutory appeal of Glen Werkheiser (Claimant) is DISMISSED for the reasons that follow: 1. On March 10, 2005, the Workers Compensation Judge (WCJ) issued a decision in which he concluded that, based on Baksalary v. Smith, 579 F. Supp. 218 (E.D. Pa. 1984), it is unconstitutional for an employer to take an offset against an injured worker s receipt of pension benefits under Section 204(a) of the Workers Compensation Act, Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §71(a), without first holding a pre-offset hearing. 2. On February 20, 2007, the Workers Compensation Appeal Board (Board) issued an interlocutory order vacating and remanding the matter to the WCJ for the reason that neither the WCJ nor the Board has authority to nullify the statute that they must enforce. The Board s order reads as follows: The Appeal of [Employer] is GRANTED. The Decision and Order setting aside [Employer s] Offset Notice and granting Claimant s Review Offset Petition is hereby VACATED and the matter is REMANDED for the [WCJ] to issue a Decision and Order on the merits of Claimant s Petition consistent with this Opinion. Board Opinion, February 20, 2007. 3. Claimant requested the Board to certify its February 20, 2007, order for immediate appeal to this Court pursuant to Section 702(b) of the Judicial Code, which provides: (b) Interlocutory appeals by permission. When a court or other government unit, in making an interlocutory order in a matter in which its final order would be within the jurisdiction of an appellate court, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the matter, it shall so state in such order. The appellate court may thereupon, in its discretion, permit an appeal to be taken from such interlocutory order. 42 Pa. C.S. §702(b) (emphasis added). Claimant s request to the Board stated, inter alia, that [t]he parties and the WCJ recognized that the WCJ did not have jurisdiction over the constitutional issue. Claimant s Petition to Amend the [Board s] Order of 2/20/2007 to a Final Order, ¶5, n.1. 4. On April 16, 2007, the Board granted Claimant s request. Board s order reads as follows: Claimant s Petition for Rehearing is hereby GRANTED. The Decision and Order of the Workers Compensation Appeal Board of February 20, 2007 in the matter at A05-0782 is hereby AMENDED to state that such Order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the Order may materially advance the ultimate termination of the matter. Board Opinion, April 16, 2007. The 5. Claimant then filed a petition for permission to appeal an interlocutory order with this Court, and this Court granted the appeal stating, in relevant part, as follows: [U]pon consideration of [Werkheiser s] petition for permission to appeal, and there being no response thereto, the petition is granted and the appeal is allowed from the order entered by the Workers Compensation Appeal Board on February 20, 2007, at No. A05-0782. Order of May 30, 2007. 6. After considering the briefs and hearing oral argument in this matter, this Court has concluded that it improvidently granted Claimant s petition for permission to appeal. All parties agree that the Board s interlocutory order correctly held that the WCJ lacked jurisdiction to decide the constitutional issue, a point on which there is no difference of opinion. 42 Pa. C.S. §702(b). Accordingly, reviewing the Board s interlocutory order will not advance the ultimate termination of the matter. Id. IN THE COMMONWEALTH COURT OF PENNSYLVANIA Glen Werkheiser, : : : : : Petitioner v. Workers' Compensation Appeal Board : (Department of Transportation), Respondent No. 886 C.D. 2007 Argued: October 31, 2007 : : OPINION NOT REPORTED DISSENTING OPINION BY JUDGE SMITH-RIBNER FILED: May 19, 2008 I respectfully disagree with the memorandum order of the majority to dismiss the interlocutory appeal filed by Glen Werkheiser (Claimant) because the Court's grant of permission to appeal under 42 Pa. C.S. §702(b) was improvidently made. The majority states that on March 10, 2005 the Workers' Compensation Judge (WCJ) issued a decision in which he concluded, based upon Baksalary v. Smith, 579 F. Supp. 218 (E.D. Pa. 1984), that it is unconstitutional for an employer to take an offset against an injured worker's receipt of pension benefits under Section 204(a) of the Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §71(a), without first holding a pre-offset hearing and that the Workers' Compensation Appeal Board (Board) vacated the WCJ's decision and remanded on the ground that neither the Board nor the WCJ had authority to nullify the statute that they must enforce. I point out, however, that the challenge of Claimant all along has been to the manner in which the pension offset is implemented, not to the substance of the statutory provision. Claimant does not assert and the WCJ did not hold that the legislature lacked authority to provide for pension offset to workers' compensation DAS-R - 4 benefits. Rather, Claimant asserts that the procedure for implementing the offset is analogous to the former provision under Section 413 of the Act, 77 P.S §774, for an automatic supersedeas upon the filing of a termination petition and a certification by the employer of return to work at equal or increased wages or a doctor's affidavit of full recovery, which the Federal District Court deemed to violate due process in Baksalary. Section 204(a) of the Act provides in relevant part: "[T]he benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award made under sections 108 [occupational disease] and 306 [partial and total disability], except for benefits payable under section 306(c) [specific loss]." Section 204(d) provides: "The department shall prepare the forms necessary for the enforcement of this section and issue rules and regulations as appropriate." Section 204 does not specify the manner of implementation but rather directs the Department of Labor and Industry (Department) to provide the appropriate procedures. The Department adopted the implementing regulation in 34 Pa. Code §123.4. Section 123.4(b) provides for notice to the employee on a specified form twenty days in advance of an offset, including the amount and type of offset and how it was calculated, with supporting documentation, and the amount of any recoupment. Section 123.4(e) provides: "The employee may challenge the offset by filing a petition to review offset with the Department." Thus Claimant's contention is that a unilateral offset and a provision to challenge only through filing a petition to review that is not required to be heard and ruled upon in any set period is analogous to the automatic supersedeas at issue in Baksalary. Because the challenge is to the manner of implementation under a regulation, not to the provisions of the Act, this matter is DAS-R - 5 not governed by the principle stated in Ruszin v. Department of Labor and Industry, Bureau of Workers' Compensation, 675 A.2d 366, 370 (Pa. Cmwlth. 1996), that "an administrative agency has no jurisdiction to determine the constitutional validity of its own enabling legislation." Indeed, the Supreme Court has stated: "[A]gencies have authority to consider the validity of their regulations, ¦ but they must refuse to consider the validity of their organic statutes." Lehman v. Pennsylvania State Police, 576 Pa. 365, 381, 839 A.2d 265, 275 (2003) (citation omitted). Claimant has always sought a ruling from the WCJ, the Board and this Court on his claim that the unilateral pension offset without a required timely hearing denied due process. His original brief to the WCJ noted Section 204(a) of the Act, but it argued that the implementation through 34 Pa. Code §123.4 caused the due process problem. The Defendant's brief to the WCJ in response acknowledged this by stating: "Interestingly, the Claimant does not allege that the Defendant is not entitled to the offset. Claimant only argues that the process by which the credit is taken is inappropriate." Defendant's Response to Claimant's Brief, p. 2; R.R. 92a, 93a. The "difference of opinion" is not over the WCJ's jurisdiction but over the controlling question of whether the unilateral pension offset without a required timely hearing denies due process. Assuming arguendo that the WCJ and the Board could not decide the due process challenge to the method of implementation, such a fact would support grant of permission to appeal and resolution of the question by this Court, rather than remand for a determination on the merits that might be nullified by a judicial determination that the procedure followed before the workers' compensation authorities was fatally defective. Under the majority's decision to revoke the grant of permission to appeal, thereby reinstating the Board's remand order based on lack of DAS-R - 6 authority in the WCJ to hear the due process challenge, it is not clear when or how Claimant would be able to present his challenge. In view of his arguments before this Court and throughout his case, I do not agree with the majority's assertion that "[a]ll parties agree" that the Board's interlocutory order correctly held that the WCJ lacked jurisdiction to decide the constitutional issue. Surely no one can dispute the principle stated in Ruszin that an agency has no jurisdiction to decide the constitutional validity of its enabling legislation. That question clearly is distinct from the question raised by Claimant regarding the constitutionality of regulations promulgated by the Department to implement the enabling legislation. Further, I do not accept that this record is not sufficient to permit the Court to review and to decide the question. There is no dispute that Claimant is receiving a pension or as to the amount of his workers' compensation benefits. The WCJ's Finding of Fact No. 2 stated that it was noted at the hearing that Claimant's benefits were stopped as of August 8, 2003 pursuant to a notice of workers' compensation benefit offset indicating that a weekly offset credit of $385.97 would be deducted beginning August 2, 2003 and would continue until September 3, 2004 and that Claimant would receive reduced benefits of $253.61 thereafter. The offset credit of $385.97 represents Claimant's entire wage loss benefit. These basic operative facts are not disputed. Moreover, the petition to review offset that a claimant may file under 34 Pa. Code §123.4(d) does not include a requirement such as that now found in Section 413(d)(1) of the Act, 77 P.S. §774.3(1), and Section 413(a.1), 77 P.S. §774(1), both as amended by Section 16 of the Act of June 24, 1996, P.L. 350. These sections provide in relevant part that if an employee contests the averments in an insurer's affidavit seeking to modify benefits, the employee may request a special supersedeas DAS-R - 7 hearing before a WCJ, which shall be held within twenty-one days and that an employer's petition to terminate, modify or suspend a notice of compensation payable, a compensation agreement or an award shall automatically act as a request for supersedeas to suspend payment where the employer alleges full recovery and its petition is accompanied by a physician's affidavit. A special supersedeas hearing shall be held before a WCJ within twenty-one days of assignment of the petition at which parties shall have the opportunity to present testimony and medical records, written statements or reports and other relevant materials. The WCJ shall rule on the request within seven days of the hearing. Although what may be at stake, as this case illustrates, is a claimant's loss of the full workers' compensation benefit or a substantial portion for an extended period, the claimant currently is not afforded a hearing at any meaningful time. Because the record in this case is sufficient to allow the Court to address the question raised by Claimant as to whether the procedure implemented pursuant to 34 Pa. Code §123.4 violates Claimants' rights to due process of law, the Court should not evade its duty to decide the question by now deciding that its original grant of permission to Claimant to appeal more than one year ago under 42 Pa. C.S. §702(b) was improvidently granted. DORIS A. SMITH-RIBNER, Judge DAS-R - 8
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