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Should the Ruling in Protz be Applied Retroactively?

The Pennsylvania Supreme Court addressed that question in its decision issued on June 16, 2020 in the case of Dana Holding Corp. v. WCAB (Smuck), No. 44 MAP 2019, 2020 Pa. LEXIS 3289.

David Smuck (Claimant) sustained a work-related back injury in 2000, which rendered him disabled.  In June of 2014, Claimant submitted to an Impairment Rating Evaluation (IRE) and was assigned a whole-body impairment rating of 11 percent based on the Sixth Edition of the AMA Guides, which was then the “most recent edition” of the Guides.  Employer, Dana Holding Corporation, then filed a modification petition seeking to convert Claimant’s disability status from total to partial, thus limiting claimant disability benefits to a period of 500 weeks.

While the petition was pending, the Commonwealth Court issued its decision in Protz v. WCAB (Derry Area Sch. Dist.), 124 A.3d 406 (Pa.Cmwlth. 2015), aff’d in part and rev’d in part, 639 Pa. 645, 161 A.3d 827.  Ultimately, the WCJ credited Employer’s position and entered an order changing the claimant’s disability status to partial effective June 2014.

Claimant appealed to the Board, which stayed the proceedings pending the Supreme Court’s decision in Protz.  Upon issuance of that opinion, the Board reversed the WCJ’s decision inasmuch as the WCJ had relied upon Section 306(a.2) of the Act, which had been found in the Protz decision to be unconstitutional and thus invalid.  Accordingly, Claimant’s total disability status was reinstated as of the date of the disputed IRE.

Employer appealed to the Commonwealth Court, which affirmed, holding that Protz applies at least to all cases in which the underlying IRE was actively being litigated when the Protz decision was issued.

Employer then sought further review by the Supreme Court.  The Court granted discretionary review to consider two questions:

  1. Whether the Commonwealth Court erred in applying the Protz standard to the case on appeal at the time of the Supreme Court’s decision retroactive to the date of the IRE instead of as of the date that the Supreme Court changed the law?
  2. Whether the Commonwealth Court’s failure to grant the employer credit for the three year period between the date of the IRE evaluation and the date of the “Due Course of Law” provisions of the PA Constitution, Article I, Section 11?

After an exhaustive review of both federal and state case law, the Supreme Court applied the general rule of retroactivity and held that the Commonwealth Court did not err in applying the Protz standard “to the case on appeal at the time of this Court’s decision,” retroactive to the date of the IRE. The Court noted that:

Where an appellate decision overrules prior law and announces a new principle, unless the decision specifically declares the ruling to be prospective only, the new rule is to be applied retroactively to cases where the issue in question is properly preserved at all states of adjudication up to and including any direct appeal.

Because the Protz decision deeming the statute to be invalid did not specifically declare the ruling to be prospective only, the Court held that the ruling applied to the case then before it as well as to all others pending on direct appeal where the issue had been raised.

The Supreme Court also addressed Employer’s “parsimonious” treatment of Claimant’s interests and its argument that Claimant would not be prejudiced by a prospective application of Protz.  Employer sought a credit for the time Claimant had received partial disability benefits before Section 306(a.2) was deemed invalid by the decision in Protz.  The Court rejected the argument, stating that Employer sought the credit “precisely so that it could carve that time out from its 500-week obligation should Claimant’s benefits subsequently be converted back to partial.  Such as reduction clearly has serious financial consequences inuring to injured claimants.”  Clearly, the Court deemed the claimant’s interests to be of greater value than the interests of the employer and the purpose of the General Assembly in promulgating the IRE provisions in the first place, i.e., an attempt to reduce the rising costs of the workers’ compensation liability scheme in Pennsylvania.

It should be noted that the Supreme Court’s decision in Dana Holding applies only to cases in which 1) the constitutional validity of the IRE provisions was raised and preserved as an issue, and 2) that were in litigation or on appeal at the time of the Supreme Court’s decision in Protz.