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Second Injury Fund liability back before Supreme Court

For the second time this year, the Missouri Supreme Court is considering the circumstances under which a worker can claim to be permanently totally disabled.

The court heard arguments on Dec. 14 from Michael Lexow, a former aircraft mechanic who sought worker’s compensation benefits from his employer, Boeing Co., after repetitive job activities left him with bilateral carpal tunnel syndrome in his left wrist.

After settling with his employer, Lexow, who is left-handed, claimed that his injury, when combined with numerous other disabilities, left him permanently and totally disabled. He sought recovery from the state’s Second Injury Fund, a part of the workers’ compensation program that covers claims by workers whose preexisting conditions are made worse by an on-the-job injury.

An administrative law judge approved Lexow’s claim, but the Labor and Industrial Relations Commission reversed, finding that Lexow didn’t qualify for compensation due to a 2014 law that tightened the standards for receiving benefits.

The Second Injury Fund is funded by a surcharge on work comp insurance premiums that businesses pay. The legislature capped the surcharge at 3 percent in 2005, causing a shortfall that left the fund nearly insolvent. As of Jan. 1, 2014, lawmakers temporarily increased the surcharge but also barred new claims for permanent partial disability and set limits for claims for permanent total disability, or PTD.

Under the new law, PTD is limited to those who suffered a work-related injury and also previously had suffered “a medically documented preexisting disability equaling a minimum of fifty weeks of permanent partial disability compensation,” along with other criteria.

The labor commission found that Lexow had preexisting disabilities from injuries to his right shoulder, left knee, lower back and neck, all of which met the 50-week standard. However, the commission in a 2-1 decision declined to consider those injuries in total and said Lexow needed to prove that one of them, when paired with his newest injury, had rendered him disabled.

The commission’s majority also refused to consider an earlier diagnosis of carpal tunnel syndrome, which had rendered Lexow partially disabled in his right wrist, holding that the revised workers’ compensation law excludes occupational diseases as qualifying preexisting injuries.

The commission’s ruling occurred before the Supreme Court in April issued Treasurer of the State of Missouri v. Parker, which said workers can claim multiple preexisting injuries so long as they met the statutory requirements. However, the court held that they cannot use the cumulative effects of several relatively minor injuries in order to qualify as disabled.

The Dec. 14 argument was thick with statutory references as the court tried to further clarify the complex statute and determine where occupational disease fits in. The statutory definition of “injury” used in the section that deals with preexisting injuries says that it “shall in no case except as specifically provided in this chapter be construed to include occupational disease in any form.”

Judge W. Brent Powell noted that the phrase “as specifically provided in this chapter” appeared to be important.

“If they meet the standard set out [elsewhere in the chapter], wouldn’t it be an occupational disease that’s compensable?” he asked.

Madalyn Campbell, an assistant attorney general defending the fund, argued that lawmakers had intended to exclude such diseases so as to reduce the fund’s liability.

“The legislature, by using that qualifying language, necessarily intended to exclude occupational diseases,” she said.

Thomas Gregory of Mogab & Hughes Attorneys in St. Louis, who represented Lexow, argued that such an exclusion was “totally illogical.”

“Employers are responsible for occupational diseases. Why shouldn’t the Second Injury Fund be?” he said.

Although Gregory said the court’s guidance on the issue was needed, he also argued that it might not be necessary in this case. Under the Parker ruling, he said, it was clear that all of Lexow’s serious prior injuries could be considered, and the labor commission already had deemed them to be qualifying injuries.

Rather than send the case back for further fact-finding, as the attorney general’s office suggested, he urged the court to simply order the commission to enter an award of permanent total disability against the Second Injury Fund.

“I do not believe the commission has to show their work, like in grade school,” he said.

The case is Lexow v. Boeing Co., SC99199.