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Developments in the Law

Long v. Sealed Air Corp.:  Can You Appeal a Workers' Comp Order?

In Long v. Sealed Air Corp., 706 S.E.2d 34 (Jan. 2011), the South Carolina Court of Appeals signaled a sea change in how it will handle workers' compensation appeals.  Long's workers' compensation claim was dismissed by the Commission for failure to give timely notice under S.C. Code § 42-15-20.  On appeal, the Circuit Court reversed and remanded the case to the Commission "for futher investigation" and findings as to the merits of Long's claim.  Sealed Air appealed to the Court of Appeals on the basis that the Commission's finding and conclusion that Long failed to give proper notice was supported by substantial evidence and; therefore, should have been affirmed by the Circuit Court.

Instead of addressing the merits of Sealed Air's appeal, the Court of Appeals dismissed the appeal on the basis that the Circuit Court's remand order was not "final."  The Court of Appeals relied on a 2010 South Carolina Supreme Court decision, Charlotte-Mecklenburg Hospital Authority v. SCDHEC, which held that the general statute permitting appeal of intermediate orders (S.C. Code § 14-3-330) does not apply to appeals from the Administrative Law Court.  Instead, appeals from the Administrative Law Court are governed by S.C. Code § 1-23-610, which only permits appeals of "final" ALC decisions. 

According to the Court of Appeals, because S.C. Code § 1-23-380 governs appeals from the Workers' Compensation Commission, S.C. Code § 14-3-330 does not permit intermediate appeals from the Commission.  However, § 1-23-380 itself expressly provides for intermediate appeals, by stating that a "preliminary, procedural, or intermediate agency action or ruling is immediately reviewable if review of the final agency decision would not provide an adequate remedy."  Unfortuntately, the Court of Appeals utterly ignored this plain and unambiguous statutory language in dismissing Sealed Air's appeal.

As a result, if an order does not finally determine every possible issue in a workers' compensation case, it is unlikely that the Court of Appeals will an immediate appeal.  This means that an employer like Sealed Air could be forced to pay medical and compensation benefits before it can appeal an issue such as failure to give notice.  Ultimately, the Court of Appeals or the Supreme Court could agree that Long's claim is barred by § 42-15-20, but it is unlikely that Sealed Air would ever be able to recover the benefits paid pending appeal. 

Obviously, the holding in Long v. Sealed Air Corp. seriously prejudices the rights of South Carolina Employers and Workers' Compensation Carriers.  Sealed Air did not appeal to the Supreme Court, so it will be binding until it is reversed by the South Carolina Supreme Court.  There are several such cases currently pending.

James v. Anne's, Inc.: A Limited Holding with Unintended Consequences.

Many in the legal community were stunned by the unanimous decision issued by the South Carolina Supreme Court on October 25, 2010 in the case of James v. Anne's Inc, 701 S.E.2d 730. However, careful consideration reveals that this case does not fundamentally alter workers' compensation law, or otherwise expand the powers of the South Carolina Workers' Compensation Commission. Instead, the Supreme Court merely reaffirmed the Commission's role as a fact-finder under S.C. Code § 42-3-180 and the Commission's authority to calculate the commuted value of future installments of compensation under § 42-9-301. The Supreme Court was careful to emphasize that S.C. Code § 42-9-10 restricts the future value of most awards to 500 weeks of compensation at the established compensation rate. However, the Supreme Court recognized that some claimants wish to prorate the maximum future award over their statutory lifetime, so as to avoid application of the Social Security Disability offset. In such cases, the Commission is authorized to calculate the commuted value of future installments of the award over the claimant's statutory lifetime.[1]

Consider a 50 year old man with a $500.00 compensation rate who wishes to have his award of 500 weeks paid in a lump sum. The Commission would make a finding of fact that he is entitled to 500 weeks of compensation at the rate of $500.00 per week; however, he is not entitled to a $250,000 lump sum payment. Instead, the accounting mechanism established in S.C. Code § 42-9-301 and S.C. Code Reg. 67-1605 requires that the Commission apply a 5% per annum discount rate to the 500 week stream of benefits and as a matter of law that the lump sum award is $204,147.85. However, if he so requests, the Commission may make a finding of fact that the future value of his total disability award ($250,000) should be allocated over his statutory lifetime: 1,517.36 weeks (29.18 years) at the rate of $164.76 per week. Application of the accounting mechanism established in S.C. Code § 42-9-301 and S.C. Code Reg. 67-1605 to such a finding of fact (i.e., a 5% per annum discount for a period 29.18 years) results in a lump sum award of $136,589.72 as a matter of law. As noted by the Supreme Court, the future value of the award ($250,000.00) remains unchanged; only the Commission's calculation of the lump sum payment changes because of the Commission's finding of fact that the period covered by the award extends over the claimant's statutory lifetime, not just the balance of 500 weeks.

Because the Commission is not at liberty to disregard the plain terms of either S.C. Code §§ 42-9-10 or 42-9-301, a claimant who wishes to prorate his workers' compensation award for a period greater than 500 weeks should understand that the value of his lump sum payment must decrease proportionately with the length of the requested proration period. Not even the Workers' Compensation Commission's "beneficent purpose" can change simple arithmetic or the 5% per annum discount rate and the James v. Anne's, Inc. decision should not be interpreted as permitting the Commission to make its findings of fact inconsistent with its conclusions of law under § 42-17-40. As noted by Justice Beatty, it is "simply a mathematical calculation," and in this case, simple math may result in unintended consequences for claimants wishing to thwart application of federal law.

 


 

[1] According to Justice Beatty, "the proration of compensation over the claimant's lifetime is a reasonable method of accounting for this compensation."