A Workers’ Compensation case, Dana Corporation v WCAB (Smuck) handled of Shollenberger Januzzi and Wolfe caused huge waves where the Pennsylvania Supreme Court analyzed the question: “Should there be retroactive effects if a statute is struck down as unconstitutional in a previous decision?”

The implications of the case reach outside of Workers’ Compensation cases; the final decision could likely affect most civil litigation claims in Pennsylvania.

What lead to the Supreme Court decision

The case initially began as a Workers’ Compensation claim where the employee underwent and Impairment Rating Evaluation (IRE), a medical examination requested by the employer. The employee underwent an IRE and was found to have less than a 50% full body impairment under the 6th Edition of the AMA guides.  In Pennsylvania, if a person is found to be less than 50% full body impaired from a work injury, they can be converted from total disability status to partial disability status.

Shortly after the employee’s IRE under the 6th Edition, the Pennsylvania Commonwealth Court issued the Protz v. WCAB (Derry Area School District) (“Protz I”), which held that IREs done under the 6th Edition were unconstitutional. The Protz I decision did not state if evaluations done under prior editions of the AMA Guides, specifically the 4th which was in effect when the IRE provision was enacted, were still valid. The employer subsequently performed another evaluation under the 4th edition of AMA guides. The Workers Compensation Judge granted the modification petition converting the employee to partial disability status under the 4th edition and denied the modification petition under the 6th edition.

Both the employer and the employee appealed the decision. During the pendency of the appeal, Protz I was also appealed to the Pennsylvania Supreme Court (“Protz II”).  In Protz II the Court held that the entire IRE provision of the Workers’ Compensation Act was unconstitutional.  The Protz II holding during the pendency of Dana Corporation v WCAB lead to Dana Corporation v. WCAB being heard by the Pennsylvania Supreme Court to determine if the decision in Protz II should be retroactively applied. And if so, to what extent.

The final ruling

The Pennsylvania Supreme Court decided that the Protz II ruling was retroactive and opted to follow the general rule of limited retroactivity to cases pending on appeal when Protz II was decided. This meant that employers do not have a vested interest in partial credits paid under the unconstitutional statute. In this case, the employer would not receive credits for weeks of partially paid under the prior IRE provision.

The Court emphasized the importance of protecting Pennsylvania’s  injured workers over business interests. The attorneys at Shollenberger, Januzzi, and Wolfe LLP said it is positive news for future challenges to the newest IRE provision which has since been enacted to replace the previous unconstitutional statute. The IRE provision that replaced the prior IRE statute gives employers a credit for past weeks of partial paid under the (unconstitutional) IRE provision. The constitutionality of new statute has not yet been tested.