Special Report: 1st District Court of Appeal Holds That WCAB Must Act on Petition for Reconsideration Within 60 Days

For more than 30 years, the Workers' Compensation Appeals Board (WCAB) relied on Shipley v. WCAB (1992) 7 Cal. App. 4th 1104 to decide petitions for reconsideration, even if it did not act timely on a petition pursuant to former Labor Code § 5909. That statute stated, "A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date of filing." Based on Shipley, the WCAB generally held that if a petition was not considered within the time limit of LC 5909 due to the WCAB's own inadvertent error, it still may decide the merits of the petition, even if the 60-day time period has elapsed.

On Dec. 18, 2023, in Zurich American Insurance Co. v. WCAB (2023) 97 Cal. App. 5th 1213, the 2nd District Court of Appeal issued a decision holding that such practice was improper. Zurich stated that "[T]he language and purpose of section 5909 show a clear legislative intent to terminate the Board's jurisdiction to consider a petition for reconsideration after the 60 days have passed, and thus, decisions on the petition made after that date are void as in excess of the agency's jurisdiction." Zurich interpreted Shipley as creating a limited exception to the deadline in LC 5909 only when (1) the petitioner acted diligently to protect his or her rights; and (2) the WCAB misled the petitioner in a manner that deprived that party of a right to review by the WCAB or the appellate courts.^[1]

On March 27, 2024, however, the WCAB issued a significant panel decision, Scheuing v. Lawrence Livermore National Laboratory (2024) 89 CCC 325, holding that it would continue to rely on Shipley to act on petitions for reconsideration outside of the 60-day period. The WCAB discussed Zurich only in footnote 6 of the decision, stating that "Zurich appears to reflect a split of authority on the application of "Shipley".^[2]

Subsequently, effective July 2, 2024, Assembly Bill 171 (AB 171) amended LC 5909. Subsection (a) states, "A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date a trial judge transmits a case to the appeals board." Subsection (b) requires the trial judge to provide notice to the parties and the WCAB when the judge transmits a case to the WCAB. It also states that a report and recommendation pursuant to LC 5900(b) constitute provision of notice. Finally, subsection (c) directs that the statute remains in effect until July 1, 2026, and as of that date, reverts to its former language.

Recently, in Mayor v. WCAB, the 1st District Court of Appeal agreed with Zurich that under former LC 5909, the WCAB lost jurisdiction to act on a petition for reconsideration after the 60-day period expired. The court explained that the amendment to LC 5909 by AB 171 implicitly confirmed Zurich's interpretation of the former statute, and put to rest the WCAB's concerns about the consequences of that interpretation for the future.

FACTS OF THE CASE

In Mayor, a workers' compensation judge (WCJ) issued an award in favor of the applicant on March 2, 2023. On March 23, 2023, the defendant filed a petition for reconsideration. The defendant wrote to the WCAB, inquiring about the status of its petition 74 days after it was filed.

On Aug. 14, 2023, 144 days after the petition was filed, the WCAB issued an order granting reconsideration, in which it stated that it first received notice of the petition on June 15, 2023. On Jan. 26, 2024, the WCAB issued its decision after reconsideration, and on Feb. 2, 2024, the WCAB rescinded that decision and issued a revised version, which returned the matter to the trial level for further proceedings.

In the meantime, the applicant filed a petition for writ of mandate, asserting that the WCAB lost jurisdiction over the matter 60 days after the defendant filed its petition for reconsideration.

COURT'S DECISION

The 1st District Court of Appeal agreed with Zurich that former LC 5909 was mandatory and that the WCAB exceeded its jurisdiction in purporting to grant the defendant's petition more than 60 days after it was filed. It rejected the WCAB's efforts to minimize and distinguish Zurich. The court explained that Zurich rejected the WCAB's position that Shipley allowed it to extend the former LC 5909 deadline any time it failed to act due to deficiencies in the administrative process, and that Zurich essentially limited Shipley to its facts, which allowed equitable tolling only when the WCAB misled a diligent petitioner into missing the deadline for judicial review.

The court found that AB 171 essentially ratified Zurich's interpretation of the governing statutes. It noted that AB 171 was enacted about six months after Zurich, and the temporal proximity indicated that the Legislature intended to respond to Zurich. It found that the Legislature did not try to clarify that former LC 5909 was not mandatory or that Zurich had misconstrued the intent behind the statute, but instead it changed the trigger for the 60-day deadline to run from the WCJ's transmission of the case file to the WCAB. It found that this was a tacit acquiescence to Zurich's interpretation of former LC 5909's rule as mandatory, because if the WCAB's practice was permissible, there would have been no reason to alter the deadline.

The court then explained that AB 171 addressed the WCAB's concerns about the consequences of Zurich's interpretation for the future. It explained that by making the amendment to LC 5909 temporary until July 1, 2026, the Legislature made a short-term fix to the WCAB's need for resources to meet former LC 5909's deadline. It added, "For future cases, the new trigger for the deadline gives the Board the additional time to act on petitions review that it says it needs to resolve normal human errors or administrative irregularities."

The court rejected the WCAB's contention that the parties had a due process right to review by the WCAB, explaining "... opposing parties need not subordinate their rights to prompt resolution of disputes to accommodate open-ended delays that the Board claims are necessary for it to rule on petitions for reconsideration." Finally, the court rejected the WCAB's contention that Zurich's interpretation was "draconian" or "drastic," because the WCAB had relied on Shipley for more than 30 years to toll the former LC 5909 deadline. It explained that “a long-standing and incorrect procedure remains incorrect.”

In Mayor, the 1st District Court of Appeal rescinded the WCAB's orders granting reconsideration and its subsequent opinions and decisions after reconsideration, and concluded that the original decision on March 2, 2023 was final.

ANALYSIS OF THE DECISION

Generally, the published opinions of the Courts of Appeal are binding on the WCAB and its judges. If there are conflicting appellate decisions, the WCAB can choose among them. Initially, the WCAB followed that practice to continue relying on Shipley to act on petitions for reconsideration after the 60-day period in LC 5909 expired.

But now, both the 1st and 2nd District Courts of Appeal have held that WCAB's long-standing reliance on Shipley to extend the time to act on petitions for reconsideration due to its own administrative irregularities was invalid. Both Zurich and Mayor hold that Shipley applies only when the WCAB misled a diligent petitioner in a manner that deprived that party of the right to review by the appellate courts. Therefore, absent that showing, it's unlikely that the WCAB may act on further petitions filed under former LC 5909 after the 60-day period.

Although this will affect some petitions filed under former LC 5909, more problematic are the WCAB's prior decisions made after the 60-day time frame. Under Zurich and Mayor, the WCAB's decisions after the 60-day limit under former LC 5909 are void. There are three decades of cases in which the WCAB has granted reconsideration pursuant to Shipley beyond the 60-day limit, and in many of them, the WCAB rescinded, altered or amended the original decision after 60 days. Failure to appeal those decisions possibly will render them final, but if the WCAB's decisions after the 60-day period were void for lack of jurisdiction, it's possible that they still might be challenged. This will need to be further clarified by the courts.

Moving forward, for petitions for reconsideration filed on or after July 2, 2024, the 60-day period for the WCAB to act will run from the date a WCJ transmits a case to the WCAB, rather than the date the petition was filed. LC 5909(b) also mandates that the WCJ must provide notice to the parties and the WCAB when transmitting the case. In Mayor, the court stated that the amended statute extends the time to act for "normal human errors or administrative irregularities." So, delays in transmission of a case to the WCAB will extend the time for it to act on a petition.

Nevertheless, some issues still must be resolved by the courts. What if the WCJ serves notice of transmission, but one of the parties does not receive it? Does the mailbox rule in CCR 10625 extend the 60-day period?

For further discussion of the WCAB's actions on a petition for reconsideration, see Section 16.65 Petition for Reconsideration — Workers' Compensation Appeals Board's Action.

1. ↑ See the article published by "Sullivan on Comp," Dec. 20, 2023, WCAB Must Act on Petition for Reconsideration Within 60 Days.
2. ↑ See the article published by "Sullivan on Comp," March 28, 2024, WCAB Issues Significant Panel Decision That It Will Continue to Follow Shipley.