King v. CompPartners, Inc.

Filed 8/23/18

IN THE SUPREME COURT OF CALIFORNIA

KIRK KING et al., )

)

Plaintiffs and Appellants, )

) S232197

v. )

) Ct.App. 4/2 E063527

COMPPARTNERS, INC., et al., )

) Riverside County

Defendants and Respondents. ) Super. Ct. No. RIC 1409797

____________________________________)

By statute, California’s workers’ compensation system provides an injured

employee’s “exclusive” remedy against an employer for compensable work-

related injuries. (Lab. Code, § 3602, subd. (a).) Here we consider the application

of workers’ compensation exclusivity to claims arising from the workers’

compensation utilization review process. Through that process, utilization

reviewers, acting on behalf of employers, determine whether the plan

recommended for the treatment of an employee’s industrial injury is medically

necessary after consulting a schedule of uniform treatment guidelines. If the

utilization reviewer concludes that a recommended treatment is not medically

necessary, he or she may modify or deny the treatment request. (Lab. Code,

§ 4610.)

In this case, a utilization reviewer denied a treating physician’s request to

continue prescribing certain medication for an injured employee. Alleging that the

utilization reviewer caused him additional injuries by denying the request without

1

SEE CONCURRING OPINIONS

authorizing a weaning regimen or warning him of the possible side effects of

abruptly ceasing the medication, the employee filed a lawsuit seeking recovery in

tort. We conclude that the workers’ compensation law provides the exclusive

remedy for the employee’s injuries and thus preempts the employee’s tort claims.

I.

A.

First created more than a century ago, California’s workers’ compensation

system is now governed by the Workers’ Compensation Act (WCA), “a

comprehensive statutory scheme governing compensation given to California

employees for injuries incurred in the course and scope of their employment.”

(Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800,

810 (Vacanti); see Mathews v. Workmen’s Comp. Appeals Bd. (1972) 6 Cal.3d

719, 729−731; Lab. Code, §§ 3200 et seq.) At the core of the WCA is what we

have called the “ ‘ “compensation bargain.” ’ ” (Vacanti, supra, at p. 811.) Under

this bargain, “ ‘the employer assumes liability for industrial personal injury or

death without regard to fault in exchange for limitations on the amount of that

liability.’ ” (Ibid.) The employee, for his or her part, “ ‘is afforded relatively swift

and certain payment of benefits to cure or relieve the effects of industrial injury

without having to prove fault but, in exchange, gives up the wider range of

damages potentially available in tort.’ ” (Ibid.)

Under the WCA, an employer must provide an injured worker with all

medical treatment reasonably required to cure or relieve the effects of his or her

injury. (Lab. Code, § 4600.) When an injured employee suffers an industrial

injury, the employee reports the injury to his or her employer and then seeks

medical care from a treating physician. After examining the worker, “the treating

physician recommends any medical treatment he or she believes is necessary and

2

the employer is given a treatment request to approve or deny.” (State Comp. Ins.

Fund v. Workers’ Comp. Appeals Bd. (2008) 44 Cal.4th 230, 238 (State Fund).)

For many years, if an employer wished to challenge a treating physician’s

recommendation, it had to invoke a “cumbersome, lengthy, and potentially costly”

dispute resolution process involving review by qualified medical evaluators,

litigation before a workers’ compensation judge, and a right of appeal to the

Workers’ Compensation Appeals Board. (State Fund, supra, 44 Cal.4th at p. 238;

see id. at p. 239.) To increase efficiency and reduce costs, the Legislature enacted

several major reforms that took effect in 2004. These reforms included a process

of mandatory utilization review, under which a reviewer assesses a treating

physician’s recommendation according to a schedule that establishes uniform

guidelines for evaluating treatment requests. (Lab. Code, § 4610; see State Fund,

at p. 240; see also Smith v. Workers’ Comp. Appeals Bd. (2009) 46 Cal.4th 272,

279.)1

Under the statute as amended, every employer is required to establish a

utilization review process, “either directly or through its insurer or an entity with

which an employer or insurer contracts for these services.” (Lab. Code, § 4610,

former subd. (b), now subd. (g).) The utilization review process is

“comprehensive,” covering “any and all” treatment requests. (State Fund, supra,

44 Cal.4th at pp. 236, 243.) “If the treatment request is straightforward and

1 Section 4610 was added to the Labor Code effective January 1, 2004.

(Stats. 2003, ch. 639, § 28.) The Legislature later amended the section effective

January 1, 2013. (Stats. 2012, ch. 363, § 43.) This is the version of section 4610

that was in effect at the time of the events at issue in this case.

The Legislature has since made additional amendments to section 4610,

effective January 1, 2017 (Stats. 2016, ch. 868, § 3; Stats. 2016, ch. 885, § 1.5),

and January 1, 2018 (Stats. 2017, ch. 240, § 1). Neither amendment affects our

analysis in this case. Unless otherwise specified, we refer to the version of section

4610 that was in effect in 2013.

3

uncontroversial, the employer can quickly approve the request—utilization review

is completed without any need for additional medical review of the request.” (Id.

at p. 241; see id. at p. 240.) But while an employer can unilaterally approve a

treatment request, only a licensed physician competent to evaluate the “specific

clinical issues” can modify, delay, or deny a treatment request. (Lab. Code,

§ 4610, former subd. (e), now subd. (g)(3)(A).) The central issue for the

utilization reviewer is whether the requested treatment is medically necessary.

(Id., § 4610, subd. (a).) This medical necessity determination is to be made after

consulting the schedule for medical treatment utilization (id., § 4610, former

subds. (c), (f), now subds. (g)(1), (h)), which is presumed to be “correct on the

issue of extent and scope of medical treatment” (id., § 4604.5, subd. (a); see ibid.

[explaining that the presumption can be rebutted]).

Labor Code section 4610 specifies the information on which utilization

reviewers are to rely in making medical necessity determinations (Lab. Code,

§ 4610, former subd. (d)), as well as the timing of the determinations (id., § 4610,

former subd. (g)) and the nature of the explanations that must accompany the

determinations (id., § 4610, former subd. (g)(4)). When, for example, a utilization

reviewer decides to deny the recommendation of a treating physician in the midst

of treatment, that determination must be communicated to the requesting physician

within 24 hours of the decision. (Id., § 4610, former subd. (g)(3)(A), now subd.

(i)(4)(A).) In these so-called concurrent review cases, the statute provides that

“medical care shall not be discontinued until the employee’s physician has been

notified of the decision and a care plan has been agreed upon by the physician that

is appropriate for the medical needs of the employee.” (Id., § 4610, former subd.

(g)(3)(B), now subd. (i)(4)(C).) The decision to deny the request must “include a

clear and concise explanation of the reasons for the employer’s decision, a

description of the criteria or guidelines used, and the clinical reasons for the

4

decisions regarding medical necessity.” (Id., § 4610, former subd. (g)(4), now

subd. (i)(5).)

About a decade after it first instituted mandatory utilization review, the

Legislature enacted a second set of reforms designed to streamline the resolution

of disputes concerning utilization review determinations. (Stats. 2012, ch. 363,

§ 1, pp. 3719−3720.) The Legislature found that the then-existing dispute

resolution system was “costly, time consuming, and [did] not uniformly result in

the provision of treatment that adhere[d] to the highest standards of evidence-

based medicine,” all of which “adversely affect[ed] the health and safety of

workers injured in the course of employment.” (Id., § 1, subd. (d), p. 3719.) To

remedy these ills, the Legislature crafted a system of “independent medical

review,” or “IMR,” for resolving utilization review disputes. (Lab. Code,

§ 4610.5, subd. (d).)

Following this second set of amendments, the IMR process is the exclusive

mechanism for review of a utilization review decision. (Lab. Code, § 4610.5,

subd. (e); see also id., § 4062, subd. (b) [“If the employee objects to a decision

made pursuant to Section 4610 to modify, delay, or deny a request for

authorization of a medical treatment recommendation made by a treating

physician, the objection shall be resolved only in accordance with the independent

medical review process established in Section 4610.5.”].) Independent medical

review “is performed by an independent review organization, which assigns

medical professionals to review pertinent medical records, provider reports, and

other information submitted to the organization or requested from the parties.”

(Stevens v. Workers’ Comp. Appeals Bd. (2015) 241 Cal.App.4th 1074, 1090; see

generally Lab. Code, § 4610.6.) The independent reviewer is tasked with

determining whether the requested treatment is “medically necessary based on the

specific medical needs of the employee and the standards of medical necessity as

5

defined in subdivision (c) of Section 4610.5.” (Id., § 4610.6, subd. (c).) If an

employee disputes an adverse decision on independent medical review, he or she

may appeal that decision to the Workers’ Compensation Appeals Board (id.,

§ 4610.6, subd. (h)); decisions of the Board may in turn be appealed to a Court of

Appeal (id., § 5950). (See Stevens, supra, 241 Cal.App.4th at p. 1091.)

B.

In February 2008, plaintiff Kirk King sustained a back injury while he was

at work.2 King suffered chronic pain as a result of the injury, which in turn caused

him anxiety and depression. In July 2011, a mental health professional prescribed

several psychotropic drugs, including Klonopin, to treat these latter conditions.

Defendant Dr. Naresh Sharma is an anesthesiologist who was employed by

defendant CompPartners, Inc. (CompPartners), a licensed workers’ compensation

utilization review management company. In July 2013, Dr. Sharma conducted a

utilization review of King’s Klonopin prescription. Dr. Sharma determined that

the Klonopin was medically unnecessary and decertified the prescription.

Dr. Sharma’s decertification did not provide for a weaning regimen, nor did

Dr. Sharma warn King of the risks of abruptly ceasing Klonopin. King

immediately stopped taking the medication and suffered a series of four seizures

as a result.

2 Because we are reviewing an order sustaining a general demurrer, we

accept as true all the material allegations of the complaint. (Shoemaker v. Myers

(1990) 52 Cal.3d 1, 7.) Plaintiffs’ briefs include factual assertions that were not

included in the complaint, and so we have not considered them in deciding

whether the demurrer was properly sustained. (United Bank & Trust Co. v.

Fidelity & Deposit Co. (1928) 204 Cal. 460, 461; Harris v. King (1998) 60

Cal.App.4th 1185, 1187.) We have, however, considered the new assertions in

deciding, post, whether plaintiffs should have been granted leave to amend the

complaint. (Connerly v. State of California (2014) 229 Cal.App.4th 457, 460.)

6

In September 2013, King sought a new prescription for Klonopin. A month

later, Dr. Mohammed Ashraf Ali, a psychiatrist employed by CompPartners,

performed a utilization review of the prescription. Dr. Ali, like Dr. Sharma, found

that King’s Klonopin prescription was medically unnecessary. And again, like

Dr. Sharma, Dr. Ali neither authorized a weaning regimen nor warned King of the

risks of abruptly stopping the medication.

In October 2014, King and his wife filed a complaint in superior court

against CompPartners and Dr. Sharma, among others.3 The Kings asserted claims

of negligence, professional negligence, intentional and negligent infliction of

emotional distress, and loss of consortium. Defendants demurred, arguing that the

Kings’ claims were preempted by the WCA. In the alternative, they argued that

the negligence claims failed because Dr. Sharma owed no duty of care to King.

The trial court agreed with both arguments and sustained the demurrer without

leave to amend.

The Court of Appeal affirmed the order sustaining the demurrer but

reversed the denial of leave to amend. The Court of Appeal agreed with

defendants that the Kings’ challenge to Dr. Sharma’s decision to decertify the

Klonopin prescription is subject to the exclusive remedies of the workers’

compensation system. But insofar as the Kings instead challenge Dr. Sharma’s

failure to warn King of the risks of Klonopin withdrawal, the court concluded, the

claim is not preempted because it does not directly challenge Dr. Sharma’s

medical necessity determination. Finally, the Court of Appeal held that

Dr. Sharma owed King a duty of care, though it also held that the scope of the

duty could not be determined on the basis of the facts alleged in the Kings’

complaint.

3 The Kings also sued two other defendants, but only CompPartners and

Dr. Sharma are parties to this appeal.

7

We granted review. “In reviewing an order sustaining a demurrer, we

examine the operative complaint de novo to determine whether it alleges facts

sufficient to state a cause of action under any legal theory.” (T.H. v. Novartis

Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.) If the demurrer was sustained

without leave to amend, we consider whether there is a “reasonable possibility”

that the defect in the complaint could be cured by amendment. (Hendy v. Losse

(1991) 54 Cal.3d 723, 742 (Hendy).) The burden is on plaintiffs to prove that

amendment could cure the defect. (Ibid.)

II.

To give effect to the compensation bargain underlying the system, the

WCA generally limits an employee’s remedies against an employer for work-

related injuries to those remedies provided by the statute itself. Labor Code

section 3600, subdivision (a) provides that workers’ compensation liability “shall,

without regard to negligence, exist against an employer for any injury sustained by

his or her employees arising out of and in the course of the employment . . . in

those cases where the . . . conditions of compensation concur.”4 Subject to certain

enumerated exceptions not relevant here, this liability is “in lieu of any other

liability whatsoever.” (Lab. Code, § 3600, subd. (a).) Labor Code section 3602

underscores the point: “Where the conditions of compensation . . . concur, the

right to recover such compensation is . . . the sole and exclusive remedy of the

employee . . . against the employer . . . .” (Id., § 3602, subd. (a), italics added.)

4 The conditions of compensation relevant to this case are as follows:

“(1) Where, at the time of the injury, both the employer and employee are subject

to the compensation provisions of this division. [¶] (2) Where, at the time of the

injury, the employee is performing service growing out of and incidental to his or

her employment and is acting within the course of his or her employment. [¶]

(3) Where the injury is proximately caused by the employment, either with or

without negligence.” (Lab. Code, § 3600, subd. (a).)

8

The WCA instructs that its provisions are to be “liberally construed by the

courts with the purpose of extending their benefits for the protection of persons

injured in the course of their employment.” (Lab. Code, § 3202.) This rule of

liberal construction applies even though a particular plaintiff might prefer to forgo

a workers’ compensation remedy in favor of a remedy at law: We construe the

Act “ ‘in favor of awarding work[ers’] compensation, not in permitting civil

litigation.’ ” (Arriaga v. County of Alameda (1995) 9 Cal.4th 1055, 1065, italics

omitted.)

In addressing the application of the WCA’s exclusivity provisions in this

case, we confront two main issues: First, are the injuries the Kings allege in this

case the sort of injuries that are covered by the workers’ compensation exclusive

remedy? And second, are the defendants in this case entitled to the protections of

workers’ compensation exclusivity? We address each issue in turn.

A.

It is by now well established that the WCA’s exclusivity provisions

preempt not only those causes of action premised on a compensable workplace

injury, but also those causes of action premised on injuries “ ‘collateral to or

derivative of’ ” such an injury. (Vacanti, supra, 24 Cal.4th at p. 811, quoting

Snyder v. Michael’s Stores, Inc. (1997) 16 Cal.4th 991, 997 (Snyder).) Such

collateral or derivative injuries include injuries stemming from conduct occurring

in the workers’ compensation claims process. In Vacanti, for example, we held

that the exclusivity provisions applied to claims brought by medical providers

against workers’ compensation insurers for the alleged mishandling of lien claims.

Because the medical providers sought to recover compensation for medical

services provided to workers injured in the course of their employment, we

reasoned, their claims fell within the scope of workers’ compensation exclusivity.

And to the extent the acts alleged by the providers constituted a “ ‘normal part of

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the employment relationship’ [citation] or the workers’ compensation claims

process,” the claims were barred. (Id. at p. 820.) “[I]njuries arising out of and in

the course of the workers’ compensation claims process,” we explained, “fall

within the scope of the exclusive remedy provisions because th[e] process is

tethered to a compensable injury.” (Id. at p. 815.)

This conclusion follows from the unique causation principles underlying

Labor Code section 3600. As we recently explained in South Coast Framing, Inc.

v. Workers’ Comp. Appeals Bd. (2015) 61 Cal.4th 291, 297 (South Coast

Framing), section 3600 provides a workers’ compensation remedy for an injury

linked “ ‘ “in some causal fashion” ’ ” to employment. This causation requirement

differs markedly from ordinary tort principles, in that “ ‘ “ ‘[a]ll that is required is

that the employment be one of the contributing causes without which the injury

would not have occurred.’ ” [Citation.]’ ” (Id. at pp. 297−298.) Because of this,

“industrial causation has been shown in an array of scenarios where a work injury

contributes to a subsequent nonindustrial injury.” (Id. at p. 300.) California courts

have held, for example, that “[a]n employee is entitled to compensation if a new or

aggravated injury results from medical or surgical treatment for an industrial

injury.” (Ibid. [citing cases]; see id. at p. 294 [workers’ compensation remedy

available to family of worker who died from the combination of drugs prescribed

following a fall at work].) This is true regardless of “ ‘whether the treatment [was]

provided by a physician selected by the employee or by the employer or the

employer’s compensation carrier.’ ” (Id. at p. 306.) And where the remedy is

available as an element of the compensation bargain it is exclusive of any other

remedy to which the worker might otherwise be entitled from the employer: “The

employer’s compensation obligation is ‘in lieu of any other liability whatsoever to

any person.’ ” (Snyder, supra, 16 Cal.4th at p. 996, quoting Lab. Code, § 3600,

italics omitted.)

10

These established principles lead to a straightforward answer here. The

Kings seek to recover for injuries that arose during the treatment of King’s

industrial injury and in the course of the workers’ compensation claims process.

Because the Kings allege injuries that are derivative of a compensable workplace

injury, their claims fall within the scope of the workers’ compensation bargain and

are therefore compensable within the workers’ compensation system.

The Court of Appeal agreed with this conclusion insofar as the Kings are

proceeding against defendants on a theory that Dr. Sharma made an erroneous

medical necessity determination regarding King’s Klonopin prescription. But the

court concluded that the exclusivity provisions of the WCA do not apply to the

extent the Kings complain of Dr. Sharma’s failure to warn King of the adverse

consequences of abruptly stopping Klonopin. This was error; focusing on

Dr. Sharma’s failure to warn does not alter the analysis. On either theory of

liability, King’s injury arose out of and in the course of utilization review—a

statutorily required part of the workers’ compensation claims process, to which he

would not have been subject had he not suffered a work-related back injury. The

injury is thus compensable under the WCA.

In reaching its contrary conclusion regarding the Kings’ failure-to-warn

theory, the Court of Appeal relied on Vacanti’s observation that “courts have

allowed tort claims in cases where the alleged injury—the aggravation of an

existing workplace injury—did not occur in the course of an employment

relationship. (See, e.g., Weinstein v. St. Mary’s Medical Center (1997) 58

Cal.App.4th 1223, 1235−1236 [allowing a medical malpractice claim against the

employer because the resulting aggravation of the workplace injury did not arise

out of the employment relationship].)” (Vacanti, supra, 24 Cal.4th at p. 814.) The

Court of Appeal read this passage to mean that “if something goes wrong in the

claims process for [a] workplace injury,” then the WCA’s exclusivity provisions

11

apply, but “if a new injury arises or [a] prior workplace injury is aggravated, . . .

the exclusivity provisions do not necessarily apply.” (King v. CompPartners, Inc.

(2016) 243 Cal.App.4th 685, 694.) This is not a fair reading of the passage.

Vacanti did not attempt to draw a distinction between claims that “something

[went] wrong in the claims process,” on the one hand, and claims of a new or

aggravated injury, on the other. Vacanti instead simply noted that cases have held

that the WCA does not preempt claims of new or aggravated injuries arising

outside “the employment relationship.” (Vacanti, supra, at p. 814, italics added.)

Vacanti’s reference to Weinstein v. St. Mary’s Medical Center offers some

insight into what this court had in mind. The plaintiff in Weinstein was a hospital

employee who was injured on the job. She voluntarily sought treatment for her

workplace injury at the hospital where she worked. While on the premises to

receive treatment, she was injured in a slip and fall. (Weinstein v. St. Mary’s

Medical Center, supra, 58 Cal.App.4th at p. 1226 (Weinstein).) The hospital

argued that tort remedies for the slip and fall injury were barred by workers’

compensation exclusivity. The Court of Appeal rejected the argument, invoking

the so-called “dual capacity doctrine” first enunciated by this court in Duprey v.

Shane (1952) 39 Cal.2d 781 (Duprey). That doctrine, as we have later described

it, “posits that an employer may have or assume a relationship with an employee

other than that of employer-employee, and that when an employee seeks damages

for injuries arising out of the secondary relationship the employee’s claim is not

subject to the exclusive remedy provisions of the Workers’ Compensation Act”

(Hendy, supra, 54 Cal.3d at p. 730). The court in Weinstein reasoned that the

plaintiff’s slip and fall injury was entirely independent of her employment

relationship with the hospital; she had freely chosen to receive treatment at the

12

hospital, and her claims invoked the hospital’s duty toward her in its capacity as a

landowner, not as an employer. (Weinstein, at pp. 1235−1236.)5

This case presents no comparable circumstances. Certainly King, like the

plaintiff in Weinstein, seeks recovery for injuries following his initial industrial

injury. But unlike the injuries at issue in Weinstein, King’s injuries occurred

within the scope of the employment relationship: King alleges the injuries

resulted from errors in the utilization review process—a process that King’s

employer, in its capacity as an employer, was required to establish for the review

of the treatment recommended for King’s prior industrial injury. (See Lab. Code,

§ 4610.)

The Court of Appeal at least implicitly recognized the relationship between

King’s alleged injuries and his employment when it concluded that the Kings’

challenge to Dr. Sharma’s medical necessity determination is preempted by the

5 The court in Weinstein acknowledged that the Legislature had amended the

WCA in 1982 to make clear that “[t]he fact that either the employee or the

employer also occupied another or dual capacity prior to, or at the time of, the

employee’s industrial injury shall not permit the employee or his or her

dependents to bring an action at law for damages against the employer.” (Lab.

Code, § 3602, subd. (a).) But the court concluded that the 1982 amendment did

not alter the analysis because the plaintiff was seeking compensation for a slip and

fall injury that occurred after the initial industrial injury and had no connection at

all with any employment-related duties or obligations she might have toward the

hospital, or the hospital toward her. (Weinstein, supra, 58 Cal.App.4th at p. 1237.)

In other words, at the time of the injury in question, the hospital was acting in only

one capacity, and that capacity was one of landowner, not employer.

This court has never had occasion to consider what, if anything, remains of

the Duprey dual capacity doctrine following the 1982 amendment. (See Hendy,

supra, 54 Cal.3d at pp. 735−739 [recognizing that the Legislature restricted the

scope of the dual capacity doctrine when it amended section 3602 in 1982]; id. at

p. 736, fn. 10 [reserving the question whether “the 1982 amendment of section

3602 abolished the dual capacity doctrine insofar as it applied to employer

physicians who provide treatment to their employees for industrial injuries”].)

The question is not raised here and we express no view on it.

13

WCA. But the court distinguished the Kings’ failure-to-warn theory on the

ground that such a warning, if given, would fall outside the scope of the workers’

compensation claims process. That distinction is untenable. The utilization

review provisions of the WCA govern not only the substance of a utilization

review decision, whether based on medical necessity or otherwise, but also the

content of the responses communicating the decision. (See Lab. Code, § 4610,

former subd. (g)(4), now subd. (i)(5) [“Responses regarding decisions to modify,

delay, or deny medical treatment services requested by physicians shall include a

clear and concise explanation of the reasons for the employer’s decision, a

description of the criteria or guidelines used, and the clinical reasons for the

decisions regarding medical necessity.”].) The statute also specifies when, and to

whom, the decision must be conveyed. (Id., § 4610, former subd. (g)(3), now

subd. (i)(4) [decisions “shall be communicated to the requesting physician within

24 hours of the decision”].) Both Dr. Sharma’s decision to decertify Klonopin and

the manner in which Dr. Sharma communicated that decision fall within the scope

of the statutory process set up by King’s employer to review recommendations

concerning the treatment of King’s industrial injury. The harm the Kings allege is

therefore collateral to and derivative of that industrial injury and arose within the

scope of King’s employment for purposes of the workers’ compensation exclusive

remedy. (See South Coast Framing, supra, 61 Cal.4th at pp. 299−300.)

B.

The Kings argue that even if their injuries were collateral to and derivative

of King’s work-related back injury, defendants are not entitled to the protections

of workers’ compensation exclusivity because defendants are not King’s

“employer” for purposes of the WCA’s exclusivity provisions.

While the workers’ compensation remedy bars suit against an “employer”

(Lab. Code, §§ 3600, 3602), the statute expressly preserves the right of employees

14

to sue third parties: “The claim of an employee . . . for compensation does not

affect his or her claim or right of action for all damages proximately resulting from

the injury or death against any person other than the employer” (id., § 3852). The

statute generally defines the term “employer” to mean, as relevant here, any

“person including any public service corporation, which has any natural person in

service” (id., § 3300, subd. (c); see also id., § 3351 [defining “employee” as

“every person in the service of an employer”])—a definition that would appear to

exclude CompPartners and Dr. Sharma, neither of whom can be said to have King

“in [] service.”

But as the Kings acknowledge, it has long been held that workers’

compensation exclusivity preempts tort claims against certain other persons and

entities as well: insurers, as “the ‘alter ego’ of the employer” (see Unruh v. Truck

Insurance Exchange (1972) 7 Cal.3d 616, 625 (Unruh)) and independent claims

administrators and adjusters hired by self-insured employers to handle workers’

compensation claims (Marsh & McLennan, Inc. v. Superior Court (1989) 49

Cal.3d 1, 4 (Marsh)). The question is whether the WCA, properly interpreted, also

preempts tort claims against utilization reviewers hired by employers to carry out

their statutory claims processing functions. Viewing the question against the

backdrop of our precedents, we conclude the answer is yes.

In Unruh, an injured employee sued her employer’s insurer and others in

tort, alleging that they negligently and intentionally caused her physical and

psychological injury while investigating her workers’ compensation claim.

(Unruh, supra, 7 Cal.3d at pp. 620−621.) We held that the WCA barred the

employee from bringing her negligence claim against the insurer.6 (Id. at p. 624.)

6 We held under a narrow exception, not relevant here, that the employees’

intentional tort claims against the insurer could proceed. (Unruh, supra, 7 Cal.3d

at p. 630.) We discuss this exception below. (See part II.C., post.)

15

Although the statute’s general definition of employer does not include insurers, a

special provision defining “employer” for purposes of the WCA’s subrogation

provisions does expressly include insurers. (Ibid., citing Lab. Code, § 3850.) We

concluded that this special definition applied to the provision authorizing suits

against any “ ‘person other than the employer.’ ” (Unruh, at p. 625, quoting Lab.

Code, § 3852.) Therefore, we held, when an insurer “act[s] within its proper role

in the compensation scheme” (Unruh, at p. 627), it “retain[s] immunity from

lawsuit as the ‘alter ego’ of the employer” (id. at p. 625).

In Marsh, an injured employee’s surviving spouse sued the employer’s

independent claims administrator in tort for wrongly stopping the payment of the

death benefits to which she was entitled. The plaintiff in that case argued that she

was entitled to maintain the suit because the independent claims administrator was

neither an employer, nor an insurer as in Unruh, and therefore was not entitled to

the protections of workers’ compensation exclusivity. We rejected the argument.

The exclusive remedy doctrine, we explained, derives its force from more than the

special statutory definition of “employer” on which we focused in Unruh. The

exclusivity doctrine also derives from other provisions of the WCA: namely,

Labor Code section 5300, which establishes the exclusive jurisdiction of the

Workers’ Compensation Appeals Board over disputes concerning an employee’s

right to compensation or the liability of an employer, and Labor Code section

5814, which specifies the penalty for unreasonable delay or refusal of

compensation. Taken together, we concluded, these provisions “imply that the

workers’ compensation system encompasses all disputes over coverage and

payment, whether they result from actions taken by the employer, by the

employer’s insurance carrier or, . . . by an independent claims administrator hired

by the employer to handle the worker’s claim.” (Marsh, supra, 49 Cal.3d at p. 8.)

By way of explanation, we noted that independent claims administrators perform a

16

statutorily recognized function in the workers’ compensation scheme. (Id. at p. 9;

see ibid. [“Administrators must now obtain certification from the Director of

Industrial Relations [citation] and are subject to fines or revocation of their

certificates at any time for good cause [citation]. [Citation.] They must also file

annual reports with the director. [Citation.]”].) They perform this function on

behalf of employers who “lack[] the expertise to themselves handle the workers’

compensation claims of their employees” (id. at p. 8), and they are likely to bear

ultimate responsibility for any penalty owed because of their misconduct (ibid.).

We therefore concluded that an independent claims administrator stands in the

shoes of the employer for the purpose of the claims administration process, and

thus is entitled to the same protection from tort claims based on an injury

compensable within the workers’ compensation system. Concluding otherwise,

we said, “would vitiate the very purpose of the exclusive remedy provisions of the

Act.” (Ibid., fn. omitted.)

Similar considerations apply in the context of disputes regarding utilization

review. The WCA requires employers to engage the services of utilization

reviewers and regulates utilization review activities in considerable detail. (See

Lab. Code, § 4610, former subd. (b), now subd. (g).) The statute identifies the

exclusive means by which an employee may dispute a utilization review decision:

namely, independent medical review. (Lab. Code, § 4610.5, subd. (e) [“A

utilization review decision may be reviewed or appealed only by independent

medical review pursuant to this section.”]; see also id., § 4062, subd. (b) [“If the

employee objects to a decision made pursuant to Section 4610 to modify, delay, or

deny a request for authorization of a medical treatment recommendation made by

a treating physician, the objection shall be resolved only in accordance with the

independent medical review process established in Section 4610.5” (italics

added).].) And the statute prescribes administrative penalties against any

17

employer, insurer, or other entity that fails to meet any of the pertinent statutory

requirements. (Id., § 4610, former subd. (i), now subd. (p).)7

Perhaps most importantly, in performing their statutory functions,

utilization reviewers, much like independent claims administrators, effectively

stand in the shoes of employers: they perform utilization review on behalf of

employers, to discharge the employers’ own responsibilities to their employees.

Indeed, as the statute acknowledges, the utilization review function can be

performed by the employer itself, as well as by the insurer or by an independent

entity with which the employer or insurer contracts. (Lab. Code, § 4610, former

subd. (b), now subd. (g).) The statute contains no suggestion that claims arising

from the utilization review process should be treated differently depending on

whether the employer conducts the review in-house or instead contracts with an

independent utilization review organization. To the contrary, Labor Code section

4610.5—which sets out the procedures for resolving “[a]ny dispute over a

utilization review decision” (id., § 4610.5, subd. (a))—expressly defines the term

“employer” for that purpose to include the “employer, the insurer of an insured

employer, a claims administrator, or a utilization review organization, or other

entity acting on behalf of any of them.” (Id., § 4610.5, subd. (c)(4), italics added.)

This special definitional provision tends to reinforce the conclusion that the

Legislature regards utilization review organizations, like claims administrators, as

acting on behalf of the employers that contracted for their services.

We presume that the Legislature was aware of our decision in Marsh when

it crafted the utilization review provisions in sections 4610 and 4610.5. (Williams

7 Recent amendments to the act, effective January 1, 2018, call for additional

regulation of utilization review. Section 4610, for example, now contains detailed

requirements for the accreditation of utilization review processes performed by

physicians. (Lab. Code, § 4610, subd. (g)(4).)

18

v. Industrial Acc. Com. (1966) 64 Cal.2d 618, 620.) And in this case, much as in

Marsh, those provisions, viewed in the broader context and operation of the WCA,

evince an intent “that the workers’ compensation system encompass[] all disputes”

concerning utilization review, “whether they result from actions taken by the

employer, by the employer’s insurance carrier or” by a utilization review

organization hired to handle the review on the employer’s behalf. (Marsh, supra,

49 Cal.3d at p. 8.) As a general matter, a contrary conclusion would also

undermine the Legislature’s apparent purpose in establishing the independent

medical review process as the exclusive mechanism for review of the utilization

review decisions of an employer, including a utilization review organization acting

on the employer’s behalf. (Lab. Code, § 4610.5, subd. (c)(4).) Thus, following

the reasoning of Marsh, we hold that the exclusive remedy for the Kings’ injuries

lies within the workers’ compensation system.

C.

The Kings and their amici raise policy concerns about this conclusion.

Utilization review has a significant impact on the medical care of injured workers.

It follows, they argue, that utilization reviewers should be held accountable for

their mistakes in the same way and to the same extent as treating physicians, who

may be sued for their malpractice. (Duprey, supra, 39 Cal.2d at p. 792.)

The statute’s treatment of utilization reviewers is, however, consistent with

the basic tradeoff that underlies the workers’ compensation system as a whole:

The employee is afforded swift and certain payments for medical treatment

without having to prove fault, but, in exchange, gives up his right to sue in tort for

those injuries that result from risks encompassed by the employment relationship.

(See Fermino v. Fedco, Inc. (1994) 7 Cal.4th 701, 708; South Coast Framing,

supra, 61 Cal.4th at pp. 299−300.) And the treatment of utilization reviewers is

also consistent with the Legislature’s apparent aim in crafting the WCA’s

19

utilization review provisions. Those provisions task utilization reviewers,

operating on behalf of employers, with making judgments on a limited set of

documents pursuant to defined criteria and subject to further review only through

statutorily specified procedures. (See Simmons v. State Dept. of Mental Health

(2005) 70 Cal.Comp.Cases 866, 874 [noting that a utilization reviewer, unlike a

treating physician, “does not physically examine the applicant, does not obtain a

full history of the injury or a full medical history, and might not review all

pertinent medical records”].) To permit plaintiffs to bring tort suits against

utilization reviewers, in the same manner as they might bring tort suits against

treating physicians, would subject utilization reviewers to a second—and perhaps

competing—set of obligations rooted in tort rather than statute. That result does

not sit easily with the Legislature’s overarching purpose of replacing a dispute

resolution process that was “ ‘cumbersome, lengthy, and potentially costly’ ”

(State Fund, supra, 44 Cal.4th at p. 245 (conc. opn. of Kennard, J.)) with one that

instead “balances the dual interests of speed and accuracy” (id. at p. 241 (maj.

opn.)).

The detailed scheme the Legislature enacted does contain several

safeguards to protect employees from the sort of harm the Kings have alleged. As

previously noted, decisions to modify or deny a treatment request must be

performed by licensed physicians, who must make medical necessity

determinations in keeping with a uniform schedule of medical treatment

guidelines.8 (Lab. Code, § 4610, former subds. (c), (e), (f), now subds. (g)(1),

(g)(3)(A), (h).) As particularly relevant here, the statute provides that “medical

8 The uniform treatment schedule incorporates “evidence-based, peer-

reviewed, nationally recognized standards of care recommended by [the

Commission on Health and Safety and Workers’ Compensation].” (Lab. Code,

§ 5307.27, subd. (a).)

20

care shall not be discontinued until the employee’s physician has been notified of

the decision and a care plan has been agreed upon by the physician that is

appropriate for the medical needs of the employee.” (Lab. Code, § 4610, former

subd. (g)(3)(B), now (i)(4)(C).) To the extent that a physician or a utilization

review organization fails to abide by a statutorily required part of the utilization

review process, the employer, insurer, or utilization review organization may be

subject to administrative penalties. (Lab. Code, § 4610, former subd. (i), now

subd. (p).) A physician who makes unsound professional judgments in this

capacity is subject to professional discipline, which may include the loss of his or

her license. (See Bus. & Prof. Code, §§ 2221, 2234.) And, of course, employers

are ultimately responsible for paying benefits to workers who suffer injuries as a

result of the utilization review process.

Moreover, as we have previously held, workers’ compensation exclusivity

does not bar tort remedies resulting from acts that “fall outside the risks

encompassed within the compensation bargain.” (Vacanti, supra, 24 Cal.4th at

p. 812.) The Kings have not invoked that exception here, and it would not apply

in any event; the exception applies when the conduct is “so extreme and

outrageous that” the defendant “in effect stepped out of its role” as contemplated

by the workers’ compensation scheme. (Marsh, supra, 49 Cal.3d at p. 6; see

Vacanti, supra, 24 Cal.4th at pp. 822−823.) Where, by contrast, “the acts are ‘a

“normal” part of the employment relationship’ [citation], or workers’

compensation claims process [citation], or where the motive behind these acts

does not violate a ‘fundamental policy of this state’ [citation], then the cause of

action is barred.” (Vacanti, supra, 24 Cal.4th at p. 812.) Here, there is no

question that Dr. Sharma’s utilization review decision, the content of the decision,

and his manner of communicating that decision fall within the scope of the

statutory utilization review process. (See Lab. Code, § 4610.) The Kings have

21

alleged that Dr. Sharma was wrong to decertify Klonopin as he did, but an

allegation of mistake alone is not sufficient to exempt a cause of action from

preemption. (Cf. Vacanti, supra, 24 Cal.4th at p. 821 [“Because denying or

objecting to claims for benefits is also a normal part of the claims process,

misconduct stemming from the delay or ‘discontinuance of payments . . . is

properly addressed by the [Workers’ Compensation Appeals Board].’ ”].) In other

cases, however, a plaintiff may well argue that a utilization reviewer’s conduct

exceeds the bounds of its role and that workers’ compensation exclusivity

therefore should not apply.

It is undoubtedly true that the availability of additional remedies would

increase utilization reviewers’ incentives to perform their tasks with appropriate

competence and care. But as we read the statute the Legislature enacted, the

workers’ compensation system provides the exclusive remedy for otherwise

compensable injuries stemming from alleged mistakes in the utilization review

process. Here the Kings’ tort claims concerning Dr. Sharma’s decertification of

King’s prescription are collateral to and derivative of a compensable injury and

defendants performed a statutorily recognized utilization review function on

behalf of King’s employer. Because the acts alleged do not suggest that

defendants stepped outside of the utilization review role contemplated by statute,

the Kings’ claims are preempted.9

The Kings have not shown that they could amend their complaint in a

manner that would alter this conclusion. In their briefing, they do raise some new

factual assertions about Dr. Sharma’s erroneous handling of the treatment request.

9 This conclusion applies to the Kings’ claims of negligence, as well as the

claim of intentional infliction of emotional distress (see Cole v. Fair Oaks Fire

Protection Dist. (1987) 43 Cal.3d 148, 151) and the claim of loss of consortium

(see Snyder, supra, 16 Cal.4th at p. 997).

22

Specifically, they assert that Dr. Sharma signed a draft decision that had been

prepared by a nurse without reviewing King’s medical records or contacting his

prescribing doctor. They also assert that Dr. Sharma and CompPartners

erroneously sent Dr. Sharma’s decertification decision to King’s general physician

instead of King’s prescribing physician. But neither of these asserted errors in the

utilization review process falls outside the risks contemplated by the statutory

scheme that the Legislature has enacted. Such allegations, if formally pleaded,

would not affect our conclusion that the exclusive remedy for the Kings’ alleged

injuries lies in the workers’ compensation system.

III.

We affirm the Court of Appeal’s judgment insofar as it affirmed the trial

court’s sustaining of the demurrer, but reverse its judgment insofar as it permitted

the Kings to amend their complaint to bolster their claim that defendants are liable

in tort for failure to warn. We remand the case to the Court of Appeal for further

proceedings consistent with this opinion.

KRUGER, J.

WE CONCUR:

CANTIL-SAKAUYE, C. J.

CHIN, J.

CORRIGAN, J.

LIU, J.

CUÉLLAR, J.

GROVER, J.*

* Associate Justice of the Court of Appeal, Sixth Appellate District, assigned

by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

23

CONCURRING OPINION BY LIU, J.

Today we hold that Kirk and Sara King’s tort claims are preempted by

California’s workers’ compensation system. As enacted by the Legislature and as

interpreted by our court, this system provides the exclusive remedy not only for

workplace injuries but also for injuries “ ‘ “collateral to or derivative of” ’ ”

workplace injuries. (Maj. opn., ante, at p. 9, quoting Charles J. Vacanti, M.D.,

Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 811.) Because “[t]he Kings

seek to recover for injuries that arose during the treatment of [Kirk] King’s

industrial injury and in the course of the workers’ compensation claims

process[,] . . . their claims fall within the scope of . . . the workers’ compensation

system.” (Maj. opn., ante, at p. 11; see Vacanti, at p. 815.) This is true even

though the Kings are seeking damages against a third-party utilization review

organization and its employees: The statutory provisions governing utilization

review, when “viewed in the broader context and operation of the [Workers’

Compensation Act], evince an intent ‘that the workers’ compensation system

encompass[] all disputes’ concerning utilization review, ‘whether they result from

actions taken by the employer, by the employer’s insurance carrier or’ by a

utilization review organization hired to handle the review on the employer’s

behalf.” (Maj. opn., ante, at p. 19, quoting Marsh & McLennan, Inc. v. Superior

Court (1989) 49 Cal.3d 1, 8.)

1

But the undisputed facts in this case suggest that the workers’

compensation system, and the utilization review process in particular, may not be

working as the Legislature intended. As today’s opinion notes, “[t]he detailed

scheme the Legislature enacted . . . contain[s] several safeguards to protect

employees from the sort of harm the Kings have alleged.” (Maj. opn., ante, at

p. 20.) For example, “decisions to modify or deny a treatment request must be

performed by licensed physicians, who must make medical necessity

determinations in keeping with a uniform schedule of medical treatment

guidelines. [Citations.] As particularly relevant here, . . . ‘medical care shall not

be discontinued until the employee’s physician has been notified of the decision

and a care plan has been agreed upon by the physician that is appropriate for the

medical needs of the employee.’ [Citation.] To the extent that . . . a utilization

review organization fails to abide by a statutorily required part of the utilization

review process, the . . . organization may be subject to administrative penalties.

[Citation.] A physician who makes unsound professional judgments in this

capacity is subject to professional discipline, which may include the loss of his or

her license. [Citations.] And . . . employers are ultimately responsible for paying

[compensatory] benefits to workers who suffer injuries as a result of the utilization

review process.” (Id. at pp. 20–21, fn. omitted.)

The record in this case does not indicate whether defendants followed the

relevant statutory and regulatory requirements in discontinuing Kirk King’s

prescription for Klonopin. But the seizures King suffered as a result of his abrupt

withdrawal from the drug provide grounds for skepticism that “a care

plan . . . appropriate for the medical needs of the employee” was established

before his prescription was discontinued. (Lab. Code, § 4610, former subd.

(g)(3)(B), now subd. (i)(4)(c).) And even if defendants fully complied with the

relevant requirements, it is questionable whether those requirements are enough to

2

prevent similar injuries from occurring in the future. The “compensation bargain”

that underlies the workers’ compensation system may allow for some “mistakes in

the utilization review process.” (Maj. opn., ante, at pp. 8, 22.) But the balance

that bargain strikes between employers’ interests and workers’ interests presumes

that utilization review — which is conducted either by the worker’s employer or

by an entity “stand[ing] in the shoes of [the] employer[]” (id. at p. 18) — will be

performed “with appropriate competence and care” (id. at p. 22). The limited

record here raises doubts as to whether King’s utilization review was handled

properly. The Legislature may wish to examine whether the existing safeguards

provide sufficient incentives for competent and careful utilization review.

LIU, J.

I CONCUR:

CUÉLLAR, J.

3

CONCURRING OPINION BY CUÉLLAR, J.

Employees protected by the Workers’ Compensation Act (WCA; Lab.

Code, § 3201 et seq.) sometimes allege that their harm arises not only from a

work-related injury, but from the “utilization review process” affecting their

access to medical treatment for that injury (id., § 4610). What today’s majority

opinion holds is that when these workers seek a remedy for such harms, they must

find it exclusively in the WCA. I understand why the majority opinion reaches

this conclusion, particularly in light of our decisions in Unruh v. Truck Insurance

Exchange (1972) 7 Cal.3d 616 (Unruh) and Marsh & McLennan, Inc. v. Superior

Court (1989) 49 Cal.3d 1 (Marsh). I write separately to emphasize the importance

of the common law remedies that ordinarily protect the public, and why courts

must continue to proceed with caution when considering –– as in this case ––

whether a statute abrogates tort causes of action that ordinarily serve to incentivize

good behavior, compensate for injuries, and right moral wrongs.

The WCA is a “comprehensive statutory scheme” governing the

compensation employers must pay employees for injuries suffered in the course

and scope of their employment. (Charles J. Vacanti, M.D., Inc. v. State Comp.

Ins. Fund (2001) 24 Cal.4th 800, 810.) At the heart of that scheme is a trade-off:

an employer pays employees less than the full measure of tort compensation for

the work-related harm, but the payment is certain and provided without regard to

fault. (Ibid.) This trade-off governs the relationship between employers and

1

employees who sustain a work-related injury, but keeps tort law relevant to third

parties who might exacerbate such an injury. (See Lab. Code, § 3852 [“The claim

of an employee . . . for compensation does not affect his or her claim or right of

action for all damages proximately resulting from the injury or death against any

person other than the employer”].) So even as the WCA mediates the relationship

of employers and employees, it explicitly carves out room for the continued

viability of tort claims — and the application of common law principles — for

harms involving third parties.

If it is true that this carve-out could in principle conceivably encompass the

independent officials and organizations involved in utilization review, it is also

true that we have previously held this third-party “exception” not to encompass

insurers (see Unruh, supra, 7 Cal.3d at pp. 623-627) or independent claims

administrators (see Marsh, supra, 49 Cal.3d at pp. 4-10). We have so held on the

basis of explicit, and sometimes implicit, indications of the Legislature’s purpose

in the WCA. (See Lab. Code, §§ 3850 [defining employer to include insurers],

5300, subd. (a) [indicating that the Workers’ Compensation Appeals Board is the

exclusive forum for the “recovery of compensation, or concerning any right or

liability arising out of or incidental thereto”].) The majority today extends the

reasoning in these cases to cover independent utilization reviewers, when an

employee’s injuries arise from an incorrect medical necessity decision or the

failure to warn a patient about the consequences of following such a decision.

(Maj. opn., ante, at pp. 17-18.)

Yet this result may be far from obvious –– not only because at least some

of the statutory scheme likely could be reconciled with a different outcome, but

also because of the presumption we normally apply against the implied repeal of

the common law. Not surprisingly, the common law undergirds our jurisprudence.

(See, e.g., Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 818-821 (Yellow Cab)

2

[discussing the codification of the common law principle of contributory

negligence in Civ. Code, § 1714].) That our society’s long history with the

common law showcases not only its virtues but its limitations is no reason to

ignore its distinctive attributes. In different settings, the common law leverages

societal experiences to shape incentives, and to develop concepts and categories of

obligation, that offer lawyers and the public a framework for understanding the

duties we owe each other. (See, e.g., Hill v. National Collegiate Athletic Assn.

(1994) 7 Cal.4th 1, 25, quoting Post, The Social Foundations of Privacy (1989) 77

Cal. L.Rev. 957, 1008 [describing how the common law right to privacy evolved

out of a “ ‘normative set of social practices that constitute a way of life’ ” and

“psychological foundations emanating from personal needs to establish and

maintain identity and self-esteem by controlling self-disclosure”]; Warren &

Brandeis, The Right to Privacy (1890) 4 Harv. L.Rev. 193, 193 [“Political, social,

and economic changes entail the recognition of new rights, and the common law,

in its eternal youth, grows to meet the demands of society”].) As society and our

institutions change, so does the common law. (See Yellow Cab, supra, 13 Cal.3d

at pp. 821-823 [finding contributory negligence to have evolved to comparative

negligence through a common law process].)

The Legislature’s power to curb the scope of common law causes of action

is not only beyond question — it’s part of the process that adapts the fabric of the

common law to a changing world. But we consider a restriction on the public’s

access to longstanding common law protections sufficiently fraught to expect a

clear legislative statement attesting that such change occurred, and rightly so. (See

McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 249 [“we construe

statutory enactments as consonant with existing common law and reconcile the

two bodies of law”]; People v. Ah Sam (1871) 41 Cal. 645, 653 [discussing how

statutes are sometimes “intended to declare what the common law is, for the

3

purpose, merely, of making that certain which before was doubtful”]; Brown, A

Search for Clarity and Consistency in Judicial Process: The Maryland Court of

Appeals Decides Whether to Change Common-Law Rules (2003) 62 Md. L.Rev.

599, 603-604 [“requests to change the common law often produce acrimony.

Someone is asserting that present conditions so differ from the past that an old,

trusted rule must be discarded”].) So we apply a presumption against implied

repeal of common law causes of action. (California Assn. of Health Facilities v.

Department of Health Services (1997) 16 Cal.4th 284, 299.) Unless a statute

“clearly and unequivocally” demonstrates a purpose different from a rule obtained

from the common law (Yellow Cab, at p. 815), we make every attempt to find a

rational means of harmonizing any conflicts between the two bodies of law (see

McMillin, at p. 249 [requiring harmonization unless “ ‘the language or evident

purpose of the statute’ ” requires the repeal of the common law rule]; cf. Fuentes

v. Workers' Comp. Appeals Bd. (1976) 16 Cal.3d 1, 7). The common law is

neither substantively perfect nor perfectly efficient. Yet it makes sense to

recognize its foundational status in our system, and to take seriously the doctrines

and presumptions that allow us to make the most of what it has to offer.

The question here is why this presumption does not apply to independent

utilization reviewers and the harms they potentially impose on employees like the

plaintiff in this case. One answer may be that the presumption we apply against

repeal of the common law can be easily rebutted in our analysis of the workers’

compensation law — an area where the Legislature has explicitly eliminated the

right to bring a tort suit against employers. (See Lab. Code, § 3600, subd. (a).)

Given this explicit repudiation of tort law in the WCA, the question changes from

whether the common law has been abrogated — it has — to the boundary lines of

where it’s been eliminated. The dividing line is many times decided on whether

we consider a party an “employer” or an alter-ego thereof. This question must be

4

evaluated in the context of the workers’ compensation scheme as a whole through

explicit or implicit legislative indications of purpose. Although the presumption

against implied repeals may still exist to rebuff undue expansions of who is an

“employer,” the weight of the WCA’s explicit repudiation of tort law in

combination with other indicators of legislative purpose may serve to rebut the

presumption in cases like this one.

Remedies can play a particularly important role as an indicator of

legislative purpose when courts seek to demarcate the precise distinction between

who counts as employers and non-employers under the WCA scheme. A maxim

of the common law is that every right has a remedy. (See Marbury v. Madison

(1803) 5 U.S. 137, 163.) That maxim imbues our understanding of statutory rights

as well. (Collins v. O’Laverty (1902) 136 Cal. 31, 35 [“To deny the remedy would

be to deny the right . . . , and thus to nullify the statute”].) Without an explicit

legislative directive, it would run against this maxim, and the presumption against

the implied repeal of the common law, to eliminate any remedy for what would

normally be redressed through a tort cause of action. We, of course, do not reach

the question whether a tort duty of care runs between the independent utilization

reviewer and the employee. But that is in no small part because the Legislature

implemented a number of safeguards against, and administrative penalties for,

what occurred here, as well as a remedy in the form of additional workers’

compensation for the injuries incurred. As the majority points out, when the

arcana of utilization review results in denial, the process must be performed by

licensed physicians (Lab. Code, § 4610, former subd. (e), now subd. (g)(3)(A)),

those decisions must comply with uniform medical treatment guidelines (id.,

§ 4610, former subds. (c) & (f), now subds. (g)(1) & (h)), and an adverse decision

cannot result in the cessation of care until the employee’s physician receives

notification of the decision and agrees to a care plan for the employee (id., § 4610,

5

former subd. (g)(3)(B), now subd. (i)(4)(C)). (See maj. opn., ante, at pp. 20-21.)

And if a utilization reviewer “fail[s] to meet any . . . requirement of this section,”

the Division of Workers’ Compensation may “assess, by order, administrative

penalties for each failure” on the utilization review organization. (Lab. Code,

§ 4610, former subd. (i), now subd. (p).) Moreover, the physician utilization

reviewer may be subject to professional discipline that could result in the loss of

his or her license or a public reprimand. (See Bus. & Profs. Code, § 2221,

2221.05.) And of course, as the majority opinion holds, the employee has a

remedy in the form of workers’ compensation benefits. (See maj. opn., ante, at p.

14 [finding harm arising from the utilization reviewer’s decision to fall “within the

scope of King’s employment for purposes of the workers’ compensation exclusive

remedy”]; see also id. at p. 21.)

Our understanding of the utilization review statute’s purpose may have

differed if the Legislature had failed to provide any such safeguards, incentives, or

remedies. Even now, those safeguards and remedies may not be set at optimal

levels, and the Legislature may find it makes sense to change them. (See conc.

opn. of Liu, J., ante, at pp. 2-3.) Nonetheless, they are sufficient to support our

conclusion –– in light of our decisions in Marsh and Unruh, and the WCA’s

scheme as a whole –– that any presumption against the implied repeal of common

law tort remedies otherwise available to protect people from negligent or botched

utilization review procedures is rebutted in this case.

CUÉLLAR, J.

I CONCUR:

GROVER, J.*

_____________________

* Associate Justice of the Court of Appeal, Sixth Appellate District, assigned

by Chief Justice pursuant to article VI, section 6 of the California Constitution.

6

See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion King v. CompPartners, Inc.

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding

Review Granted XXX 243 Cal.App.4th 685

Rehearing Granted

__________________________________________________________________________________

Opinion No. S232197

Date Filed: August 23, 2018

__________________________________________________________________________________

Court: Superior

County: Riverside

Judge: Sharon J. Waters

__________________________________________________________________________________

Counsel:

Law Offices of Patricia A. Law, Patricia A. Law, Jonathan A. Falcioni; Arias & Lockwood and Christopher

D. Lockwood for Plaintiffs and Appellants.

Smith & Baltaxe and Bernhard Baltaxe for California Applicants’ Attorneys Association as Amicus Curiae

on behalf of Plaintiffs and Appellants.

Francisco J. Silva, Long X. Do, Lisa Matsubara and Stacey B. Wittorff for California Medical Association

as Amicus Curiae on behalf of Plaintiffs and Appellants.

Charles Edward Clark for California Society of Industrial Medicine and Surgery, Inc., as Amicus Curiae on

behalf of Plaintiffs and Appellants.

Joshua S. Meltzer; Munger, Tolles & Olson, Fred A. Rowley, Jr., Jeffrey Y. Wu; Murchison & Cumming,

William D. Naeve, Ellen M. Tipping, Terry L. Kesinger and David A. Winkle for Defendants and

Respondents.

Law Offices of Alweiss & McMurtry and Michael A. Marks for California Workers’ Compensation

Institute and American Insurance Association as Amici Curiae on behalf of Defendants and Respondents.

Crowell & Moring, David D. Johnson; Lewis Brisbois Bisgaard & Smith and Raul L. Martinez for National

Association of Independent Review Organizations, Coventry Health Care Workers Compensation, Inc., and

ExamWorks, Inc., as Amici Curiae on behalf of Defendants and Respondents.

Mary C. Wickham, County Counsel (Los Angeles), Ralph L. Rosato, Assistant County Counsel, Derrick

M. Au, Principal Deputy County Counsel, Susan T. Collins and Emily A Grospe, Deputy County Counsel,

for County of Los Angeles as Amicus Curiae on behalf of Defendants and Respondents.

Page 2 – S231197 – counsel continued

Counsel:

Finnegan, Marks, Theofel & Desmond and Randall G. Poppy for California Chamber of Commerce, the

National Council of Self-Insurers, Property Casualty Insurers Association of America doing business in

California as Association of California Insurance Companies (PCI) and CAJPA as Amici Curiae on behalf

of Defendants and Respondents.

Fred J. Hiestand for the Civil Justice Association of California as Amicus Curiae on behalf of Defendants

and Respondents.

Counsel who argued in Supreme Court (not intended for publication with opinion):

Patricia A. Law

Law Offices of Patricia A. Law

10837 Laurel Street, Suite 101

Rancho Cucamonga, CA 91730

(951) 683-8320

Christopher D. Lockwood

Arias & Lockwood

1881 South Business Center Drive, Suite 9A

San Bernardino, CA 92408

(909) 890-0125

Fred A. Rowley, Jr.

Munger, Tolles & Olson

350 South Grand Avenue, 50th Floor

Los Angeles, CA 90071-3426

(213) 683-9100