Maria Auqui,, et al., Respondents,v.Seven Thirty One Limited Partnership, et al., Appellants.BriefN.Y.January 8, 2013New York County Clerk’s Index No. 100232/04 Court of Appeals of the State of New York MARIA AUQUI, as Guardian of the Property of Jose Verdugo, and MARIA VERDUGO, Plaintiffs-Respondents, – against – SEVEN THIRTY ONE LIMITED PARTNERSHIP, BOVIS LEND LEASE LMB, INC. and NORTH SIDE STRUCTURES, INC., Defendants-Appellants. BRIEF FOR AMICI CURIAE NEW YORK STATE AFL-CIO, NEW YORK CITY CENTRAL LABOR COUNCIL AND THE BUILDING AND CONSTRUCTION TRADES COUNCIL OF GREATER NEW YORK AND VICINITY IN SUPPORT OF PLAINTIFFS-RESPONDENTS Of Counsel: EDWARD J. GROARKE, ESQ. JENNIFER D. WEEKLEY, ESQ. COLLERAN, O’HARA & MILLS L.L.P. Attorneys for Amici Curiae New York State AFL-CIO, New York City Central Labor Council and The Building and Construction Trades Council of Greater New York and Vicinity 1225 Franklin Avenue, Suite 450 Garden City, New York 11530 Tel.: (516) 248-5757 Fax: (516) 742-1765 Date Completed: October 4, 2013 TABLE OF CONTENTS Table of Authorities . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Identity of Amici Curiae and Their Interest in this Case...................................... 1 Preliminary Statement........................................................................................... 3 Statement of Facts and Procedural History........................................................... 7 Argument............................................................................................................... 8 I. Tort Recovery Rights Of New York's Workers Should Not Be Truncated By Improper Application Of The Collateral Estoppel Doctrine To Final Determinations Of The Workers' Compensation Board.............................................................................. 8 II. New York's Workers Should Not Be Deprived Of Their Constitutionally Protected Right To A Jury Trial On Their Personal Injury Claims Merely Because They Participate In The Workers' Compensation System ................................................ 11 Conclusion............................................................................................................. 14 TABLE OF AUTHORITIES Cases Akgul v. Prime Time Trans., Inc., 293 A.D.2d 631 (2d Dept. 2002) ..... ........... .. 9 Augui v. Seven Thirty One Ltd. P'ship, 83 A.D.3d 407 (1st Dept. 2011) ............ 7 Auqui et al. v. Seven Thirty One Ltd. P'ship, 2013 NY Slip Op. 950 ................. 7, 9 Dietrick v. Kemper Ins. Co., 76 N.Y.2d 248 (1990) ............................................ 11 Engel v. Calgon Corp., 114 A.D.2d 108 (3rct Dept. 1986), aff'd, 69 N.Y.2d 753 (1987) .............................................................................. 10 Gilberg v. Barbieri, 53 N.Y.2d 285 (1982) ........................................................... 10 Kaufman v. Lilly & Co., 65 N.Y.2d 449 (1985) .................................................. 10 O'Gorman v. Journal News Westchester, 2 A.D.3d 815 (2d Dept. 2003) .......... 9 Statutes McKinney's New York State Constitution, Article I, § 2 .. .. .. .. ... ...... ... .. ... .. . . .. . . . . . 12 McKinney's Workers' Compensation Law,§ 37[1] ............................................ 9 McKinney's Workers' Compensation Law, § 118 ............................................... 12 12 NYCRR 301.1 ................................................................................................. 13 United States Constitution, 7th Amendment.......................................................... 12 Other Sources New York State Guidelines for Determining Permanent Impairment and Loss of Wage Capacity, New York State Workers' Compensation Board, December 2012, http://www.wcb.ny.gov/content/mainlhcpp/ ImpairmentGuidelines/20 12ImpairmentGuide. pdf. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 10 11 IDENTITY OF AMICI CURIAE AND THEIR INTEREST IN THIS CASE The New York State AFL-CIO ("NYS AFL-CIO") 1s a coalition of approximately three thousand (3,000) labor organizations, which collectively represent an estimated 2.5 million workers in New York. Affirmation of Jennifer Weekley, Esq. in Support of Motion of the NYS AFL-CIO, New York City Central Labor Council and the Building and Construction Trades Council of Greater New York and Vicinity to be heard as Amici Curiae ("Weekley Aff.") at 12; Affidavit of Mario Cilento, President of NYS AFL-CIO in Support of Motion ("Cilento Aff.") at 11. The NYS AFL-CIO is dedicated to advancing, through united action, the interests of working men and women with respect to significant labor issues that arise in the courts and legislature. Id. As part of its mission to defend the interests of working persons, the NYS AFL-CIO has intervened and filed Amicus Curiae briefs in numerous lawsuits affecting the terms and conditions of employment for workers throughout New York. Id. Its affiliates represent millions of workers living and working in the state who rely on the protections of New York's Workers' Compensation Law. Id. The NYS AFL-CIO recognizes that the guaranteed medical care and partial income replacement afforded injured workers by New York's Workers' Compensation system should not now also require these workers to sacrifice important rights against third-party tortfeasors. Cilento Aff. 113, 4. 1 The New York City Central Labor Council (the "NYCCLC") is the nation's largest regional labor federation, bringing together over 300 local private, public and building trade sector unions. Weekley Aff. <][ 3, Affidavit of Vincent Alvarez, President of the NYCCLC in Support of Motion for Leave to File Brief as Amicus Curiae ("Alvarez Aff.") at<][ 1. The NYCCLC represents 1.3 million workers and is dedicated to supporting, advancing and advocating for the working people of New York City, including in the courts and legislature, and by filing Amicus Curiae briefs on issues of critical import to them. Id. The protections of the no- fault Workers' Compensation system are critical to New York City's working people, including many who work in occupations such as firefighting, construction, utilities, and medical care, where the risks of occupational injury are especially high. ld. The NYCCLC recognizes that New York City's workers should not be required to sacrifice important rights against third-parties who injure them merely because they participate in the Workers' Compensation system to obtain medical care and limited replacement income. Alvarez Aff. <][<][ 4, 5. The Building and Construction Trades Council of Greater New York and Vicinity (the "BCTC") is an umbrella organization comprised of affiliated building and construction trade unions in the New York City area. Weekley Aff. <][ 4, Affidavit of Gary LaBarbera, President of the BCTC in Support of Motion for Leave to File Brief as Amicus Curiae ("LaBarbera Aff.") at <][ 1. The BCTC is 2 currently comprised of local affiliates of fifteen (15) national and international unions, representing approximately one hundred thousand union members in the New York City area. I d. The BCTC provides coordination and support to is affiliated local unions in order to achieve a unified effort on behalf of organized construction workers with respect to governmental affairs, the improvement of working conditions, and community and economic developments that create the construction jobs and provide work opportunities for the BCTC affiliates' members. In the past, the BCTC has been a party to, or has been heard as Amicus Curiae, in numerous lawsuits before this Court, other courts of this State and the courts of the United States. The workers represented by the BCTC and its component local unions rely on the critical protections of the Workers' Compensation system, which are threatened in this case. Id. PRELIMINARY STATEMENT The NYS AFL-CIO, NYCCLC and the BCTC submit this Memorandum in Support of their motion to be heard as Amici Curiae in support of the Plaintiffs- Respondents' Motion to Affirm Upon Reargument and Reconsideration the Decision of the Appellate Division, First Department dated April 5, 2011, because the Order and Judgment of this Court dated February 14, 2013 reversing the Decision of the Appellate Division (the "Order") undermines the interests and rights of workers and their families in several unintended critical ways, as set forth 3 in the supporting Affidavits of Mario Cilento of the NYS AFL-CIO, Vincent Alvarez of the NYCCLC, and Gary LaBarbera of the BCTC. First, unless the Appellate Division's decision is affirmed upon reargument, workers injured on the job, some grievously, may be forced to choose between immediate no-fault coverage for medical care and partial income replacement through Workers' Compensation, and make-whole recovery in a third-party tort suit. By ruling that Workers' Compensation judges' findings respecting the existence and duration of disabilities under the Workers' Compensation Law have preclusive effect in subsequent third-party tort suits, the Court's Order may force injured workers to forgo Workers' Compensation in order to protect their rights in a third-party action. As a result, critical medical care and income replacement will be lost to the injured worker at a time when he or she needs them the most. The Order also infringes injured workers' constitutionally protected right to a jury trial in their personal injury action by affording improper collateral estoppel effect to determinations of the Workers' Compensation Board in subsequent judicial proceedings. Both the United States and New York State's Constitution guarantee a plaintiff's right to a jury trial in a personal injury action. A jury trial is more protective of workers' overarching interests than the Workers' Compensation forum. 4 The Order also threatens to skew the venerable balance between the rights of injured workers and their employers at the heart of New York's Workers' Compensation Law, passed almost a century ago. Under the Workers' Compensation Law, injured workers are afforded "swift and sure" compensation for their medical needs and partial replacement income without regard to their employer's fault in exchange for relieving employers of civil liability. This Court's Order offsets the Law's balance by effectively imposing an additional burden on the injured employees -now requiring them to risk make-whole relief and suffer an infringement of their constitutional jury trial right by participating in the Workers' Compensation program. The burden of the Order is likely to fall disproportionately on injured workers and their families who are without sufficient financial resources to weather the impact of an injury and related period of unemployment while litigating a third-party tort claim. These injured workers and their families may be disproportionate! y forced to elect Workers' Compensation and forgo make-whole relief. The burden of the Order is also likely to fall heavily on workers in occupations where the risk of on-the-job injury is especially high, including New York City and State firefighters, and building and construction, utilities and medical care workers. 5 The burden of the Order may also adversely impact public assistance programs in New York City and State, as injured workers and their families, who elect to forgo Workers' Compensation in the hope of attaining relief in a personal injury suit, may resort to interim public assistance for medical care and subsistence income and seek care in emergency rooms as medical care providers of last resort. All Federal, State and City taxpayers, including workers represented by the proposed Amici, would be adversely affected by an uptick in the use of public assistance programs and emergency rooms for delivery of medical care. Finally, the Order may unfairly create a windfall for third-party tortfeasors, who play no part in the compromise at the heart of the Workers' Compensation Law, but may benefit from the collateral estoppel effect given to final determinations of the Workers' Compensation Board which reduce their liability. This windfall represents an unlegislated judicial expansion of the scope of the Workers' Compensation Law to protect third-party tortfeasors at the expense of injured workers and their families. This windfall is especially unfair because injured workers cannot likewise claim preclusive effect of WCB disability determinations favorable to them. In those cases, presumably, third-party tortfeasors will escape collateral estoppel effect on the ground that they were not parties to the WCB proceeding. 6 STATEMENT OF FACTS AND PROCEDURAL HISTORY Plaintiff, Jose Verdugo, was a restaurant delivery worker in midtown Manhattan who was permanently injured when a large piece of plywood fell from a 50-story construction site and struck him in the head. The injury occurred on December 24, 2003 and was caused by a third party, not his employer. (See this Court's Order, 2013 NY Slip Op. 950, majority opinion dated February 13, 2013 at p. 2). Despite the permanent nature of Mr. Verdugo's injury and its lingering effects, which necessitated the appointment of a legal guardian, the Workers' Compensation Board, after excluding expert medical testimony, determined that his disability ended on January 24, 2006. Id. Thereafter, defendants in Mr. Verdugo's personal injury action moved to preclude him from relitigating the duration of his work-related injury on the grounds that the issue had been fully and fairly litigated and decided before the Workers' Compensation Board. Id. The Supreme Court granted defendants' motion initially and on reargument. But the Appellate Division, First Department reversed, correctly reasoning that the Workers' Compensation Board decision was "a final determination" and "a mixed question of fact and law" that was not entitled to preclusive effect. Augui v. Seven Thirty One Ltd. P'ship, 83 A.D.3d 407, 409, 920 N.Y.S.2d 79, 80 (1st Dept. 2011). By its Order dated February 14, 2013, this Court reversed the Order of the Appellate Division and incorrectly found that the Workers' Compensation Board's 7 determination of the duration of Mr. Verdugo's disability should be afforded collateral estoppel effect in his personal injury action against the third-party tortfeasor. By its Order dated June 27, 2013, this Court granted Plaintiffs- Respondents Motion for Reargument and Reconsideration. ARGUMENT This Court erred in finding that the issues surrounding Mr. Verdugo's disability and its duration were not mixed questions of fact and law and/or final legal conclusions of the Workers' Compensation Board, that they were identical to issues raised in this case, and that Mr. Verdugo had fully and fairly litigated them. This Court also erred in failing to recognize that Mr. Verdugo, like all injured workers, is entitled to a jury trial of the issues surrounding his injury and ongoing disability as caused by a third-party. I. TORT RECOVERY RIGHTS OF NEW YORK'S INJURED WORKERS SHOULD NOT BE TRUNCATED BY IMPROPER APPLICATION OF THE COLLATERAL ESTOPPEL DOCTRINE TO FINAL DETERMINATIONS OF THE WORKERS' COMPENSATION BOARD Because the question of Mr. Verdugo's ongoing disability was both a mixed question of fact (the existence of his injuries) and law (whether his injuries were caused on the job and amount to a disability within the meaning of the Workers' Compensation Law), as well as a final determination of the Workers' 8 Compensation Board, this Court erred in finding that preclusive effect should be given to that determination in his subsequent personal injury case. As Judge Piggott's dissenting opinion in Auqui correctly noted "[i]t is well- settled that, while factual issues that are 'necessarily decided in an administrative proceeding are given collateral estoppel effect ... an administrative agency's final conclusion, characterized as an ultimate fact or a mixed question of fact and law, is not entitled to preclusive effect' (Akgul v. Prime Time Trans., Inc., 293 A.D.2d 631, 633 (2d Dept. 2002); see also~., O'Gorman v. Journal News Westchester, 2 A.D.3d 815, 816-817 (2d Dept. 2003))." Augui et al. v. Seven Thirty One Ltd. P'Ship, et al., 2013 NY Slip Op. 950, Dissenting Opinion at 2. Nor are an agency's purely legal conclusions entitled to estoppel effect. Id. This Court's majority opinion in Augui acknowledged the rule but erred in failing to apply it to the case, where the issue of Mr. Verdugo's disability within the meaning of the Workers' Compensation Law constituted a legal conclusion, informed by policy considerations within the Workers' Compensation Board's expertise, that concluded his entitlement to benefits. Id. at pp. 3-4. The legal basis of disability was established by the legislature when it enacted the Workers' Compensation Law: "Whenever used in [the statute], ... "Disability" means the state of being disabled from earning full wages at the work at which the employee was last employed." WCL § 37[1]. It is beyond dispute that disability findings are legal 9 conclusions: "Disability is a legal determination that reflects the impact of a workplace injury on the claimant's ability to work." New York State Guidelines for Determining Permanent Impairment and Loss of Wage Capacity, New York State Workers' Compensation Board, December 2012, p. 8, available from http://www.wcb.ny.gov/content/main/hcpp/ImpairmentGuidelines/20121mpairment Guide.pdf. There is clearly a difference between the meaning of disability and loss of wage earning capacity in the colloquial and narrow Workers' Compensation context and the standard and broader definition in the tort litigation context. A finding of disability and lost earning capacity in the Workers' Compensation context depends upon resolution of both factual and legal questions. In addition, collateral estoppel effect should not be given where, as here, there is no identity of issue between the two proceedings. See Gilberg v. Barbieri, 53 N.Y.2d 285, 291 (1982)~ Kaufman v. Lilly & Co., 65 N.Y.2d 449, 455 (1985)~ Engel v. Calgon Corp., 114 A.D.2d 108 (3rd Dept. 1986), aff'd, 69 N.Y.2d 753 ( 1987). The causation, extent and duration of Mr. Verdugo's injury by a third-party tortfeasor were never before the Workers' Compensation Board. Moreover, the Workers' Compensation Judge determined only that Mr. Verdugo was able to return to work in one capacity --- that specified by the Workers' Compensation Law --- he remained disabled in other capacities. Thus, it cannot be said that these issues were fully and fairly litigated. 10 This Court's holding in Dietrick v. Kemper Ins. Co., 76 N.Y.2d 248 (1990), highlights the colloquial and distinct nature of disability findings within Workers' Compensation context. The Court there found that Workers' Compensation disability awards fall within the definition of "basic economic loss" for purposes of their impact in a subsequent tort suit, rather than more generalized loss included in make-whole relief. This decision underscores the conclusion that Workers' Compensation disability determinations involve mixed questions of law and fact, and are far from identical to issues presented in third-party tort suits. Because New York's injured workers should not have to be concerned that their recovery rights against third parties will be truncated by improper application of the collateral estoppel doctrine should they participate in the Workers' Compensation system, the decision of the Appellate Division dated April 5, 2011 should be affirmed upon reargument and reconsideration by this Court. II. NEW YORK'S INJURED WORKERS SHOULD NOT BE DEPRIVED OF THEIR CONSTITUTIONALLY PROTECTED RIGHT TO A JURY TRIAL ON THEIR PERSONAL INJURY CLAIMS MERELY BECAUSE THEY PARTICIPATE IN THE WORKERS' COMPENSATION SYSTEM By improperly affording collateral estoppel effect to the Workers' Compensation Board's determination of the nature and duration of Mr. Verdugo's disability, this Court also unduly infringed workers' Constitutional rights to a jury trial. Under both the United States and New York State Constitution, Plaintiffs, 11 including workers injured by third parties, are entitled to a jury trial in a personal injury case. (See U.S. Constitution, 7th Amendment, and New York State Constitution Article I, § 2). Here, the Workers' Compensation Board's ultimate determination of the duration of Mr. Verdugo's disability lacked the constitutionally protected safeguards inherent in a jury trial in state or federal court. A determination of an injury claim by the Workers' Compensation Board may not protect an injured worker's broad, ongoing interests as a jury trial may in several respects. First, in a Workers' Compensation proceeding, administrative law judges, not lay juries, preside over proceedings, hear and determine all issues and make awards, which can be appealed only to the Workers' Compensation Board. Administrative law judges and Workers' Compensation Board members are not elected, and may include non-lawyers. By contrast, presiding New York State Supreme Court Justices are elected and may be screened for qualification by the Independent Judicial Election Qualification Commission and Bar Associations. Second, Workers' Compensation Law Judges are not bound by common law or statutory rules of evidence or by technical or formal rules of procedure. McKinney's Workers' Compensation Law § 118. They have wide discretion to exclude evidence, employ shortcuts in reasoning, admit hearsay and decide which experts will be heard. Medical testimony is typically limited to one hour in total in 12 a Worker's Compensation hearing. Testimony of non-physicians is mostly prohibited. See, e.g., 12 NYCRR 301.1 et seq. By contrast, a personal injury case is governed by the New York Civil Practice Law and Rules with no undue restrictions on the presentation of evidence. Third, Workers' Compensation hearings are increasingly held by telephone conference with written submissions, thereby hindering the fact-finder's ability to judge credibility. By contrast, live witness testimony is the rule in personal injury trials. Fourth, injured workers have no opportunity to correct Workers' Compensation hearing transcripts, while court transcripts are reviewed and corrected. Finally, there are strict statutory guidelines and caps for determining the scope and amount of Workers' Compensation coverage. By contrast, a jury is not so limited, but may determine all appropriate compensation due to injured workers. These fundamental differences between the Workers' Compensation administrative proceedings and the judicial system demonstrate that determinations respecting the rights of injured workers should not be relegated exclusively to an administrative tribunal but must be protected within the judicial system. 13 CONCLUSION For the foregoing reasons, the NYS AFL-CIO, NYCCLC and the BCTC respectfully request that the Plaintiffs-Appellants' Motion to Affirm Upon Reargument and Reconsideration the Decision and Order of the Appellate Division, First Department dated AprilS, 2011, be granted. Dated: Garden City, New York October 4, 2013 TO: Matthew W. Naparty, Esq. Mauro Lilling N a party LLP 130 Crossways Park Drive, Suite 100 Woodbury, NY 11797 Respectfully submitted, COLLERAN, O'HARA & MILLS L.L.P. Attorneys for Amici Curiae NEW YORK STATE AFL-CIO, NEW YORK CITY CENTRAL LABOR COUNCIL AND THE BUILDING AND CONSTRUCTION TRADES COUNCIL OF GREATER NEW YORK 14 ennifer D. Weekley, Es Edward J. Groarke, Esq. 1225 Franklin A venue, Suite 450 Garden City, New York 11530 (516) 248-5757 Annette G. Hasapidis, Esq. Law Offices of Annette G. Hasapidis PO Box 827 South Salem, NY 10590 Michael Jaffe, Esq. New York State Trial Lawyers Association 132 Nassau Street, 2nd Floor New York, NY 10038 15