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By DAN REYNOLDS, senior editor of Risk & Insurance®

A workers' compensation adjudication underway in California could end up plugging a legal loophole that is costing teams in the National Football League (NFL >) millions in workers' comp claims.

A nine-page May 24 opinion by the California Workers' Compensation Appeals Board could help enforce a statute that calls for injured workers employed in another state but who worked in California to be compensated in the state where the employer is headquartered, Timothy A. Peterson, a workers' comp defense lawyer based in California, said.

Peterson, a founding partner with Peterson & Colantoni LLP in Ladera Ranch, Calif., received the opinion on behalf of two < NFL > teams, the Cincinnati Bengals and the 2010 Super Bowl champion New Orleans Saints.

Under California's workers' comp code, players must have merely practiced in the Golden State to be eligible for compensation.

And because California law doesn't require plaintiffs to show a specific injury, plaintiff's lawyers argue that clients are entitled to workers' comp just from the cumulative nature of the wear and tear on their bodies.

In the past two years, plaintiff's lawyers have exploited the loophole by getting the California workers' comp system to pay millions of dollars to injured < NFL > players, some of whom played as few as one game in California or may have only practiced there.

Under the state's expansive cumulative trauma law, physicians are awarding plaintiffs permanent disability ratings even if the injuries themselves were not sustained in California. In some cases plaintiff's attorneys are hauling aging players, some of whom played as far back as the 1960s, before orthopedists and other doctors and getting substantial permanent disability ratings

More than 1,500 < NFL >-related California cumulative trauma cases have been filed in the past two years, according to Alex Fairly, an Amarillo, Texas-based senior vice president for insurance brokerage Willis and head of its Global Sports Practice.

Workers' comp claims filed in California against < NFL > teams could eventually total $1 billion.

"I've never seen anything like this in my life," Fairly said.

Players in some cases are getting 85 percent or more permanent disability ratings and collecting an average $180,000 per claim.

"The teams get served a workers' comp suit, along with the bill for the medical exams," Fairly said, adding that the cost of the medical exams runs between $10,000 and $15,000.

Some of the doctors performing examinations and the former athletes pursuing claims are pushing the ethical boundaries, Fairly suggested.

"Some of the guys literally never played in a game--were only practice squad guys or simply tried out for the team," Fairly said. "We have a guy who completed an Ironman Triathlon two weeks before he was awarded $300,000 for his 90 percent-plus permanent disability," Fairly said.

The < NFL Players Association, the labor union representing football players, did not return a request for comment.

"They have an orthopedist that looks at every joint, they have a neurologist that looks at their head, and we have had 45 percent disability ratings coming from a dentist, and just a dentist," Fairly said.

THE CARROLL CASE

The case Peterson is trying on behalf of the Bengals involves University of Miami graduate Wesley Carroll, who played wide receiver for the Bengals and the Saints in a three-year career from 1991 to 1994.

Carroll alleges cumulative trauma to his spine, left thumb, knees and other maladies, and claims 46 percent permanent disability.

Peterson argues that a player like Carroll, who for part of his career was employed in Ohio but never in California, can be sent back to his home state for medical review and claim adjudication if his case meets each of three criteria.

The criteria include that the player was in the state temporarily; that his employer, the Bengals, is covered by traditional or self-insurance; and that the home state in question, Ohio, would reciprocate with California. Peterson said that he is in the process of providing the evidence that all three of those criteria are present in the Carroll case.

The opinion offered on May 24 orders a lower trial court to take that evidence into account.

A reciprocal agreement would dictate sending a California-based player who had played only temporarily in Ohio back to California for diagnoses and compensation.

As many as 13 states may have reciprocity with California and could eventually follow the path that Peterson is taking, Fairly said. States without such agreements will have to develop the political will to create that reciprocity through their legislatures.

June 1, 2010

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