Supreme Court rules in workers’ comp case

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A lawyer who argued before the Wisconsin Supreme Court is predicting its ruling Thursday will eliminate a “trap” that tripped up attempts to appeal workers’ compensation decisions.

The Supreme Court’s decision in Xcel Energy Services Inc. v. Labor and Industry Review Commission was both a defeat and victory for Matthew Bandt, who represented the Minneapolis-based Xcel Energy in the case. It was a defeat because the decision let stand a Labor and Industry Review Commission finding to grant workers’ compensation to John Smoczyk, a former Xcel employee.

Yet Bandt also deemed the decision a small victory because it clarified the steps lawyers must take to appeal decisions made by the state’s Labor and Industry Review Commission, which hears appeals of workers’ compensation decisions made at a lower level. Specifically, the Supreme Court case clarifies a state law that can lead to the throwing out of appeals of commission decisions if the lawyer bringing the action fails to name all of the “adverse parties” in a case.

A previous Supreme Court decision in Miller Brewing Co. v. Labor and Industry Review Commission had broadened the definition of “adverse parties” to make it apply to virtually any party involved in a case, Bandt said. The court’s decision Thursday instead stipulates the language applies only to parties whose interests stand to be harmed by the appeal.

“They are now going by the plain language of the statute,” Bandt said, “which is probably what they should have done in the first place.”

That broader definition became a trap for lawyers, Bandt said, because few thought to name parties who probably would not be harmed by a successful appeal.

For instance, in the Xcel case, Bandt did not name Xcel’s insurer, ACE American Insurance Co. The reason was that the insurer would have benefited had Xcel succeeded, meaning there was little indication the insurer should be considered an “adverse party.”

“Most people,” Bandy said, “they won’t think of their own insurance company as being an adverse party.”

Bandt said he has seen state lawyers on many occasions use the broad definition of adverse party as grounds for having an appeal of a workers’ compensation decision thrown out.

Dana Brueck, spokeswoman for the Wisconsin Department of Justice, declined to comment on the matter.

According to a concurring opinion attributed to Shirley Abrahamson, the Supreme Court’s chief justice, the ruling in the Xcel case, by overturning the court’s previous definition of “adverse party,” did more to muddy the waters than clarify them. She called on the Worker’s Compensation Advisory Council, an independent body, to work with lawmakers to give lawyers a better understanding of their responsibilities.

Jeff Beiriger, a member of the advisory council and executive director of the Specialty Contractors of Wisconsin, said the council will look at the Supreme Court’s ruling and could take up the points Abrahamson raised as soon as its next meeting, in September.

Whatever steps lawmakers take, Bandt said, the decision already has brought about a much-needed simplification in the law.

“You shouldn’t,” he said, “have to review however many years of Supreme Court decisions to determine how to properly plead a case.”

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