Res Judicata is in the workers' compensation news. There is a perception of conflicting appellate decisions in Virginia, leading to legislative efforts to change or clarify the law there as regards issues or claims that are not plead by an injured worker. The legal term "res judicata is the principle that a cause of action may not be relitigated once it has been judged on the merits," according to Legal Information Institute (LII) at Cornell.
The LII explains that the concept of "res judicata is also frequently referred to as 'claim preclusion.'" At first glance, it is likely that the issue being discussed in Virginia is more of a "claim preclusion" conclusion than the broader definition of "judged on the merits." However, the "on the merits" remains understandable in context.
The controversy in Virginia stems from decisions of the appellate court, in particular Brock v. Voith Siemens Hydro Power, 716 S.E.2d 485 (Va. Ct. App. 2011). In Virginia, workers' compensation trial decisions are made by Deputy Commissioners. The first level of appellate review occurs before the Commission itself (comprised of three members appointed by the Legislature). Further appellate review is available through the constitutional appellate court. Interestingly, one of the current Commissioners was apparently involved with representing the appellant, Brock, in that appeal back in 2011.
The court then noted Brock was injured in 2007 and shortly thereafter filed a claim for benefits alleging injury to "his shoulder, back, and hips." As trial approached, Brock's attorney sought a continuance to gather evidence. The parties stipulated that Brock "had injured his left shoulder," and Brock neither provided evidence of other injuries nor asked for further continuance to develop such evidence.
That hearing concluded and an order was entered awarding certain benefits and dismissing the claim. Months after, Brock's attorney sent a letter asking for benefits related to "injuries to his hip, back, and legs arising out of the same accident." In some jurisdictions, such claims are referred to as "added," in that they are suffused into some other claim (shoulder). Despite the request being a letter, it was treated as a "claim" and set for hearing. That informality of a letter seeking benefits may itself be intriguing to those in jurisdictions that are more formal in their litigation processes.
The Deputy Commissioner held another hearing, and Brock appeared for it without counsel, or "pro-se." An order was entered concluding these "new" injuries had been previously plead in claims prior to the first hearing. As such, the Deputy concluded that those claims had been plead and thus "abandoned” by failing to prove those injuries and any entitlement to benefits there from.
However, the Deputy did not conclude abandonment equaled res judicata, instead concluding those issues were essentially dismissed, labeled "a non-suit" (a judgment given against a plaintiff in which the court dismisses a case). The non-suit or dismissal characterization would thus allow the issues to be litigated anew. Neither the Commission nor the appellate court agreed with the Deputy's characterization, with the court noting "Nothing in the record suggests Brock ever sought to withdraw any portion of his claim."
The first appellate review, by the Commission, concluded that the claims were barred by res judicata. This was because the claims "either were previously litigated or 'could have been litigated'" at the first hearing. The outcome of that first hearing "settle(d) the rights of the parties regarding the compensability of the injuries alleged." Thus, it is not merely that some issue was litigated that can implicate res judicata, but it "also bars matters which could have been litigated." In this manner, some find it more descriptive to refer to such as "waiver" rather than res judicata, as in the party "waived" her/his/its right to prosecute that particular claim.
The Brock court noted that hearing a case in a serial manner might be more expensive, and "would (potentially) 'waste considerable time and expense on the part of the Commission.” The Commission referenced in that discussion, without specifically labelling, the concept of judicial economy. There is some need to balance efficiency in the judicial process with effectiveness. The primary goal is of course to deliver an effective dispute resolution process, but there are many disputes that require attention. Therefore efficiency may be critical in a broader context of societal need to be balanced against individual rights.
The Virginia Court explained the preclusion of both issues and claims. The "issues" term refers to res judicata barring repeated litigation of something that has already been "actually litigated" in any proceeding. However, the "claim" term prevents relitigating the "very same claim" regardless of any similarity or identity of the issues. The Court explained that “'every litigant should have opportunity to present whatever grievance he may have' but if given an opportunity to do so and 'having failed to avail himself of it, he must accept the consequences,'” citing the state's supreme court in a 1909 decision. When an appellate court cites century-old authority, it has a connotation to some of "its been this way a long time."
Because those allegations regarding the "shoulder, back, and hips" could have been litigated in the first hearing, the Court concluded that they should have been. The Court expressed some confusion as to why counsel for the worker had not pursued them. However, it conceded that workers' compensation cases in some regards are serial by their very nature, with issues arising periodically regarding treatment, care, etc. It also conceded that a Deputy might specifically defer a particular determination or issue until some future proceeding, something a party might specifically request. That a Deputy could do so, however, did not equate in the court's analysis to this Deputy having done so in this case.
The legislation that has been proposed in Virginia is Senate Bill 1351. This would amend the Virginia Workers' Compensation law to eliminate res judicata in this context. The bill would add a new subsection to the statute:
§ 65.2-706.2. Claims not barred. No order issued by the Commission awarding or denying benefits shall bar by res judicata any claim by an employee or cause a waiver, abandonment, or dismissal of any claim by an employee if the order does not expressly adjudicate such claim.
This might lead to a variety of outcomes. Some might perceive the change as requiring greater specificity of a Deputy. In that context, would the outcome in a case such as Brock remain the same if the Deputy's original trial order specifically stated: "this claim is hereby dismissed, and is ordered removed from the hearing docket; this includes all allegations set forth in the amended claim as related to the 'shoulder, back, and hips?'" Would it suffice if the order dismissed "all claims, including but not limited to those adjudicated herein?" Or, would a more general mention of dismissal of "all other claims plead, but upon which evidence was not adduced" suffice?
There are those who may see the legislative proposal as more favorable to the injured worker, an ability to litigate more frequently or serially. Others may instead see merely a requirement for more judicial formality, and in that more notice to the worker of the implications of a trial outcome.
The Florida appellate court long ago rendered a decision similar to Brock: Betancourt v. Sears Roebuck & Co., 693 So. 2d 680 (Fla. 1st DCA 1997). The Court there concluded to consider the case "en banc in order to maintain uniformity of this court's decisions." That is, the entire Court considered the appeal rather than the more typical three-judge panel. Such a process brings more weight to a decision and analysis because it is of the entire court. The Court there reiterated the maxim that when a claim is asserted, and the matter proceeds to trial, the issue must be withdrawn, the trial continued, or jurisdiction reserved in the adjudication. When none of these three occur, "the doctrine of res judicata bar(s) the subsequent claim" for that benefit.
The Betancourt Court expounded and described three potentials.
First, if the Judge specifically reserves jurisdiction over some issue, then that order is "non-final" in the view of the Court; thus, it is not likely to be immediately subject to appellate review absent some exceptional circumstance.
Second, if the issue is tried, meaning evidence is produced regarding it, but the Judge does not rule on that issue, the Court deems that claim denied and the order thus final for purposes of appellate review, and likely reversible.
Finally, if an issue is "ripe" at the time of the hearing and the injured worker does not "produce evidence or obtain a ruling," then the Court will "will consider the claim abandoned and the issue waived." In this last example, a subsequent claim for that same benefit "will be barred by the principle of res judicata."
There is some complexity in this three-element analysis. However, there is likewise clarity. Counsel and claimants alike would be well served with a focus on Betancourt and its implications both when filing a petition (all issues should be "ripe, due, and owing," section 440.192(1)), and when preparing for trial (one might consider then "does this issue remain ripe?").
Whether the Virginia legislative action, if passed, results in a practical change or not will be determined in future cases. It is possible that everyone will see that statutory language as clear and conclusive, and yet others perhaps not so much.
The statutory language might result in substantive change. The outcome could be an increase in piecemeal litigation of workers' compensation there. The very nature of workers' compensation litigation has been perceived by courts as "serial," meaning in parts and pieces rather than necessarily in a single trial as a personal injury case is more likely to occur. It is possible that this Virginia legislation may increase that propensity there, to the possible substantive benefit of workers and detriment of employers. In that regard, some might perceive some shift in the "grand bargain" that is the overall fabric of compromise and "quid pro quo" that is workers' compensation.
However, it may instead simply lead to the rote inclusion of dismissal language in each trial order. The trial attorney that fails to address some ripe, pled, and pending issue at trial may be as likely to fail to address it in response to such a detailed order (by rehearing, or by seeking review). If the legislative change merely accomplishes a greater focus on the content of orders, that may afford parties better knowledge and clarity. Clarity, that is, as to what was considered ripe, was adjudicated, or was seen as waived. However, if counsel (or party) is not thereafter focused on immediately correcting some misperception, it is possible that a change in order language could be the only real effect of the legislature's efforts.
Thus, the change may help parties to better understand outcomes. Or, if might result in more litigation and increased costs (of benefits or merely judicial effort). The practical implications may be interesting to observe in the event the legislature adopts the change.
