Michael Peluso v. Calgary Flames et al: Violating Discovery Obligations Has Consequences in Workers Comp Case
By Jeff Birren
Clare Boothe Luce is credited with the now-famous line “no good deed goes unpunished.” Occasionally in court, bad deeds are also punished. And so it was recently for the New Jersey Devils. The Devils failed to produce critical medical records in a workers compensation case brought by Michael Peluso. Peluso received the records much later as a result of the National Hockey League league-wide concussion class action. Peluso’s counsel then sent the records to various doctors who issued reports that significantly impacted Peluso’s disability rating.
The Devils responded by arguing that these new reports were too late as they were issued after the discovery cut-off in the case. The workers compensation judge (“WCJ”) agreed. The Workers Compensation Appeals Board (“WCAB”) did not, (Michael Peluso v. Calgary Flames et al, WCAB Case Nos. ADJ8643967, ADJ10070125, ADJ10069887, ADJ10525135, ADJ10525090, 11-15-16). The WCAB did not let the Devils benefit from such a clear violation of its legal responsibility.
Peluso filed five workers compensation cases against his former NHL employers. The parties attended a Mandatory Settlement Conference (“MSC”) on April 20, 2016 and the WCJ ordered discovery closed. On May 12, 2016 Peluso’s counsel received startling medical records from the NHL Players Association (“NHLPA”) counsel. The records had been received by the NHLPA pursuant to court-ordered discovery in the concussion class action; records the Devils had failed to produce to Peluso in response to discovery requests served in November 2012. The newly produced records demonstrated that Peluso suffered a concussion while playing for the Devils in 1993 (where he was hospitalized as a result), which included a neurologist’s report that stated that Peluso had suffered a “Grand Mal” seizure while working out on a treadmill for the team. Further, the report indicated that this seizure was a result of the concussion and that “further head trauma could cause long term neurological damage” to Peluso (Id. at 2).
As part of the NHL class action litigation, Peluso was sent to see neuropsychologist Dr. Keri Lamberty. Dr. Lamberty reviewed the withheld medical records and issued a report “offering significant and directly relevant new medical opinions regarding applicant’s injuries and conditions” (Id. at 3), when those records had still not been produced in the worker’s compensation case.
Dr. Lamberty’s report was provided to Peluso’s treating physician, Dr. Steven Stein. Dr. Stein issued a medical report for the NHL case. Neither Dr. Lamberty’s nor Dr. Stein’s reports existed at the time of the MSC. Peluso’s counsel received those reports on June 1, 2016. Consequently, counsel obtained a discovery extension from opposing counsel to permit the introduction of the records obtained from the NHL litigation.
Peluso then sent the records to four doctors who routinely see workers compensation patients. Peluso received follow up reports in June, July and August 2016, all after the discovery cut-off. He sought to have the records introduced at trial. The Devils objected, claiming that its agreement to extend the discovery cut-off only pertained to the records received from the NHL and not reports created after that as a result of those NHL-produced records.
The WCJ judge apparently ruled that the records received from the NHL were admissible (Id. at 4, fn.1), but not the follow up reports, because Peluso had “failed to follow the proper procedures” by not filing a petition for reconsideration. Peluso filed a petition with the WCAB, for either reconsideration or removal of the WCJ’s order.
California Code of Civil Procedure §1008 states that an application for reconsideration must be filed within 10 days of the order that is the subject of the reconsideration motion. However, California workers compensation law is, as always, different. Labor Code §§5900(a), 5902 and 5903 all state that “reconsideration” only applies to the final order, decision or award. Evidentiary rulings by contrast are mere interlocutory orders, and in this unique context, cannot be the subject of a motion for reconsideration. The WCAB referred to the WCJ’s Order as “a hornbook example of an interlocutory evidentiary decision that is not reviewable via reconsideration (Id. at 5).
The WCAB then addressed Peluso’s petition for removal of the Order. It stated that removal “is the proper method for obtaining interlocutory review where a party alleges that an order will result in significant prejudice or irreparable harm, and that reconsideration would not be an adequate remedy following issuance of a final order” (Id.). Peluso claimed that he would be irreparably harmed by the exclusion of the evidence because it conclusively established that his seizure condition was caused by his employment and that the records were not available to him until after the discovery cutoff. The WCAB agreed.
Just as reconsideration was not the proper vehicle for Peluso to obtain relief before the WCAB, it was also not the proper vehicle for him to obtain relief before the WCJ. Consequently, that order did not provide a valid basis for denying relief.
The motion below was properly controlled by Labor Code § 5502(d)(3) that closes discovery as of the MSC “unless the proponent of the evidence can demonstrate that it was not available or could not have been discovered by the exercise of due diligence prior to the settlement conference.” The WCAB stated its “belief that the circumstance alleged” “more than adequately demonstrate” that the evidence was not available to Peluso nor could it have been discovered by due diligence” (Id. at 7).
The WCAB turned its attention to the Devils, stating that the documents “were responsive to valid discovery requests propounded in this case but were inexplicably not produced by defendant” (Id.). The WCAB referred to the Devils’ “dereliction of its discovery obligations” and thus the records were not available to Peluso (Id.).
The WCAB viewed the new medical reports. Those reports “appear(s) to be based on the doctors’ review and assessment of the wrongfully withheld New Jersey Devils Records or were otherwise unavailable to applicant,” and thus “those reports should be admitted as well” (Id.). Moreover, each of the doctors “apparently found that the newly discovered New Jersey Devils Records dramatically influenced and even altered their opinions.” Peluso “could not have obtained these opinions before the close of discovery because the New Jersey Devils wrongfully withheld the documents underlying them. Because these opinions were not available before the close of discovery due to a defendant’s improper discovery conduct, their admission is justifiable under Labor Code section 5502(d)(3)”(Id. at 8).
The WCAB next examined the agreement to keep discovery open after the NHL’s records were first produced. The Devils argued that the agreement only applied to the records produced by the NHL. However, the club “leaves the scope of this agreement entirely unaddressed in its Answer”(Id.). The WCAB viewed the “substance of defendant’s communication with applicant’s counsel” from documents in the file and came to the conclusion that it appeared that “defendants did agree to keep discovery open until twenty days before trial” and that “defendant does not assert it would be prejudiced by admission of applicant’s new evidence”(Id.).
Based on that “agreement,” the WCAB went on to allow the admissibility of various newspaper articles and videos that relate to the impact of concussions, without a showing that such records were not “unavailable” prior to the close of discovery (Id. at fn. 3). The records may or may not have the slightest scintilla of scientific integrity but those records would be admissible as a consequence of the failure to produce the critical evidence.
The WCAB thus denied the petition for reconsideration, granted the petition for removal of the order that excluded the evidence, and sent the case back to the WCJ. It added: “we suggest that the WCJ set a hearing to discuss any additional discovery any party needs before trial and set a reasonable new deadline for its completion (Id. at 9).
The WCAB’s decision has no mention of why the records were not produced. The reader is left to ponder whether the Devils and/or its counsel did so deliberately or otherwise. Conversely, what did Peluso’s counsel do that inflamed the WCJ to exclude the evidence? California Labor Code §3202 states that the Code “shall 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.” Yet the WCJ denied relief even when confronted with clear evidence of wrong doing by the Devils. Both sets of lawyers may have some “splaining to do.”
The timing of this decision may be unfortunate for the NHL. Sports leagues have to deal with concussion-related class action lawsuits, individual lawsuits and significant negative publicity related to head injuries. Youth participation in such sports may suffer as a result. The leagues and member clubs seek to reassure the press and public that they care for the health and welfare of its players. This case suggests otherwise.
Fortunately for Peluso, the WCAB did not allow the Devils to profit from withholding relevant records. This time at least, the bad act has been punished.
