A Capehart Scatchard Blog

This Month’s Two Key Developments On Jurisdiction Of Medical Claim Petitions And Orders To Compel Reimbursement Of Costs Of Medical Marijuana

By on April 16, 2021 in Court Rulings with 0 Comments

We are two weeks into April, and already the New Jersey Supreme Court has considered two extremely significant issues for workers’ compensation practitioners, employers and carriers.  The first decision was announced on April 1, 2021 when the Supreme Court decided not to take certification in the matter of Anesthesia Assocs. of Morristown, PA v. Weinstein Supply Corp., 2021 NJ LEXIS 286.  This means that the unreported Appellate Division decision stands dealing with jurisdictional issues in medical claim petitions.

There are many hundreds of medical claim petitions in New Jersey where the only contact with the State of New Jersey is the location of the medical procedure.  Anesthesia Associates of Morristown involved two consolidated cases. In the first case, the petitioner lived in, worked in and was injured in Pennsylvania and even filed a claim petition in Pennsylvania.  The medical procedure took place in New Jersey, and the medical provider filed a medical claim petition in the New Jersey Division of Workers’ Compensation seeking additional charges.

In the other case, Surgicare of Jersey City v. Waldbaum’s, all contacts were in the State of New York, but the medical procedure again occurred in New Jersey. The medical claim petition was thereafter filed by the provider in the New Jersey Division of Workers’ Compensation seeking the balance of its original charges of $252,000.

In both cases the respective judges of compensation found that there was no jurisdiction in New Jersey because the State of New Jersey had no jurisdiction over the worker’s underlying workers’ compensation claim.  The judges dismissed the medical claim petitions. The Appellate Division affirmed:  “Applying these considerations to the two cases before us, we agree with the two judges of compensation that there was no cognizable claim for a work-related injury in either case.  Therefore, the Division did not have jurisdiction over AAM’s or SJC’s claims and they were appropriately dismissed, substantially for the reasons expressed by the two judges of compensation.

The medical providers next sought certification from the New Jersey Supreme Court.  The action of the Supreme Court in denying certification in effect is an affirmance of the unreported Appellate Division decision.  The problem is that unreported decisions are not technically precedential. They do not have to be followed by other judges.  It seems clear that the New Jersey Supreme Court agrees with the reasoning of the judges of compensation and the Appellate Division.  Frankly, the Appellate Division decision needs to be reported by the Committee on Publications because it resolves a hotly contested issue within the Division and will avoid further appeals.

On April 13, 2021, the New Jersey Supreme Court released its decision in Vincent Hager v. M&K Construction, (A-64-19) (084045).  The facts of this case will only be dealt with briefly, as the undersigned has written extensively about Hager in prior blogs. The issue concerned whether an employer can be ordered to reimburse the petitioner for the ongoing costs of medical marijuana under the New Jersey Compassionate Use Act.  The Judge of Compensation found in favor of petitioner and ordered the employer to make reimbursement. The Appellate Division affirmed in 2020.  The Supreme Court has now affirmed the Appellate Division decision in a very lengthy opinion.

The Supreme Court found as follows:

  • The Compassionate Use Act cannot require a private health insurer to reimburse a person for costs associated with the medical use of cannabis, but the term “private health insurer” does not include workers’ compensation coverages. Therefore employers and carriers in workers’ compensation are not exempt from the reimbursement requirement by statute.  
  • The Court found that there is competent medical evidence to support the argument that medical marijuana can restore some of a worker’s function or, as in Mr. Hager’s case, relieve symptoms such as chronic pain and discomfort. For this reason the Court said that medical marijuana may be found to constitute reasonable and necessary care under the New Jersey Workers’ Compensation Act.
  • The Court devoted most of its decision to the conflict between the Controlled Substances Act, which lists marijuana as a Schedule One drug, and the Compassionate Use Act.  The issue more precisely was whether the federal law preempts state law in respect to requiring reimbursement for costs of medical marijuana.  The Court focused heavily on recent Congressional appropriations riders. “Congress has, for seven consecutive fiscal years, prohibited the DOJ from using funds to interfere with state medical marijuana laws through appropriations riders.”  The Court said, “We conclude that the CSA, as applied to the Compassionate Use Act and the Order at issue, is effectively suspended by the most recent appropriations rider for at least the duration of the federal fiscal year.”  The Court added,  “Qualified patients may continue to possess and use medical marijuana, and related compensation orders may be entered while federal authorities continue to enforce the CSA to the extent Congress permits.”
  • The Court rejected the argument that employers which are ordered to reimburse employees for costs of medical marijuana amount are violating federal law by aiding and abetting under 18 U.S.C. section 20.  To be more precise, M&K contended that the company was being forced to break federal law.  The Court concluded that there can never be aiding and abetting when actions are taken pursuant to a court order, including an order in the Division of Workers’ Compensation.

Some other state courts, such as in Maine and Massachusetts, have gone in a different direction from the New Jersey Supreme Court on the preemption issue.  The New Jersey Supreme Court acknowledged that there is no consensus on this issue among all the states that have addressed it.  Eventually this issue may find itself before the United States Supreme Court.   

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John H. Geaney

About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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