• Nathalie S. Pettit

Supreme Court Overturns Denial of Benefits to Worker for Mold Exposure Claim

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The Hawaii Supreme Court overturned a denial of benefits to a grocery store worker on his claim of injury from workplace exposure to mold.

Case: Cadiz v. QSI Inc., No. SCWC-14-0000594, 06/30/2020, published.

Facts: Jay D. Cadiz worked as a meat cutter at the Times Supermarket in Kaneohe. The store was owned by QSI Inc. Prior to working at the store, Cadiz was healthy and exercising daily, including engaging in martial arts. Shortly after moving to the Kaneohe store in 2004, he allegedly "began to feel sick all the time." Cadiz alleged that the store was full of mold and that the ceiling of the meat department was always wet. Twice, the ceiling fell into the meat department during rainstorms. Beginning in 2007, Cadiz took extensive leaves for illness and sought medical treatment 43 times. He finally resigned from his job toward the end of 2008.

Procedural history: Cadiz filed a workers' compensation claim for injury-by-disease in September 2010. He asserted that he had been sickened by his exposure to pervasive mold in his work environment over a four-year period. Cadiz supported his claim with laboratory evidence of elevated levels of dangerous mycotoxins in his body. Mycotoxins are toxins generated by molds or fungi. In November 2011, Cadiz filed an amended claim that again asserted an injury from exposure to mold, but he added more symptoms. QSI had two physicians and one psychologist examine Cadiz. Dr. Ajit Arora opined that Cadiz’s symptoms could be "explained by chronic anxiety and panic disorder" through the mechanism of "hyperventilation." Dr. Leonard Cupo similarly stated that Cadiz’s symptoms were “not caused, aggravated or accelerated by (his) job activities.” Dr. Roger Likewise said Cadiz suffered from "hypochondriacal preoccupations" and that his symptoms were psychosomatic. The director of labor and industrial relations found that Cadiz’s claimed injury was not caused by workplace exposure to mold. Cadiz appealed. The Labor and Industrial Relations Appeals Board found that the reports from the three doctors were sufficient to rebut the presumption that Cadiz’s condition was work-related. Under Hawaii law, a claim is presumed to be for a covered work injury unless there is substantial evidence to the contrary. The board made no findings on what exactly it found persuasive in the evidence provided by Cupo, Likewise and Arora, but it credited their opinions and concluded that Cadiz did not sustain a personal injury arising out of and in the course of employment. The director later held a hearing on Cadiz’s amended claim and found it was an attempt to circumvent the prior decision for the same injury. The director then denied the claim. The LIRAB also said it had addressed the compensability of Cadiz’s condition in the proceedings related to the September 2010 claim. Cadiz appealed both decisions. The Intermediate Court of Appeals consolidated the appeals and affirmed the LIRAB’s conclusion that Cadiz had not sustained an injury arising out of and in the course of employment.

Analysis: The Hawaii Supreme Court explained that the state workers' compensation presumption “places a heavy burden on the employer to disprove that an injury is work-related.” The court said the substantial evidence sufficient to overcome the presumption of compensability “must disprove the causal relation of the injury-by-disease to the conditions and incidents of claimant's employment, and not merely suggest plausible alternative explanations.” The court said the three IME reports did not meet the burden of showing that Cadiz's injury-by-disease was not work-related. First of all, the court said, the reports arrived at mutually inconsistent results. For example, the court said, Cupo's assumption that allergy to mold was the only possible mechanism by which ill-health is related to environmental mold was contradicted by parts of Arora's report. Likewise said there was no medical explanation for Cadiz’s symptoms, but Cupo said his chronic allergic rhinosinusitis and chronic gastroesophageal reflux disease had been definitively established. Secondly, the court said, the IME reports failed to address the laboratory tests that objectively proved the elevated presence of harmful mycotoxins in Cadiz's body. Given the verified presence of harmful mycotoxins, the dramatically increased frequency of his need for medical treatment and the moldy conditions of the meat department, the court said Cadiz's claimed injury-by-disease reasonably appears to be work-connected and, therefore, compensable. The court further said that a plausible alternative medical explanation, without more, does not disprove that an injury is work-related. "Medically plausibly explainable by other medical conditions" is neither the relevant medical nor legal standard in the context of workers' compensation, and the ICA erred by considering testimony resting on that standard to constitute substantial rebuttal evidence.

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