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There are precious few reported decisions dealing with the jurisdictional requirements for bringing a claim petition in New Jersey when a New Jersey resident is employed out of state, is injured working out of state and is hired out of state.  In the reported case of Marconi v. United Airlines, A-0110-18T4 (App. Div. July 22, 2019), the Appellate Division affirmed the dismissal of two claims against United Airlines for lack of jurisdiction in just this situation. The case was successfully handled at both the division and appellate levels by Prudence Higbee, Esq., a partner with Capehart Scatchard.

The facts in the case were not disputed.  Richard Marconi lived in New Jersey and
suffered a work injury to his left hip on January 31, 2015 working for United
Airlines in Philadelphia.  United paid
full benefits to Marconi under Pennsylvania law, but eventually Marconi brought
two claim petitions in New Jersey seeking permanency benefits that were not
available in Pennsylvania.  One claim
petition was for the accident in 2015 and the other was an occupational claim
alleging work exposures from 1988 to the present.  Mr. Marconi admitted he was not hired in New
Jersey and worked most of his career in Philadelphia with only a brief period
of employment at Dulles Airport. 

United moved to dismiss both claim petitions for lack of jurisdiction in New Jersey.  Marconi tried to build up his contacts with New Jersey as much as he could.  He argued that his supervisor reported to a United employee at Newark’s Liberty International Airport.  Marconi also contended that he himself would telephone United staff at Liberty International Airport once every couple of months for technical advice.  He received training all over the world, including in Newark.  He would fly from Newark whenever United assigned him to do “field service.” Marconi’s supervisor sometimes would drive to Liberty International Airport to retrieve parts there.  United argued that these contacts with New Jersey were truly minimal.

The Judge of Compensation reviewed Professor Larson’s
treatise on grounds for jurisdiction:

1. Place where the injury occurred;
2. Place of making the contract;
3. Place where the employment relation exists or is
   carried out;
4. Place where the industry is localized;
5. Place where the employee resides; or
6. Place whose statute the parties expressly
   adopted by contract.

The Judge of Compensation dismissed both claims, finding
that residence in New Jersey alone has never been sufficient for jurisdiction.
The Appellate Division emphatically agreed: “We conclude that residency alone is an insufficient basis to confer
jurisdiction on the Division for extra-territorial workplace injuries.”

Petitioner argued on appeal that even if residency alone was insufficient, the fourth factor, namely “place where the industry is localized,” should have been sufficient for jurisdiction in conjunction with petitioner’s residency in New Jersey.   There are only one or two published cases that have ever discussed the concept of “localization” of an industry, and Marconi provides the most complete analysis to date, citing cases from around the nation on this concept.

First the Court said that “in no state workers’ compensation
scheme was localization alone sufficient to confer jurisdiction.”  Professor Larson explained the rationale for
localization of an industry as a criterion for jurisdiction:  “The
state in which the employer’s business is localized has a relevant interest in
a compensable injury . . . since the obligation side of the compensation
relation is as much a part of that relation as the benefit side, and since the
burden of payment would ordinarily fall most directly on the employer and
community where the industry is centered.” The Court seemed to accept
Marconi’s argument that New Jersey was a place where United’s industry was
localized, but it still rejected jurisdiction. 
That was the most interesting aspect of the case.

The Appellate Division in Marconi analyzed the concept of localization in terms of advancement of company interests. “It is the nature and frequency of the employee’s relationship with the localized presence of the employer that lends weight to the fourth Larson factor.  In other words, in this case, did Marconi’s ‘duties to a substantial extent . . . implement the localized business’ of United in New Jersey?” (citations omitted).   The Court answered its own question in the negative. “Essentially, nothing in the course of Marconi’s two-decade employment with United advanced the company’s localized interests in New Jersey.  In these circumstances, although United maintained a localized business interest in Newark, New Jersey has no substantial interest in exercising its jurisdiction over the petitions.” 

The Court explained that Marconi’s contacts with Liberty
International were mainly to advance Marconi’s ability to perform his work in
Philadelphia.  “Even when Marconi used United’s facilities at Liberty International
Airport, it was to serve United’s interest elsewhere around the country.”

After disposing of the traumatic claim petition for lack of jurisdiction, the Court then dealt briefly with the occupational claim petition, reminding practitioners that there is a different standard for jurisdiction in occupational claims from traumatic claims.  The Court cited Williams v. Port Authority of New York & New Jersey, 175 N.J. 82 (2003) to make this point clear:  “The petitioner must demonstrate either that (1) there was a period of work exposure in this State that was not insubstantial under the totality of circumstances and given the nature of the injury; (2) the period of exposure was not substantial but the materials were highly toxic; or (3) the disease for which compensation is sought was obvious or disclosed ‘by medical examination, work incapacity, or manifest loss of physical function’ while working in New Jersey.” Obviously petitioner could not meet this test because there was no work exposure in New Jersey.

In the opinion of this practitioner, the Marconi decision provides the most thorough analysis to date of the fourth criterion cited by Professor Larson in his treatise, namely “localization of business.”  The Court flatly concludes that “localization of business” alone is insufficient for New Jersey jurisdiction.  The implications of this statement are significant because there are hundreds of cases pending in New Jersey now involving medical claim petitions where the injured worker lives in New York, is hired in New York, and works in New York.  The only connection to New Jersey in many of these claims is that a medical procedure occurred in New Jersey.  Medical providers have filed countless claims of this nature seeking jurisdiction in New Jersey to argue that the New York fee schedule should not apply and ultimately seeking the right to additional reimbursements.  The Appellate Division has yet to weigh in on these cases.  When one of these MCP cases finally reaches the Appellate Division, one can expect that the analysis in Marconi will certainly be considered.

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Petitioner Joan Haggerty worked for Cape May Regional Medical Center (Crothall Service Group).  She tore her left rotator cuff and bicep tendon while working as a housekeeper.  Months later she injured her neck and left shoulder making a bed and stretching sheets.  She filed a workers’ compensation claim for each injury and later amended the left shoulder claim to include an overuse claim of the right shoulder. She had two surgeries on the left shoulder and one surgery on the right shoulder.

Petitioner obtained an order for medical and temporary
disability benefits in 2015 approving treatment with Dr. Matthew Pepe.  He referred petitioner to Dr. Peter Corda for
pain management, who in turn referred petitioner to Dr. Charles Krome. Four
platelet rich plasma injections were recommended by Dr. Krome.

The issue in the case arose when it became clear that the
platelet rich injections did not help petitioner.  Dr. Krome then recommended stem cell treatment for the right
shoulder.  He felt that this would be a
conservative measure but petitioner would still likely require total shoulder
replacement surgery in a few years. 
Petitioner then filed an amended motion to compel respondent to pay for
the stem cell therapy.  Respondent
opposed the motion by noting that the stem cell treatment was not approved by
the U.S. Food and Drug Administration (FDA). 

Because the judge had questions for Dr. Krome, the judge
called the doctor from his chambers on May 4, 2018 in the presence of both
counsel.  The judge asked several
questions, but neither counsel asked any. 
At the next listing of the case on May 25, 2018, petitioner testified
that she did not want another shoulder surgery. 
She needed to work in order to care for her terminally ill husband.  She said she knew that the stem cell therapy
was not FDA approved but she wanted to undergo it. She said she was also aware
that it might only provide temporary relief.

Following petitioner’s testimony, the Judge of Compensation
issued an order requiring respondent to provide the stem cell treatment.  The judge commented that Dr. Corda wrote a
letter stating that this treatment was widely used in professional sports.  The judge also observed that respondent did
not provide any expert report addressing this issue.  Finally, the judge found Dr. Krome to be
credible.

On appeal Crothall argued that it was error to determine
credibility of a physician based on an unrecorded phone call without formal
testimony.  Crothall also argued that the
treatment was not sufficiently accepted in the scientific community.

The Appellate Division observed the rules on motions for
medical and temporary disability benefits, noting that respondent’s counsel had
raised a defense that the treatment was not FDA approved.  “Under
the regulations, the judge was required to hold a hearing where Crothall could
cross-examine witnesses.”

The Court also questioned the validity of using a phone call
to a physician as a basis to determine credibility. “Even if credibility could be determined in that manner, without a
record there is no ability to review what was said.” The Court said that
when an important issue is discussed in chambers, “a record must be made or a summary placed on the record of what
transpired in chambers.”

The Appellate Division held that the procedures in chambers “lacked fundamental due process.”  The Court was critical of the failure to record the testimony of Dr. Krome and the failure to allow respondent’s counsel to cross examine the doctor.  For these reasons the order was reversed, and the matter was remanded.

The case can be found at Haggerty v. Crothall Service Group, A-4478-17T4 (App. Div. May 3, 2019).  This case reminds us that due process applies to proceedings in workers’ compensation court and that fundamental fairness to both parties is the lodestar of court proceedings.  The Appellate Division never ruled on whether stem cell treatment can be ordered but rather focused solely on the fairness of the process in the Division proceedings.

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Vinno Verasawmi was the sole proprietor of VKR, which
manufactured custom kitchen cabinets for residential and commercial
customers.  The company had two other
employees. Verasawmi would visit construction sites and meet customers in the
ordinary course of business. He drove a Porsche Cayenne, registered in his own
name, both for personal and business use. 
He testified that he bought the Porsche to impress potential customers.

On April 24, 2012, Verasawmi left his house at 6:45 a.m. to
go to his shop in Middlesex, N.J.  Then
he proceeded to a construction site in Peapack, N.J. where he installed kitchen
cabinets.  He also picked up
architectural drawings and started driving back to the shop.  It was then that he noticed a red warning
light on the dashboard of his car, indicating a need for service. 

Verasawmi drove to the shop, dropped off the drawings, and then proceeded to drive to an auto dealership in Edison, N.J. arriving at 10:00 a.m. He left the vehicle at the dealership and rented a replacement vehicle.  Subsequently he drove from the dealership in the replacement vehicle back to his shop in Middlesex.  On the way to the shop he was involved in an accident with a tractor-trailer.  He filed a claim petition alleging serious injuries that prevented him from operating his business. He also filed a third party suit.

Verasawmi argued that as the employer, he directed himself
to take the Porsche to the dealership for servicing.  He contended that this trip and the return
trip to the office were compensable because his employer directed him to make
the trips. 

The Judge of Compensation ruled that petitioner was not in the course of his employment at the time of his accident.  The Judge held that the maintenance on his vehicle did not constitute a benefit to his employer.  The Judge also commented that Verasawmi initially claimed he was on the way to a job site when the accident occurred, but in the law suit against the operator of the tractor-trailer he conceded he had been returning to his shop when the accident transpired.  In the end, the Judge of Compensation found that petitioner’s actions were entirely personal in nature, and he would have had to get the vehicle repaired regardless of whether he was working for VKR or not.

On appeal Verasawmi argued that the use of the vehicle
redounded to his employer’s benefit.  He
maintained that since he owned VKR, and since he was an employee of the
company, he had the sole discretion to decide whether he was engaged in his job
duties at the time of the accident. 

The Appellate Division affirmed the dismissal of Verasawmi’s claim.  It noted that the car was registered in Verasawmi’s own name, and he used it for both personal and business reasons. Further, he was returning to his shop, not to a construction site.  The Court said, “… Verasawmi was on a personal errand that he would have had to undertake regardless of whether he was working for VKR.  His action, which involved traveling from Middlesex to Edison and back, was not a minor deviation from any prescribed work duties.” This case is instructive because there are not many New Jersey cases involving the often heard contention that a sole proprietor has complete discretion in determining what is and what is not work related.  Clearly, if one’s boss requires an employee to perform a certain activity, like dropping off a car for repairs, that drive would be work related.  In this ruling the Court rejected the argument of the sole proprietor that he directed himself to perform what he contended later was a work mission.  The Court did not reject the concept of dual capacity, namely that the sole proprietor is both employer and employee, but it rejected the claim because the facts suggested that the vehicle was used for personal reasons and the work being done on the vehicle was fairly routine maintenance. The outcome might have been different if the petitioner had been driving to a construction site instead of returning to his office. The case can be found at Verasawmi v. Vino’s Kitchen Renovations, LLC, A-2273-17T3 (App. Div. April 23, 2019).

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David Rollins worked for Amtrak for 23 years until August 2015 as a supervisor in North Brunswick, N.J. overseeing 20 employees performing track maintenance.  His normal supervisor went on vacation, and Rollins experienced tension and stress with his temporary supervisor, Josh Newbold.  Rollins reported to another supervisor, Semliatschenko, his concerns about safety due to what he perceived as insufficient coordination with Newbold.  A meeting among all three was arranged on March 12, 2015 in which there was a heated argument.  Semliatschenko left the room for a few minutes during which Newbold later  claimed that Rollins threatened him with bodily harm.  Newbold did not report the alleged threat for six weeks.

On April 23, 2015, Rollins placed a call to ‘Operation RedBlock,” an employee assistance program helpline.  He said he was dealing with work and family stress issues.  At his duty station that night, Rollins was approached by Amtrak Police and paramedics from the local hospital asking him whether he was contemplating suicide.  Rollins denied suicidal thoughts and admitted simply work and family stress.  He noted his son was dealing with cancer treatment. He was taken to a local hospital and later released.  The hospital determined Rollins did not have suicidal thoughts and was not a danger to the railroad.  He was placed on medical leave pending clearance to return to work.

When he came to work the next day, Newbold found out about the incident the night before involving Rollins, and Newbold became concerned about Rollins’ emotional stability.  Newbold said that he was fearful about the threat that Rollins allegedly made on March 12, 2015, and he then reported the alleged threat for the first time.  He said that Rollins threatened to “come down to Levittown and slide one in me.”

Rollins was cleared to return to work in July 2015.  However, an investigation with a neutral hearing officer ensued at this point over the alleged threat against Newbold.  That led to a hearing on August 10, 2015.  In the hearing Newbold explained that he did not report the threat for the first six weeks because he did not think Rollins had been serious about harming him initially.  He said he became concerned about Rollins’ emotional stability when he came to work on April 24, 2015 and found out about the hospital visit.   The hearing officer recommended termination of Rollins’ employment in part for a violation of the Amtrak Workplace Anti-Violence Policy.  Rollins made multiple appeals without success and then filed a civil suit alleging violations of the New Jersey Law Against Discrimination.

In his suit Rollins argued that Amtrak discriminated against him on the basis of a perceived disability.  He contended that Amtrak perceived him as having a mental disability on account of his call to operation RedBlock and his discussion with a counsellor who alerted Amtrak Police.  He further argued that his firing was based on a pretext that he had engaged in an act of violence at his workplace.

Amtrak moved to dismiss the case.  Its management denied having any discriminatory animus against Rollins and conceded only that one co-employee, Newbold, could have had any discriminatory animus against him.

The federal court rejected the motion for summary judgment filed by Amtrak:  “Based on the facts provided by the parties, one can plausibly argue that Newbold and Amtrak management were motivated by discriminatory animus.  Defendant received Newbold’s complaint for an alleged threat that occurred weeks prior thereto, the morning after Plaintiff’s call to Operation RedBlock.  A jury may determine that the request for psychological services was the motivation to seek Rollins’ dismissal.”

Timing was the problem Amtrak faced in winning its motion for summary judgment.  The alleged threat by Rollins against Newbold occurred on March 12, 2015 but was not reported until the day after Rollins was taken to a hospital and found to have no suicidal thoughts, some six weeks later.  The report of the alleged threat then led directly to the termination of Rollins.  In the end the Court believed Rollins had made out a sufficient case to allow a jury trial on whether Amtrak wrongfully perceived him as having a mental disability and discriminated against him on that basis.  The case can be found at Rollins v. National Railroad Passenger Corp., 2018 A.D. Cases 336982 (D.N.J. September 18, 2018).

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