Supreme Court Holds That Exclusion of Expert Reports Was Within the Discretion of the Workers' Compensation Commissioner

 Hagen v. Serta/National Beddikng, LLC, No. 22-0684 (Iowa Feb. 5, 2024)

Claimant failed to timely certify her expert witnesses and also failed to produce the reports of the experts at least thirty days before hearing.  The deputy found that the acceptance of the reports would be unduly prejudicial to the employer and excluded the reports.  The commissioner affirmed this decision, but the district court reversed that decision.  The Court of Appeals affirmed the decision of the district court on appeal and the Supreme Court accepted the case for further review.

Under rule 876 IAC 4.19(3), claimant was required to certify experts within 120 days of hearing.  The rule also provides that reports from experts were to be provided within 30 days of hearing.  The rules note that evidence may be excluded "if the objecting party shows that receipt of the evidence would be unfairly prejudicial."  Hearing in the case was set for September 25, 2020.

Although claimant was originally to have an IME on May 19, the IME was rescheduled to June 23 due to illness of the medical examiner.  A vocational expert was certified by the claimant for the first time on August 19.  Both the reports were completed on September 10, with the IME served on the employer on September 10 and the vocational report on September 11, both within 30 days of hearing.  A week before the hearing, the employer objected to both reports, arguing that the experts had not been identified in a timely manner and that the reports were untimely.  The employer argued that both reports were prejudicial and further arguing that they did not have time to respond or rebut either the IME or the vocational report.  At hearing, claimant argued that defendants should be given additional time to respond to the reports which would cure any prejudice that existed.  The deputy excluded the reports, finding that allowing the record to remain open would only "delay final disposition of the matter."

In its decision reversing the agency decision, the district court found that the agency presumed that the late reports were prejudicial without engaging in an analysis of whether unfair prejudice actually existed.  That, according to the court, was an abuse of discretion.  The Court of Appeals affirmed, with one judge indicating in dissent that the majority opinion might be used "as a map to ignore deadlines and navigate around the rules.

The Supreme Court noted that abuse of discretion was synonymous with "unreasonableness and involves lack of rationality, focusing on whether the agency has made a decision clearly against reason and evidence." The Court found that the agency should be given deference in administering its rules.  It rejected the district court's opinion that the agency had assumed prejudice by noting that the commissioner had specifically found that the reports had been filed in an untimely manner, that only the VE had concluded claimant was permanently and totally disabled and that there was "unfair surprise and prejudice by the untimely exchange of these reports." Further, the commissioner had noted that the reports were not from treating physicians but from hired experts.  The Supreme Court found that the prejudice resulting from an untimely designation need not be great to justify exclusion of the testimony. Although the commissioner could have exercised his discretion by allowing the employer to respond, the exclusion of the testimony was not outside of that discretion.  Historically, according to the Court, they had been reluctant to reverse the sanction of exclusion for noncompliance with the rules and nothing in the decision of the commissioner led the court to believe that he had abused his discretion.  The decision of the Court of Appeals was reversed and the commissioner's decision was affirmed.