Labor & Employment Law Daily Employer must reimburse injured construction worker’s ongoing medical marijuana expenses
Friday, April 16, 2021

Employer must reimburse injured construction worker’s ongoing medical marijuana expenses

By Kathleen Kapusta, J.D.

The employee, said the court, presented sufficient credible evidence that the prescribed medical marijuana was, as to him, reasonable and necessary treatment under the state’s workers’ compensation act.

Medical marijuana may constitute reasonable and necessary care under New Jersey’s workers’ compensation scheme, the state high court stated, finding an employee injured in a workplace accident presented sufficient medical evidence to a workers’ compensation court to establish that the medical marijuana prescribed for his pain represented reasonable and necessary treatment under the state’s Workers’ Compensation Act (WCA). Thus, his construction company employer was required to reimburse him for his medical marijuana costs. The New Jersey Supreme Court also found that the employer did not fit within a limited reimbursement exception in the state’s Compassionate Use Act, and as applied to the order of the workers’ compensation court, the Compassionate Use Act was not preempted by the federal Controlled Substances Act (Hager v. M&K Construction, April 13, 2021, Solomon, L.).

Injury. While working in 2001 as a laborer for a construction company, the employee suffered a serious back injury. Although he underwent a laminectomy and decompression of nerve roots in his back, as well a two-level lumbar fusion, his pain persisted and, as a result, he took prescribed opioid medication.

Medical marijuana prescription. In 2016, his hospice and palliative care physician enrolled him in the state’s medical marijuana program to treat his pain and to wean him off of opioids. He was ultimately prescribed two ounces per month, the maximum allowable prescription, which cost him more than $600 per month.

Procedural history. Although he had petitioned for workers’ comp benefits in 2002, not until November 2016 did the company stipulate that he was in its employ and had suffered a work-related injury. A workers’ comp trial began in 2016 and continued until March 2018. After hearing competing medical testimony, the workers’ comp court, identifying medical marijuana and opioids as the only choices for pain management, concluded that “marijuana is the clearly indicated option,” and ordered the employer to reimburse the costs of the employee’s medical marijuana and related expenses. Affirming, a state appeals court found that New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act (Compassionate Use Act) was not preempted by the federal Controlled Substances Act (CSA) and compliance with both laws was possible.

Not exempt. On appeal, the state high court first addressed the employer’s assertion it was exempt from reimbursing the employee under a provision of the Compassionate Use Act stating in relevant part that “[n]othing in [the Act] shall be construed to require a government medical assistance program or private health insurer to reimburse a person for costs associated with the medical use of cannabis.” Reading the “or” in the provision as limiting the applicability of the exception only to government medical assistance programs and private health insurers, the court found this supported by the definition of health insurance in the Life and Health Insurance Code, which unambiguously states that health insurance does not include workers’ compensation coverages. Because the legislature did not intend for workers’ compensation insurers to be treated as private health insurers or government medical assistance programs under the Compassionate Use Act, the employer was not exempt from its reimbursement obligation.

Reasonable and necessary. Turning to the employer’s contention that medical marijuana is not a “reasonable and necessary treatment” for which the WCA provides coverage, the court noted that while the WCA is remedial in nature and is to be liberally construed, the treatment and services sought must “be shown by competent medical testimony to be such as are reasonable and necessary” for the particular worker. Further, palliative care may be authorized under the WCA, and competent medical testimony that a particular treatment or service will reduce symptoms or restore function satisfies the requirement of reasonable and necessary care.

In concluding that medical marijuana may be found, subject to competent medical testimony, to be reasonable and necessary care under New Jersey’s workers compensation scheme, the court noted that the compensation court, persuaded by the employee’s doctors, found he remained in chronic pain, ongoing treatment was necessary, and that medical marijuana was the preferred treatment option over opioids—as it could both provide pain relief and help the employee conquer his opioid addition. Thus, said the court, competent evidence relating to medical marijuana’s ability to relieve symptoms such as chronic pain and discomfort was sufficient to find such a course of treatment appropriate.

Potential harm. Further, the court recognized the potential harm that might be inflicted on the employee by opioid treatment, which the compensation court noted placed him on a “likely path . . . [of] worsening addiction and ultimately death.” Agreeing with both lower courts that “exempting workers’ compensation insurance carriers from responsibility for workers’ medical marijuana courts would be antithetical to the legislature’s express findings in the Compassionate Use Act and the traditional broad, liberal application of New Jersey’s application scheme,” the court found competent medical evidence supported the compensation court’s order and the company was obliged to compensate the employee.

CSA. Considering next whether the CSA extinguished the employer’s obligations under state law, the court reasoned that the state’s marijuana laws were undergoing a “tectonic shift.” Citizens voted in 2022 to legalize recreational marijuana through a constitutional amendment by a two-to-one margin, and new state legislation, among other things, prohibits state law enforcement from cooperating with federal authorities in enforcing the CSA. Nonetheless, the court pointed out, under the Supremacy Clause of the U.S. Constitution, state laws that interfere with or are contrary to federal laws are invalid.

Conflict preemption. As to whether conflict preemption applied here, the court noted that the CSA separates controlled substances into five schedules based on their accepted medical uses, risk of abuse, and physical and psychological effects. At the time of the CSA’s enactment, marijuana was placed on the strictest schedule—Schedule I—where it remains today. For purposes of the CSA, marijuana has no currently acceptable medical use and cannot be validly prescribed.

Appropriations riders. On the enforcement front, however, not only has the Executive Branch, through guidance from senior personnel in the Department of Justice over the years, muddied the waters between state marijuana laws and federal enforcement, “Congress has deprioritized prosecution for possession of medical marijuana while leaving the CSA otherwise unchanged,” s tressed the court. Specifically, it pointed out, in the relevant rider to the most recent federal Appropriations Act, Congress prohibited the DOJ from using allocated funds to prevent states from implementing their medical marijuana laws. Similar language, the court observed, has been included in appropriations riders dating back to the 2015 federal budget.

Byrne. Noting the tension between the appropriations riders and the CSA’s classification and criminalization of medical marijuana, the court turned to guidance from the Supreme Court and several circuit courts. Those federal decisions, it found, mirrored its own reading of appropriations acts “as signifiers of legislative intent to suspend earlier statutory enactments.” Specifically, in City of Camden v. Byrne, the court read the appropriations acts as the manifested intent of the Legislature to give no effect at all to the earlier statutes, stating that “[t]he earlier statutes [could not] coexist with the enacted appropriation and, consequently, must be deemed [to have been] suspended by adoption of the later appropriation acts.”

In addition, the Byrne court noted the limited applicability of appropriation laws as confined to a particular fiscal year, concluding that their effect on the previously enacted statutes was best expressed as implied suspension as opposed to implied repeal.

Relying on federal case law and Byrne to help it decipher congressional intent, the court found that it was possible for the employer here to abide by both the CSA and the Compassionate Use Act at the present time. In other words, the CSA “does not currently create an obstacle to the accomplishment of congressional objectives,” and thus the Compassionate Use Act was not preempted by the CSA as applied to the compensation court’s order.

Effectively suspended. Concluding that the CSA, as applied to the Compassionate Use Act and the compensation court’s order, is effectively suspended by the most recent appropriations rider for at least the duration of the federal fiscal year, the court found that 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.

Conflict with other state courts. The court acknowledged that its decision “departs from the holdings of other state supreme courts that have come to different conclusions when faced with the precise issue before us—whether state medical marijuana laws are preempted as applied to workers’ compensation orders compelling employers to reimburse workers’ medical marijuana costs.” Nonetheless, it found its decision “consonant with our reading of the relevant federal authorities and our settled principles of preemption analysis and deciphering legislative intent.”

Aiding and abetting. Turning to the employer’s contention that its compliance with the compensation court’s order would subject it to aiding-and-abetting liability because it would be assisting in the employee’s possession of marijuana, the court disagreed. “To aid and abet a crime, a defendant must not just ‘in some sort associate himself with the venture,’ but also ‘participate in it as in something that he wishes to bring about’ and ‘seek by his action to make it succeed,’” reiterated the court. And here, the company made it clear it did not wish to participate in the employee’s possession of marijuana and “has gone to great pains to avoid facilitating an offense.” Similarly, the court observed, reimbursing the employee under court mandate could hardly be interpreted as electing to aid in the employee’s possession of marijuana in violation of federal law.

Nor was company able to show how its compliance with the compensation court’s mandated reimbursement payments exhibited a specific intent to aid and abet the employee’s marijuana possession. “M&K’s position that it faces aiding-and-abetting liability because it will reimburse Hager while knowing what the funds will be used for does not persuade us that it satisfies the specific intent requirement when the facts so clearly indicate that it will be doing so against its will and at the behest of this Court.” Its argument that compliance with the order placed it at risk of conspiracy liability failed for similar reasons.

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