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Defendants in Baksalary file motion to vacate consent decree

On June 19, the class defendants in the case of Baksalary v. Smith filed a motion in U.S. District Court (E.D. Pa.) to vacate the consent decree decision pursuant to Federal Rule of Civil Procedure 60(b)(5). PaTLA�s Amicus Curiae Committee is now participating in the case in opposition to the motion to vacate the consent decree. According to Dale Larrimore, chair of PaTLA�s Amicus Curiae Committee and partner in the Philadelphia firm Deutsch, Larrimore, Farnish & Andersson, the committee voted overwhelmingly to participate in this case. Amicus member Lawrence Chaban, of Yablonski, Costello & Leckie in Washington, is writing the amicus brief on behalf of PaTLA. �Baksalary was a tremendously important decision for the workers of Pennsylvania,� said Larrimore. �It has had an important salutary effect on workers comp benefits for disabled workers. This consent decree may have been one of the most significant decisions in the history of the Workers� Compensation Act in Pennsylvania and there was no question that the Amicus Curiae committee would file a brief in opposition to this motion to vacate.�

The case of Baksalary is significant because of its consent decree that stopped workers� compensation insurers from using Section 413(a) of the Workers� Compensation Act to automatically terminate an injured worker�s indemnity benefits without a hearing, according to PaTLA Amicus Committee member Samuel H. Pond, a partner in the Philadelphia firm of Martin, Banks, Pond, Lehocky & Wilson. Pond said that the Baksalary consent decree changed the landscape from where the employer had unilateral control to stop benefits to one where the employer had the responsibility to prove that the injured worker�s benefits should be terminated, suspended, or modified. �At our core, PaTLA is about allowing injured individuals to have access to a courtroom where a jury of their peers or a fact-finder can hear all of the evidence and then make a reasoned decision,� Pond said. 

In their motion to vacate, the defendants said the consent decree has been superceded by the U.S. Supreme Court�s decision in American Mfrs. Mut. Ins. Co. v. Sullivan and a Third Circuit case, Kreschollek v. Southern Stevedoring Co. The U.S. Supreme Court�s decision in Sullivan addressed the utilization review procedure of the Workers� Compensation Act as amended and the automatic stoppage of medical care as a result of the filing of a notice of utilization review. The Court held that private insurers were not state actors when they withheld payment for disputed medical benefits prior to a utilization review determination. In Kreschollek, the court ruled that the employers were not federal actors, thus allowing longshoremen�s benefits to be stopped without a hearing.

Six named plaintiffs whose workers� compensation benefits had been terminated under Section 413(a)�s �automatic supersedeas� provision brought the Baksalary action in 1976. Plaintiffs sued the state officials charged with the enforcement of the Act, as well as three insurance carriers, a self-insured employer, and the statutorily created State Workmen�s Compensation Insurance Fund (SWIF). The plaintiffs argued that Section 413(a) deprived them of due process by allowing an employer to unilaterally terminate payment of benefits without a hearing. The litigation was eventually resolved by the consent decree, which was entered on July 30, 2023 between the parties. The consent decree stopped insurers or employers from using Section 413(a) of the Act to automatically stop an injured worker�s benefits without a hearing.


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