Allen & Gooch Blog

Workers' Compensation

Terminating Workers’ Compensation Benefits: The Arbitrary and Capricious Standard


The Louisiana Third Circuit Court of Appeal recently ruled on the case entitled Martin v. Doerle Food Services, LLC, 2021-94 (La. App. 3 Cir. 6/2/21), 2021 WL 2217087, which discusses the arbitrary and capricious standard.

In the Martin case, the plaintiff, Mr. Martin, argued that his employer, Doerle Food Services, was arbitrary and capricious after it terminated his benefits. Prior to the termination, an Independent Medical Examiner (IME), Dr. Lindemann, concluded that Mr. Martin no longer needed further medical treatment and could return to work. Doerle Food Services relied on this report when it terminated Mr. Martin’s benefits.

A plaintiff must prove that an employer acted arbitrary and capricious when terminating benefits to prevail on a dispute for penalties and attorney’s fees under LSA-R.S.23:1201(I). A finding is arbitrary if it is not supported by logic or the necessary facts, and a rule is capricious if it is implemented without thought or reason.

In the Martin case, the Court explained that Dr. Lindemann conducted a complete physical examination on Mr. Martin. Furthermore, Dr. Lindemann did not solely rely on Mr. Martin’s prior medical records. The Court explained that an employee must not be cut off from benefits based on inconclusive or inconsistent medical reports; however, in Mr. Martin’s case, Dr. Lindemann’s reports had no inconsistencies, and Dr. Lindemann was certain Mr. Martin could return to work.

The Court held that the employer’s reliance on the IME report was objectively supported and did not rise to the level of being arbitrary and/or capricious. Thus, this case furthers the argument that the reliance upon a sound and well supported IME report can be used to overcome the argument that termination of benefits was arbitrary and capricious. This should also apply to the Second Medical Opinion, but this argument is not as strong as relying upon an IME.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.