The issue here is whether apportionment of workers' compensation benefits pursuant to A.R.S. § 23-901.05 is appropriate where disability results from superimposition of an occupational disease upon a nonoccupational preexisting condition that did not, by itself, adversely affect claimant's ability to perform his regular employment. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and A.R.S. § 12-120.24.
On April 5, 1986, William Steele ("claimant") fainted after becoming ill at work. He was a custodial worker who had cleaned up flour and dough at the central bakery of Fry's Food Stores ("Fry's") since 1979. Fry's, which is self-insured, initially accepted the claim for compensation. In September 1986, however, it terminated claimant's benefits, asserting that he had no permanent impairment. Claimant contested this determination.
The central issue in the subsequent hearing was whether claimant's severe respiratory problems were caused by his two-pack-a-day, thirty-seven year smoking habit, which resulted in chronic obstructive pulmonary disease, or by his seven-year exposure to flour at the workplace, which resulted in a condition known as "baker's lung." The administrative law judge ("ALJ") found that claimant's physical condition was caused by a combination of both, and entered an award for an unscheduled permanent partial disability pending a determination of his lost earning capacity. Fry's contested this finding of causation. The court of appeals set aside the award as unsupported by the evidence. We
The Industrial Commission thereafter determined that claimant suffered a complete loss of earning capacity and awarded him benefits for a permanent total disability. It amended the amount of those benefits, however, based on a finding that only fifteen percent of claimant's impairment was attributable to baker's lung. This "apportionment" resulted in a reduced award of $132.51 per month. Both claimant and Fry's requested a hearing, with claimant contesting the apportionment and Fry's contesting the finding of total disability.
Claimant conceded that baker's lung was responsible for only fifteen percent of his respiratory impairment. He argued, however, that this condition was the "proverbial last straw" that resulted in his disability. The ALJ agreed, affirmed the award for permanent total disability, and refused to apply the apportionment statute. He concluded there was no evidence showing that claimant's smoking habit had adversely affected his earning capacity prior to the time he contracted the occupational disease.
After the decision was affirmed on administrative review, Fry's brought a special action in the court of appeals asserting that the term "disability" in A.R.S. § 23-901.05 refers to any "physical or medical disability" and that the ALJ erred in interpreting it to mean "earning capacity disability." The court of appeals agreed and set aside that part of the award denying apportionment. Fry's Food Stores v. Industrial Commission, 173 Ariz. 578, 845 P.2d 504 (Ct.App. 1992). We granted review. In a separate special action brought by claimant, we ordered the carrier to pay benefits in accordance with the ALJ's order pending our decision here. Claimant subsequently died, and Fry's filed a petition to dismiss this matter as moot.
Unlike federal courts, we have no constitutional "case or controversy" requirement. Fraternal Order of Police Lodge v. Phoenix Emp. Rel. Bd., 133 Ariz. 126, 127, 650 P.2d 428, 429 (1982). Nevertheless, this court has consistently said it will not hear issues that become moot. Id. We make exceptions to this self-imposed judicial restraint, however, when issues have significant public importance or are likely to recur. Id.; Camerena v. Dept. of Pub. Welfare, 106 Ariz. 30, 31, 470 P.2d 111, 112 (1970). The case before us raises such concerns. Although A.R.S. § 23-901.05 has generated little controversy in the past, every occupational disease case potentially presents "apportionment" issues as that term has now been construed by the court of appeals in this matter. Because we disagree with that court's reading of the statute and believe apportionment is appropriate only in limited circumstances, we deny the motion to dismiss.
Under A.R.S. § 23-901.05, apportionment is required "[w]here an occupational disease, as defined by § 23-901, paragraph 12, subdivision (c), is aggravated by any other disease or infirmity not itself compensable, or where disability or death from any other cause not itself compensable is aggravated, prolonged, accelerated or in anywise contributed to by an occupational disease...." (emphasis added).
An "impairment" is "any anatomic or functional abnormality or loss," while a "disability" occurs only when an employee's "actual or presumed ability to engage in gainful activity is reduced or absent because of `impairment' which, in turn, may or may not be combined with other factors." Id. Impairment connotes a medical or physical loss, while disability refers to a loss of earning capacity. In fact, the terms "disability" and "loss of earning capacity" are generally used interchangeably. See Alsbrooks v. Industrial Commission, 118 Ariz. 480, 484, 578 P.2d 159, 163 (1978); see also Savich v. Industrial Commission, 39 Ariz. 266, 270, 5 P.2d 779, 780 (1931); Conner Mfg., Inc. v. Industrial Commission, 172 Ariz. 251, 253, 836 P.2d 464, 466 (Ct.App. 1992); Gallardo v. Industrial Commission, 16 Ariz.App. 491, 493, 494 P.2d 391, 393 (1972); State Comp. Fund v. Cramer, 13 Ariz.App. 103, 105-06, 474 P.2d 462, 464-65 (1970); see generally Arizona Workers' Compensation Handbook, § 220.127.116.11., at 7-2 n. 4 (Ray J. Davis et al. eds., 1992) [hereinafter Handbook]. While an impairment is a prerequisite to an award for disability, Cassey v. Industrial Commission of Arizona, 152 Ariz. 280, 283, 731 P.2d 645, 648 (Ct.App. 1987); Sims v. Industrial Commission, 11 Ariz.App. 385, 386, 464 P.2d 972, 973 (1970), an employee who sustains an impairment may not necessarily suffer a disability. And, as the ALJ in this case correctly held, if a claimant has a prior impairment but no prior disability, the apportionment statute does not apply.
Claimant had a preexisting lung condition from cigarette smoking. His smoking habit, together with his exposure to flour dust, resulted in a severe respiratory impairment. It is unclear at what point this functional loss developed. Claimant acknowledges that he had breathing problems prior to 1986, but these did not prevent him from doing his job. Further, a lung x-ray performed by his family doctor in 1984 did not result in a diagnosis of pulmonary disease. Yet, tests at the time of the 1986 incident resulted in the dual diagnoses of chronic obstructive pulmonary disease and baker's lung.
It is clear, however, that claimant's disability, or loss of earning capacity, did not occur until after he was exposed to flour dust. Thus, the evidence supports the ALJ's finding that the baker's lung was "the straw that broke the camel's back." Tatman v. Provincial Homes, 94 Ariz. 165, 169, 382 P.2d 573, 576 (1963). Conversely, nothing in the record supports an assertion that claimant was or would have been disabled in the absence of the baker's lung. On these facts, then, the ALJ correctly held that the apportionment statute did not apply.
In reaching a contrary conclusion, the court of appeals relied heavily on the fact that the language of A.R.S. § 23-1044(E), the industrial injury apportionment statute, differs from that used in § 23-901.05. It concluded that this variation in language indicates a legislative intent to treat apportionment differently in occupational disease cases. We disagree.
In Ford v. Industrial Commission, we outlined the historical difference in treatment between compensation for industrial injuries and occupational diseases. 145 Ariz. 509, 512-14, 703 P.2d 453, 456-58 (1985); see also Handbook, supra, § 5.3, at 5-2 to 5-5. We concluded that while some distinct provisions for occupational diseases remain, the modern approach is to treat diseases and injuries the same. See Ford, supra; see also A.R.S. § 23-901(12)(c) (expanding the general definition of "personal injury by accident" to include occupational diseases). Although we need not address all the similarities and distinctions between occupational disease and industrial injury apportionment, we are persuaded that the term "disability" means the same thing under both statutes. The legislature specifically used the term "disability," not "impairment," in § 23-901.05, and we reject the argument that it really meant one when it said the other.
Our reading furthers one of the primary purposes of Arizona's overall scheme: to compensate employees for lost earning capacity from employment-related disabilities. Maness v. Industrial Commission, 102 Ariz. 557, 559, 434 P.2d 643, 645 (1967). This purpose applies equally to loss of earning capacity from occupational disease and industrial
The interpretation urged by Fry's and adopted by the court of appeals confuses causation and apportionment. Both industrial injuries and occupational diseases must arise "out of employment" to be compensable. Ariz. Const. art. 18, § 8; A.R.S. §§ 23-901(12)(c), 23-901.01 (occupational diseases); A.R.S. § 23-1021 (industrial injuries). Statutory causation requirements are stricter for occupational diseases than they are for industrial injuries to insure that the source of the disease "is one related to employment and not one which is part of the ordinary hazards of life to which the general public is exposed." Ford, 145 Ariz. at 518, 703 P.2d at 462; see generally 1B Arthur Larson, The Law of Workmen's Compensation, § 41.64 at 7-612 to 7-635 (1993). Even under these more rigid requirements, however, the occupational disease need not be the sole cause of the disability so long as it is a contributing cause. Ford, 145 Ariz. at 518, 703 P.2d at 462. In the present case, claimant's lung pathology was attributable to a combination of long-term cigarette smoking and inhalation of flour dust. We therefore previously determined that the evidence was sufficient to support the finding of causation. Fry's Food Stores, 161 Ariz. at 123, 776 P.2d at 801.
Apportionment is an entirely separate matter. A.R.S. § 23-901.05 requires apportionment of disabilities, not apportionment of the different causes of a single disability. According to a leading authority on workers' compensation, this distinction is critical and has created much confusion among states with apportionment statutes identical or similar to ours. 1B Larson, supra, § 41.64(d) at 7-640 ("The crucial distinction, then, is between apportioning disability and apportioning cause. The former is possible in the minority of states having apportionment statutes; the latter is never possible.").
California follows the Larson approach. In Pullman Kellogg v. Workers' Comp. App. Bd., 26 Cal.3d 450, 161 Cal.Rptr. 783, 605 P.2d 422 (1980), a case factually similar to ours, the claimant became disabled due to obstructive lung disease. The court found that claimant's pathology was caused by both his thirty-year smoking habit and his forty-year exposure to industrial dust and fumes. In rejecting application of the apportionment statute,
Fry's asserts that Larson supports its reading of the statute. We do not agree. See 1B Larson, supra, § 41.64(d), at 7-635 to 7-641. Of the cases Larson criticizes, perhaps the most notable is Jenkins v. Halstead Industries, 17 Ark.App. 197, 706 S.W.2d 191 (1986), the Arkansas case after which Fry's urges us to pattern our decision.
We reject the Jenkins approach, because it confuses causation and apportionment. As Larson notes, while Arkansas and two other states — Alabama
Like California and Michigan, we feel constrained to read our apportionment statute in a manner consistent with the long-standing principle that employers must take employees as they find them. See, e.g., Murphy v. Industrial Commission, 160 Ariz. 482, 486, 774 P.2d 221, 225 (1989); Tatman, 94 Ariz. at 168, 382 P.2d at 575; Murray v. Industrial Commission, 87 Ariz. 190, 199, 349 P.2d 627, 633 (1960); see also State Compensation Fund v. Joe, 25 Ariz.App. 361, 366, 543 P.2d 790, 795 (1975) (application of principle to occupational disease). Furthermore, this approach is consistent with our prior treatment of dual-causation cases, see e.g., Ford, 145 Ariz. 509, 703 P.2d 453; Morrison-Knudsen Co., Inc. v. Industrial Commission, 115 Ariz. 492, 566 P.2d 293 (1977); Tatman, 94 Ariz. 165, 382 P.2d 573; Revles v. Industrial Commission, 88 Ariz. 67, 352 P.2d 759 (1960); Murray, 87 Ariz. 190, 349 P.2d 627; Lee Moor Contracting Co. v. Industrial Commission, 61 Ariz. 52, 143 P.2d 888 (1943), and with the underlying purposes of the
We therefore vacate the court of appeals' decision and affirm the ALJ's award.
FELDMAN, C.J., MOELLER, V.C.J., and MARTONE, J., and WILLIAM E. DRUKE, Judge, Court of Appeals, concur.
CORCORAN, J., did not participate in the determination of this matter. Pursuant to Ariz. Const. art. 6, § 3, the Honorable WILLIAM DRUKE, Judge of the Arizona Court of Appeals, Division Two, was designated to sit in his stead.
"In case of aggravation of any disease existing prior to a compensable injury, compensation shall be allowed only for the proportion of the disability due to the aggravation of such prior disease which is reasonably attributed to the injury." Cal. [Labor] Code § 4663 (West 1989).