Thought Leadership

In Hager v. M&K Constr., the respondent, M&K Construction, appealed a workers’ compensation order to reimburse the petitioner for medical marijuana, which was prescribed after a work-related injury. The petitioner was injured in August 2001 while employed as a laborer for M&K. He underwent two back surgeries, but due to persistent pain, he took opioid medication. He began treating with Dr. Joseph Liotta in 2016, when he was enrolled in the medical marijuana program as an alternative pain treatment and a means to wean him off opioids. Although he started with an ounce per month, his dose increased to the maximum allowed—two ounces—which cost more than $600.00 per month.

At trial, Dr. Liotta testified for the petitioner, noting that he suffered adverse side effects from opioids and was “motivated” to stop, which happened a month after starting medical marijuana. Dr. Liotta indicated there is a smaller risk of addiction to marijuana and fewer serious side effects. The petitioner also testified that it helped him wean off opioids, lessened his pain and helped with muscle spasms. In addition, Dr. Cary Skolnick testified for the petitioner that he needed long-term pain management as a result of the August 2001 injury and that he was 100% permanently and totally disabled, apportioning 65% for the back injury and 35% due to medication effects.

On the other hand, Dr. Gregory Gallick testified for the respondent, finding the petitioner to be 12.5% permanently disabled and still capable of certain jobs. Dr. Robert Brady also testified in describing side effects and risks of medical marijuana. He noted both medical marijuana and opioids were equally psychologically addictive, though opioids were more physically addictive. He opined that medical marijuana was not proven effective for conditions such as the petitioner’s and, rather, the best form of relief would be physical therapy and home exercise.

The Workers’ Compensation Judge found 65% permanent partial disability, apportioning 50% for the orthopedic condition and 15% due to medical marijuana effects. In choosing between medical marijuana and opioids, the court noted medical marijuana was the “clearly indicated option” and ordered M&K to reimburse the petitioner for its costs. The judge found Dr. Liotta and the petitioner’s testimony to be more credible than that of Dr. Brady, specifically emphasizing the petitioner’s ability to wean off opioids. The court indicated that “the Legislature intended to make available the benefits of medical marijuana to persons displaying a medical need, despite the federal attitude toward the substance.” Finally, the judge rejected the notion that M&K was like a private health insurer or government medical benefit program, which would not be required to reimburse medical marijuana costs.

The Appellate Division affirmed the workers’ compensation court’s findings and further went on to analyze whether the New Jersey Jake Honig Compassionate Use Medical Cannabis Act (Compassionate Use Act) was preempted by the federal Controlled Substances Act (CSA). In doing so, the Appellate Division found the Compassionate Use Act did not require employers to “possess, manufacture, or distribute” marijuana per the CSA. In addition, the Appellate Division concluded there was no aider-and-abettor liability for assisting in the petitioner’s possession as M&K did not have the requisite intent and, thus, did not face a credible threat of federal prosecution.

The Supreme Court then granted M&K’s petition for certification. First, the Supreme Court considered M&K’s argument that it should not have to reimburse the petitioner for costs of medical marijuana under the Compassionate Use Act and N.J.S.A. 24:6I-14 as it exempts “a government medical assistance program or private health insurer” from reimbursement. The court rejected this argument, citing to the plain language of the statute and indicating a workers’ compensation carrier does not fall into either category. Furthermore, the court looked to the legislative intent in not specifically including workers’ compensation insurance in the Compassionate Use Act, as other states have done. Because the Legislature did not exclude workers’ compensation carriers and included “chronic pain” as a qualifying medical condition, M&K was not exempt from reimbursing the petitioner.

Next, the Supreme Court rejected M&K’s argument that medical marijuana was not a “reasonable and necessary treatment.” The court looked to a prior decision in Squeo v. Comfort Control Corp., 99 N.J. 588 (1985), where construction of an injured worker’s apartment was found to be reasonable and necessary. The Squeo court not only considered the petitioner’s loss of use of his arms and legs, but also the possible psychological harm due to the petitioner’s multiple suicide attempts after an offer for placement in a nursing home. Similarly, in this case, the court recognized a potential harm to the petitioner in continuing to use opioids. In addition, reimbursement of medical marijuana was noted to be much less unique than the construction of an apartment found in Squeo.

In returning to the first point, as the Supreme Court found M&K was obligated to reimburse the petitioner under the Compassionate Use Act and the workers’ compensation statute, the court then analyzed whether the federal CSA quashed M&K’s state law obligations. After finding guidance from the United States Supreme Court and several circuit courts, the court determined M&K could follow both the Compassionate Use Act and CSA, as the first does not create any obstacles in accomplishing congressional objectives. The court also acknowledged that its decision differed from other state supreme courts, but it noted they were not binding and that its decision was in line with legislative intent, an analysis of federal authorities and the principles of preemption.

Finally, the Supreme Court discussed M&K’s contention that reimbursing medical marijuana costs would be aiding and abetting the petitioner’s possession of marijuana. The court initially noted that M&K was not “electing” to aid the petitioner’s possession of marijuana but, rather, that it was being compelled by court order. Further, the court indicated M&K failed to demonstrate specific intent to aid-and-abet. Again, it was reiterated that M&K was being compelled by the court and, thus, could not be considered as intentionally committing an offense.

Approximately a month after the Supreme Court’s decision in Hager, the Appellate Division in Calmon v. Pepsi Bottling Group affirmed the workers’ compensation order to reimburse the petitioner for medical marijuana prescribed for a work-related back injury. As Hager addressed the same issues raised by Pepsi Bottling Group, the Appellate Division issued this decision after relying on Hager.

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