The procedural rules governing discovery in workers' compensation cases serve critical purposes in ensuring fair and efficient adjudication. In particular, Labor Code 5502(d)(3) establishes that discovery closes on the date of the mandatory settlement conference (MSC), with strict limitations on the admission of evidence not disclosed in pretrial conference statements. Those rules are fundamental to the workers' compensation system's goal of expeditious resolution while maintaining due process protections.
On May 16, 2025, the 3rd District Court of Appeal in DPR Construction v. WCAB (McClanahan) (2025) 111 Cal. App. 5th 1136 issued a decision clarifying the discovery rules and addressing the standards for credibility findings under LC 5313. The decision was certified for publication June 11, 2025, ensuring its precedential value across California's workers' compensation system.
The court's decision provides important guidance for practitioners on two key issues: the level of detail required for credibility findings, and the strict enforcement of discovery closure rules. Most significant, the court held that violations of LC 5502's discovery requirements are not subject to harmless error analysis, even when the improperly admitted evidence might not have been the sole basis for the decision.
The case involved a DPR Construction employee who claimed a workers' compensation injury to his right shoulder while moving lumber July 25, 2017. The applicant's credibility became a central issue due to significant inconsistencies in his testimony. At deposition, he testified that the current employment was the first place he ever experienced right shoulder pain, but at trial he admitted suffering an industrial injury to his right elbow in 2013 and experiencing resulting shoulder pain. Medical records revealed multiple instances of shoulder treatment between 2013 and 2015, including an MRI and diagnosis of right shoulder impingement, which the applicant could not recall.
Originally, Dr. Hanley was designated as the qualified medical evaluator (QME), and he prepared two reports. He initially noted that some of the applicant's providers were suspicious about the validity of his complaints, but eventually concluded that the "red flags" in the applicant's history were no longer of concern. Later, Dr. Hanley was replaced as the QME, and the parties eventually stipulated that Dr. McGahan would serve in that role.
Dr. McGahan found that the applicant had pre-existing right shoulder pathology, but concluded that it was "medically probable" that his work duties on July 25, 2017 contributed to worsening his shoulder pain. Critically, Dr. McGahan noted that if the applicant was not credible, "this certainly would call into question the credibility of his claim," and the incident might represent only a temporary exacerbation rather than industrial aggravation.
The two earlier reports by Dr. Hanley were not listed in the pretrial conference statement. The workers' compensation judge (WCJ) admitted those reports over the defendant's objection, finding that they were available before the MSC. The defendant challenged a decision in favor of the applicant, asserting that the Workers' Compensation Appeals Board exceeded its power in two ways: (1) by failing to state the reasons for finding the applicant credible; and (2) by admitting two medical reports that were not listed in the pretrial conference statement.
The court first addressed the defendant's contention that the WCAB failed to satisfy LC 5313's requirement to state the reasons for finding an applicant credible. LC 5313 requires the board or WCJ to provide "a summary of the evidence received and relied upon, and the reasons or grounds upon which the determination was made."
The court rejected the defendant's argument, emphasizing that LC 5313 requires findings on ultimate facts rather than detailed credibility analysis. The court explained that "a finding that an employee's injury arose out of and in the course of employment is sufficient," and that the mandate to provide reasons and grounds was intended "to avoid careless and arbitrary action and to assist the reviewing court in meaningful judicial review."
It noted that the WCJ found the ultimate fact of industrial injury based on the applicant's testimony, treatment records and Dr. McGahan's findings, all of which were described in detail. The court found that this explanation adequately provided the required reasons and grounds, rejecting the notion that LC 5313 demands additional detail regarding specific credibility determinations. It concluded that the WCAB properly gave great weight to the WCJ's credibility determinations and found no evidence of considerable substantiality to reject the determination.
The court's most significant holding concerned the admission of the undisclosed reports from the previous QME (Hanley reports). LC 5502(d)(3) establishes that discovery closes on the date of the MSC, and evidence not disclosed in pretrial conference statements is inadmissible unless the proponent demonstrates that it was unavailable or could not have been discovered through due diligence.
The court emphasized that LC 5502 serves two critical purposes: (1) to eliminate the element of surprise in workers' compensation proceedings and (2) to guarantee a productive dialogue leading, if not to expeditious resolution of the whole dispute, to thorough and accurate framing of the stipulations and issues for hearing.
Although the WCAB conceded that admitting the Hanley reports violated LC 5502, it argued that the error was harmless because the reports did not form the basis of the decision. Following the long-standing precedent from San Bernardino Community Hospital v. WCAB (McKernan) (1999) 74 Cal. App. 4th 928, the court held that LC 5502 "establishes the bounds of discretion vested in the [workers' compensation judge] for keeping discovery open after the mandatory settlement conference," and that "[d]isregard for the statutory procedural mechanisms for resolving workers' compensation cases is inappropriate." Critically, the court emphasized that "such disregard is not subject to harmless error analysis."
The court explicitly rejected the argument that lack of prejudice could excuse the violation, noting that "an opposing party might often be unable to show specific prejudice," and that allowing harmless error analysis "would threaten to make section 5502, subdivision (d)(3) meaningless."
The DPR Construction decision establishes several important principles for workers' compensation practice. First, it clarifies that LC 5313 does not require detailed explanations of credibility findings beyond the ultimate facts and the evidence relied on. WCJs need not provide extensive analysis of witness demeanor or specific reasons for credibility determinations, provided they adequately explain the basis for their ultimate findings.
More significant, the decision reinforces the strict enforcement of discovery closure rules under LC 5502. The court's rejection of harmless error analysis for procedural violations represents a significant protection for due process rights in workers' compensation proceedings. That holding ensures that the MSC serves its intended purpose of eliminating surprise and promoting thorough case preparation.
For defense attorneys, this decision provides strong grounds for challenging the admission of evidence not disclosed in pretrial conference statements, regardless of whether specific prejudice can be demonstrated. The court's emphasis that such violations are not subject to harmless error analysis creates a bright line rule that should encourage more careful compliance with discovery requirements. The decision also highlights the importance of thorough credibility challenges during proceedings rather than relying on appellate review of credibility determinations.
For all practitioners, the decision emphasizes the importance of careful case preparation and strict adherence to statutory deadlines. The MSC represents a critical juncture where discovery closes and cases must be fully prepared for trial. The DPR Construction decision ensures that this procedural framework maintains its integrity and continues to serve its intended purposes of promoting settlement and ensuring fair adjudication.
The decision reinforces that workers' compensation proceedings intended to be expeditious and accessible still must adhere to fundamental procedural safeguards. The court's strict enforcement of discovery rules ensures that the system's efficiency does not come at the expense of due process rights. By annulling the board's decision and remanding for further proceedings, the court sent a clear message that procedural compliance is not optional, even when the violation might appear harmless.
For further discussion of the closure of discovery at MSC, see "Sullivan on Comp" Section 15.41 Mandatory Settlement Conference — Close of Discovery. For further discussion of the WCAB's findings on witness credibility, see Section 16.17 Evidence at Trial — Witness Testimony.