N.J. Supreme Court Upholds Order to Reimburse Workers’ Comp Claimant for Marijuana

The New Jersey Supreme Court on Tuesday ordered a construction company to reimburse a workers’ compensation claimant for marijuana that was prescribed to relieve his back pain caused by a work injury.

The high court rejected M&K Construction’s argument that if it paid for Vincent Hager’s marijuana it could be subject to criminal liability under federal law.

The 7-0 decision, written by Justice Lee A. Solomon, says M&K “…fails to show — and we strain to find — how its compliance with the order exhibits a specific intent to aid-and-abet Hager’s marijuana possession.”

The decision aligns New Jersey’s workers’ compensation medical marijuana policy with positions taken by the supreme courts of New Mexico and New Hampshire and an appellate court in New York. The high courts in Maine and Massachusetts, on the other hand, ruled that insurers and employers have no duty to reimburse claimants for marijuana use.

Solomon devoted a large portion of his opinion to an analysis of the Controlled Substances Act and Congress’ decision in each of the seven past fiscal years to bar the Department of Justice from prosecuting marijuana users and sellers who complied with state laws.

The federal law lists marijuana as a Schedule I drug — the government’s strictest classification of controlled substances. No valid medical use is recognized, meaning marijuana cannot be prescribed.

But according to the opinion, in the past decade the US Justice Department “deprioritized” prosecution for marijuana use in a series of instructions to US attorneys. While attorney generals during the Trump administration signaled they may renew enforcement, Congress tied their hands. Every federal appropriations act dating back to 2015 contained riders that prohibited the Justice Department from spending appropriated funds on prosecutions for marijuana activities that complied with state law, the opinion says.

During oral arguments, attorney Matthew Gitterman said despite those apparent conflicts, employers can’t pick and choose which laws to obey.

“Whether the payment is direct or indirect, the payment is still for marijuana,” he said. “It’s knowingly for marijuana. It’s a crime.”

Hager countered that M&K doesn’t face any credible theft of criminal prosecution and asserted that employers in New Mexico were not charged after the high court there upheld orders requiring employers to reimburse injured workers for medical marijuana.

The American Property and Casualty Insurance Association filed an amicus brief supporting M&K’s position. The National Organization for Reform of Marijuana Laws and two state marijuana advocacy organizations filed briefs supporting Hager.

Hager hurt his back while toting a load of cement in a wheelbarrow while working as a laborer for M&K in 2001. He underwent surgery but continued to suffer pain that was treated with opioids for years. In 2016, he enrolled in New Jersey’s medical marijuana program.

Dr. Joseph Liota prescribed marijuana to wean Hager off of opioids. The doctor later increased the prescription to two ounces per month — the maximum amount allowed — costing $600 per month.

M&K contended that Hager was no longer injured and no longer needed medications. Nevertheless, a workers’ compensation court found Hager was permanently disabled with a 65% disability rating — 50% because of complications after back surgery and 15% attributable to his marijuana use. The court also ordered M&K to continue paying for Hager’s medical care, including reimbursement for marijuana. M&K appealed but the Appellate Division affirmed the award.

M&K argued that it should be treated as a health insurer, which the New Jersey Compassionate Use Act specifically exempts from any mandate to reimburse patients for marijuana use. The Supreme Court said state statutes clearly state that the term “health insurance” does not include medical care provided through workers’ compensation law.

The court also rejected M&K’s argument that marijuana is not a reasonable and necessary medical treatment. Competent medical evidence was submitted to justify the request and the state legislature itself recognized marijuana’s ability to relieve pain when it adopted the Compassionate Use Act, the opinion says.

Finally, the Supreme Court was not persuaded by M&K’s argument that the Compassionate Use Act was pre-empted by federal law. It said Congress’ enactment of legislation barring prosecutions weakens that argument.

“M&K’s position that it faces aiding-and-abetting liability because it will reimburse Hager while knowing what the funds will be used for does not persuade us that it satisfies the specific intent requirement when the facts so clearly indicate that it will be doing so against its will and at the behest of this court,” the opinion says.

This article first was published in Insurance Journal’s sister publication, Claims Journal.