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A Mexican transportation company must repay Arizona for workers compensation benefits paid to a truck driver who was injured in the state, even though the worker's injuries were partially covered by Mexico's social security agency, an Arizona appellate court ruled.
Adan Valenzuela, a Mexican citizen and resident, worked for Porteadores del Noroeste S.A. de C.V., court records show. The Tijuana, Mexico-based company transports diesel fuel from Phoenix to Nogales, Mexico, just south of the Arizona border.
Mr. Valenzuela suffered several injuries when the truck he was driving was involved in a rollover accident in Arizona, records show. He was treated at hospitals in Mexico and then in Tucson, Ariz. He returned to Mexico after being discharged from the Arizona facility.
Mr. Valenzuela filed for disability benefits from the Instituto Mexicano del Seguro Social, Mexico's social security agency, records show. He also filed for workers comp benefits with the Industrial Commission of Arizona in September 2010, and his claim was referred to the commission's special fund division because Porteadores did not have an Arizona workers comp policy.
The Mexican agency granted disability benefits to Mr. Valenzuela, but declined to pay $17,000 in medical bills from a doctor in Mexico who was outside the agency's medical network, records show. Mr. Valenzuela requested that the Arizona special fund pay for his medical treatment in Arizona, as well as the medical bills that were unpaid in Mexico.
The special fund denied Mr. Valenzuela's claim because it found that “full compensation benefits have been paid” by the Mexican social security office, records show.
But an Arizona administrative law judge found that Mr. Valenzuela was entitled to receive “medical, surgical and hospital” benefits from the Arizona special fund, including the unpaid medical bills in Mexico. The judge also found that the special fund was entitled to a credit for benefits that were already paid to Mr. Valenzuela by the Mexican agency.
Porteadores appealed, contending that requiring a foreign employer to comply with Arizona workers comp law — and requiring Porteadores to repay the Arizona special fund for Mr. Valenzuela’s treatment — violated U.S. law, records show.
Porteadores also argued in part that the North American Free Trade Agreement and the Foreign Commerce Clause pre-empted Arizona workers comp law and claims that would be covered by the Mexican agency, records show.
In a unanimous ruling Tuesday, a three-judge panel of the Arizona Court of Appeals upheld Mr. Valenzuela’s award of Arizona workers comp benefits. In its ruling, the court held that only the U.S. government can challenge potential state law conflicts with NAFTA.
The court also said that the Foreign Commerce Clause, which gives Congress the power to regulate interstate and foreign commerce, does not apply because there were no “specific indications of congressional intent” to prevent Arizona workers comp laws from applying to Porteadores.
“Arizona’s authority to regulate and enforce workers compensation for employees engaged in foreign commerce does not contravene federal law,” the ruling reads. “Accordingly, the (administrative law judge) properly determined that Porteadores is subject to Arizona’s workers compensation statutes in effect at the time of Valenzuela’s injury.”