Hanrahan v. State: Distinct Attorney-Fee Caps for Each “Single Accidental Injury” under New Mexico’s Workers’ Compensation Act

1. Introduction

Court: Supreme Court of New Mexico
Date: 9 July 2025
Parties: Worker-Petitioner – Alfred J. Martin, Jr. (substituted by Gerald A. Hanrahan after Martin’s death).
Employer/Insurer-Respondents – State of New Mexico, Human Services Department and Risk Management Division.

Following a workplace slip-and-fall, Martin underwent a series of medical crises—knee infection, allergic drug reaction producing a traumatic brain injury, and a pulmonary embolism (PE). The employer accepted compensability for medical and disability benefits but challenged the Workers’ Compensation Judge’s (WCJ) award of two separate $22,500 attorney-fee “caps” under NMSA 1978, §52-1-54(I) (2013). The Court of Appeals reduced the fee to one cap, holding there had been only one compensable accident. On certiorari, the Supreme Court faced a statutory interpretation question that had never been squarely answered: when an initial workplace accident spawns additional, unforeseen medical injuries, does each consequent injury count as a separate “single accidental injury” for fee-cap purposes?

2. Summary of the Judgment

The Court unanimously reversed the Court of Appeals on the attorney-fee issue while affirming its preservation ruling on permanent partial/total disability benefits.
It held that:
- “Single accidental injury” in §52-1-54(I) refers to each distinct accidental injury—not the original accident event nor the number of claims filed.
- Consequential injuries (here, an allergic reaction and a pulmonary embolism) that flow directly and naturally from the primary work injury can themselves constitute discrete “single accidental injuries.”
- The causation provision in §52-1-28(A) (governing compensability) does not control the counting of injuries for attorney-fee calculations.
The case was remanded to the WCJ to award fees up to three caps ($67,500 total), subject to a reasonableness review under Rule 16-105 NMRA.

3. Analysis

3.1 Precedents and Authorities Relied Upon

Authority	Key Proposition Adopted
Meyers v. Western Auto	Cap applies per accidental injury, not per claim.
Molinar v. Larry Reetz Constr.	Statutory causation for compensability (§52-1-28) is distinct from other statutory questions (there, medical necessity; here, attorney fees).
1 Larson’s Workers’ Compensation Law §§10.01-.12	“Direct and natural consequence” doctrine—subsequent injuries are compensable if naturally flowing from original injury.
Fryar v. Johnsen	Need to avoid chilling effect on representation; fee limits must be balanced with adequate compensation to counsel.
Cisneros v. Molycorp	Accidental injury must be “unlooked-for” from worker’s perspective (foreseeability test).
Griego v. Patriot Erectors	Definition of “accidental injury” as an unexpected mishap.
Southwest Public Service Co. v. PRC	When statutory text is ambiguous, construe to avoid absurdity and honor statute’s “spirit or reason.”
Gonzalez v. Performance Painting	Judicial interpretation of the Act must balance interests of worker and employer.

3.2 Legal Reasoning

Textual Analysis
– The Legislature wrote “single accidental injury,” not “single accident.” “Accidental” modifies “injury,” indicating fee limits hinge on injuries themselves.
– The statute contains no language grouping consequential injuries with the primary accident for fee purposes, and courts will not read absent language into the Act.
Distinction between Accident vs. Injury
– An accident is the event; an injury is the physical/mental harm. Here one accident (slip-and-fall) produced three injuries (knee damage, allergic reaction, PE).
Causation & Compensability Separate from Fee Calculation
– Section 52-1-28 establishes when an injury is compensable; once compensable, any natural consequence is also compensable. But §52-1-54(I) is concerned only with attorney-fee allocation, not with re-litigation of causation for every consequence.
Foreseeability Test Applied to Each Consequential Injury
– Allergic reaction: rare and unexpected → satisfies “accidental.”
– Pulmonary embolism: although warned of as a risk at PICC removal, it was unforeseeable at the time of the original accident and thus qualifies.
Policy Analysis (“Spirit or Reason”)
– Twin goals: rapid, efficient benefit delivery at reasonable cost and adequate claimant representation.
– If all consequential injuries were forced under one cap, complex multi-injury cases would disincentivize lawyer participation, undermining equitable operation of the Act.
Safeguards against Excessive Fees
– Cap is cumulative regardless of number of attorneys.
– WCJ must still test reasonableness (Rule 16-105) case-by-case.
– Empirical WCA data show only 7 % of cases even reach one cap; multiple-cap situations will be rarer still.

3.3 Impact on Future Litigation and Administration

Predictability for Practitioners – Clarifies billing expectations in complex medical-cascade cases; counsel can assess fees per new consequential injury without fear of cap exhaustion.
WCJ Fact-Finding Enhanced – Judges must perform a nuanced “separateness” inquiry (body part, manner, circumstances, distinct disability proofs) for each alleged subsequent injury.
Employer & Insurer Exposure – Potential for multiple fee caps, but tempered by reasonableness review and rarity of qualifying cases. Risk-management departments must budget accordingly.
Legislative Response Possible – The Legislature may revisit §52-1-54(I) if it wishes to tighten or confirm the Court’s construction; fiscal-impact data will be central to the debate.
Relationship to Pena v. State (2025) – Court notes that the separate constitutional holding in Pena (striking the appellate-fee cap) applies prospectively and does not disturb Hanrahan’s analysis, leaving intact trial-level caps as construed here.

4. Complex Concepts Simplified

Single Accidental Injury (for fees): Think of it as each distinct harm, not the accident. One accident can spawn several accidental injuries; each may earn its own fee cap.
Consequential Injury Rule: When a compensable injury leads to further medical problems, those problems are usually compensable too (e.g., surgery infection, medication reaction, PE).
Fee Cap: A statutory maximum ($22,500) on total attorney compensation for one accidental injury, irrespective of how many lawyers work on the matter.
Foreseeability Test: If the worker could not reasonably anticipate the mishap at the time of the original accident, the resulting harm is “accidental.”
Distinction between Compensability and Fee Allocation: Causation proofs (§52-1-28) decide if benefits are owed; fee caps (§52-1-54(I)) decide how much lawyers can be paid. Different policy objectives, different analyses.

5. Conclusion

The Supreme Court’s decision in Hanrahan v. State ex rel. Human Services Department establishes an important clarification: New Mexico’s $22,500 attorney-fee cap applies per discrete accidental injury, including those that arise as direct medical consequences of the original workplace accident. By divorcing the fee-cap analysis from the causation rules governing compensability, the Court balances the Act’s competing aims—adequate worker representation and cost containment for employers. The ruling offers practical guidance to WCJs, attorneys, and insurers while signalling that the statutory text will be read as written, neither expanded nor contracted by judicial fiat. Going forward, multi-injury cases must carefully document and analyze each consequential mishap, knowing that a separate fee cap—subject to reasonableness—may attach to each.