In their response, NuStar noted that it would treat each of Bundy's requests as a "consequential condition claim" and each claim was being denied based on the assertion that the work exposure was not the major and contributing cause of the subsequent conditions.

When Bundy's challenge of the denial was brought to the workers' compensation board, Bundy was unable to establish that the work incident was the major contributing cause of the somatoform disorders that he was now suffering. The workers' compensation board issued an order that determined that because Bundy had failed to establish the work-related incident was the cause of the injury, the disorders were not compensable.

Bundy also filed a civil suit against his employer NuStar for negligence, arguing that under Oregon statute 656.019, the workers' compensation board's order precluded NuStar from arguing that Bundy's negligence claim was barred by the workers' compensation law's exclusive remedy provision. NuStar responded that there was only one workers' compensation claim for any work incident. That claim could be accepted or denied, and that the cited Oregon statute only applied when the initial claim had been denied.

The trial court ruled that the negligence allegations failed to state a claim for relief that could avoid the exclusive remedy law. The appellate court affirmed the decision of the trial court, agreeing with NuStar's assertion that the cited statute only applied when the initial claim was denied.

The Oregon Supreme Court eventually received the case. There, Bundy argued that he had satisfied the requirements of ORS 656.019 by showing that each of his two somatoform disorders were a work-related injury, that the conditions had been determined to not be compensable because he had failed to establish that the work-related incident was the major contributing cause of the conditions, and he had received a final order that determined that the claim was not compensable. Because these three things had occurred, the negligence case should be allowed.

The Supreme Court reversed the decision of the earlier courts, deciding that ORS 656.019 used terms such as "work-related injury" and "the claim" in such an open way, the terms encompassed claims like Bundys, where the condition was "denied on major-contributing-cause grounds after an initial claim acceptance was issued." The court stated that the statute cited applied to a negligence action for injuries that had been determined not to be compensable after the initial workers' compensation claim was accepted.

Editor's Note: Workers' compensation is generally an exclusive remedy for workplace injury. Exclusive remedy is a compromise between the employer and the employee stating that if an employee is injured on the job, the benefits that they receive from their workers' compensation claim for that injury is the only remedy that will be given. Meaning that the employee can't sue the employer for additional compensation for that same injury. In this case NuStar did not believe that they could be sued for negligence because of the exclusive remedy provision, because they had accepted Bundy's initial workers' compensation claim for "non-disabling exposure to gasoline vapors". Since the claim had not been denied, as mentioned in the statute, Bundy could not sue them for negligence. The difference here is that Bundy had filed two separate claims for injuries that NuStar subsequently denied. Because of these denials, the Oregon Supreme Court determined that Bundy should be able to take the claims to a judge and jury to determine the appropriate outcome, and thus broadened the exception to the "exclusive remedy" provision of the workers' compensation law.