Editor in Chief

Bernadette M. O'Brien is an attorney at law in California.

She is the author of the popular Lexis Nexis publication Labor and Employment in California; A guide to Employment Laws, Regulations and Practices Second Edition which has been in publication since 1992. The book covers an array of employment related issues including discrimination, sexual harassment, wage and hour, family Medical Leave Act, and Privacy in the workplace.

She is of counsel with the Law Offices of Floyd, Skeren & Kelly, LLP in the firm's Sacramento office.

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Co-Editor

Rene Thomas Folse, JD, Ph.D. is an attorney at law and licensed psychologist in California.

He has practiced workers' compensation law for 35 years. His focus of practice involves claims of mental health injury where forensic psychology is involved in the evaluation of the claim. He has been an instructor and lecturer for many organizations and educational institutions and teches continuing education courses for attorneys, physicians and psychologists.

Recent Workers' Compensation News for May 28, 2015

California WCAB Claims Jurisdiction Over New York State Insurance Fund
Wed, 27 May 2015 15:58:57 - Pacific Time
Several consolidated case between former players and the New Your Giants were set for arbitration between the team and the New York State Insurance Fund. The Giants sought reimbursement for defense costs and indemnity expenses incurred as a result of the workers' compensation claims filed by the former players.

In his decision the Arbitrator found that there was a contract of workers' compensation insurance between NYSIF and employer New York Giants from September 24, 1975 to January 1, 1977, that requires NYSIF "to indemnify [the Giants] for any benefits awarded and to present a defense to the claims" that were consolidated for hearing of the coverage issue by the Arbitrator, and that NYSIF "does not have a valid claim of sovereign immunity with respect to the claims." Based upon those findings, the Arbitrator ordered NYSIF to indemnify the Giants for all reasonable legal expenses and costs incurred in defending the claims and to indemnify the Giants against any award made in favor of its former employees.

The New York State Insurance Fund petitioned for reconsideration. The WCAB denied the petition and affirmed the arbitrators award in the panel decision of Larry Watkins, el. al. v New York State Insurance Fund.

The Giants secured workers' compensation insurance coverage through NYSIF for a period between September 24, 1975 to January 1, 1977. However, during that time approximately one-half of the Giants' games were away games that were played on the opponents' home fields outside of New York. All home games from October 10, 1976 to the end of NYSIF's period of coverage, two full seasons worth of home games, were played at the Giant's newly built stadium located at the Meadowlands Sports Complex in East Rutherford, New Jersey, which is where the team was headquartered and the players practiced and trained.

NYSIF contends that it was created under New York law and has sovereign immunity from suit in California, and that the New York statutes preclude it from defending or paying claims for workers' compensation filed outside of New York for injuries sustained outside of New York. NYSIF further contends that it is not authorized to write insurance in California, that the decision of the Arbitrator is not supported by the evidence, that the Arbitrator should have applied the principle of comity to determine that NYSIF is not liable, and that the limited connections between the consolidated cases at issue and the state of California does not support WCAB jurisdiction over the claims.

Coverage B of the policy provides that NYSIF will "indemnify" the Giants "against loss by reason of the liability imposed upon [it] by Law for damages on account of such injuries to such employees wherever such injuries may be sustained ... " There is no evidence of any limitation or exclusion from the Coverage B provisions. In the absence of any such limiting or exclusionary language, Coverage B supports the Arbitrator's determination that NYSIF provided insurance coverage for injuries sustained by Giants' employees outside of New York and for claims filed in other states.

The language of an insurance policy must be clear in describing exclusions and limitations on coverage, and the specimen policy placed into evidence does not clearly limit NYSIF to only defending and paying workers' compensation claims filed in New York. Moreover, any such limitation would be inconsistent with the fact that during the coverage period at issue, the vast majority of employment duties performed by the covered employees were outside of New York. Read More...

An Epidemic of Fake Science
Wed, 27 May 2015 15:58:51 - Pacific Time
Medical treatment in the California workers' compensation now requires that the treatment pass the scrutiny of "evidence based medicine" which means that scientific studies support the safety and efficacy of the requested care. That might seem like a straight forward process.

But, an article in Scientific American claims that false positives and exaggerated results in peer-reviewed scientific studies have reached epidemic proportions in recent years. The problem is rampant in economics, the social sciences and even the natural sciences, but it is particularly egregious in biomedicine. Many studies that claim some drug or treatment is beneficial have turned out not to be true. We need only look to conflicting findings about beta-carotene, vitamin E, hormone treatments, Vioxx and Avandia. Even when effects are genuine, their true magnitude is often smaller than originally claimed.

The problem begins with the public’s rising expectations of science. Being human, scientists are tempted to show that they know more than they do. The number of investigators - and the number of experiments, observations and analyses they produce - has also increased exponentially in many fields, but adequate safeguards against bias are lacking. Research is fragmented, competition is fierce and emphasis is often given to single studies instead of the big picture.

Much research is conducted for reasons other than the pursuit of truth. Conflicts of interest abound, and they influence outcomes. In health care, research is often performed at the behest of companies that have a large financial stake in the results. Even for academics, success often hinges on publishing positive findings. The oligopoly of high-impact journals also has a distorting effect on funding, academic careers and market shares. Industry tailors research agendas to suit its needs, which also shapes academic priorities, journal revenue and even public funding.

The crisis should not shake confidence in the scientific method. The ability to prove something false continues to be a hallmark of science. But scientists need to improve the way they do their research and how they disseminate evidence.

First, we must routinely demand robust and extensive external validation - in the form of additional studies - for any report that claims to have found something new. Many fields pay little attention to the need for replication or do it sparingly and haphazardly. Second, scientific reports should take into account the number of analyses that have been conducted, which would tend to downplay false positives. Of course, that would mean some valid claims might get overlooked. Here is where large international collaborations may be indispensable. Human-genome epidemiology has recently had a good track record because several large-scale consortia rigorously validate genetic risk factors.

Many scientists engaged in high-stakes research will refuse to make thorough disclosures. More important, much essential research has already been abandoned to the pharmaceutical and biomedical device industries, which may sometimes design and report studies in ways most favorable to their products. This is an embarrassment. Increased investment in evidence-based clinical and population research, for instance, should be designed not by industry but by scientists free of material conflicts of interest.

Eventually findings that bear on treatment decisions and policies should come with a disclosure of any uncertainty that surrounds them. It is fully acceptable for patients and physicians to follow a treatment based on information that has, say, only a 1 percent chance of being correct. But we must be realistic about the odds. Read More...

Are Insured PEO's With Large Deductibles a Growing Problem?
Tue, 26 May 2015 08:43:50 - Pacific Time
Labor Code section 3701.9, was added in 2012 as part of SB 863. This provision prohibits temporary services employers (TSE’s) and leasing employers (LE’s) from self-insuring their workers’ compensation liability. These entities that were self-insured in 2012 when SB 863 was passed had to become insured by January 1, 2015. The concern addressed by section 3701.9 is that a self-insured staffing company may grow rapidly during a calendar year without a concomitant increase in its workers’ compensation self-insurance deposit. Self-insured employers do not pay insurance premiums; instead, they post a security deposit each year. A self-insured employer would not have to increase the security deposit for its increased payroll until the following year, unlike a typical employer with workers’ compensation insurance, which is required to pay an increased premium on newly hired employees as soon as they are hired. When a self-insured employer’s security deposit is insufficient, the obligation for the loss falls on the Self-Insurers’ Security Fund (Fund) (§§ 3742, 3743) and other self-insured employers may be charged a pro rata share of the funding necessary to meet the obligations of an insolvent self-insurer.

Section 3701.9 was challenged on constitutional grounds by Kimco Staffing Services soon after the law was passed. But this month the Court of Appeal found the law to comply with constitutional standards in the published case of Kimco Staffing Services v State of California Many staffing companies have met the new requirements by purchasing workers compensation insurance with a large deductible.

But now, Lumbermen’s Underwriting Alliance, which issued large deductible workers’ compensation plans for professional employer organizations among other insurance lines, has been put into rehabilitation according to a Missouri Department of Insurance announcement.

LUA specializes in providing property and casualty insurance to the forest products industry, generally consisting of lumber and sawmill operations. Over time, LUA expanded its offerings, and therefore its membership, to a broader range of industries and insurance coverage's. By 2014, LUA was providing property allied lines, inland marine, earthquake, and workers' compensation coverage to assisted living facilities and the food processing industry, as well as the forest products industry. LUA also issued large deductible workers' compensation plans for professional employer organizations ("PEOs").

Lumbermen's faced financial difficulty when one of its largest PEO insureds, TS Employment, failed to fully fund collateral obligations and filed Chapter 11 bankruptcy. The Chapter 11 bankruptcy filing for New York-based TS Employment listed the IRS as a creditor with $95.2 million in taxes owed, according to court records. Corporate Resource Services is TS Employment’s only client. New York-based Corporate Resource Service ranks as the 22nd-largest US staffing firm based on 2013 revenue. TS has up to 30,000 employees for which it processes payroll, according to court filings.

"Throughout LU A's more than 110-year history, we have worked hard to build a reputation of integrity, trust and reliability, " stated Jan Carlsson, President and Chief Executive Officer. "I want to assure the market that we are committed to remaining accessible and responsive to our policyholders during this voluntary supervision period and beyond." LUA has taken the necessary step of entering into a voluntary supervision period due to a sudden and unanticipated Chapter 11 Bankruptcy filing by T.S. Employment Services, Inc., a Tri-State affiliated company with whom LUA has had a customer relationship for more than eight years. LUA provided workers compensation coverage for Tri-State, which offers payroll processing and revenue billing services as a Professional Employer Organization (PEO). T.S. Employment Services was forced into bankruptcy when it was unveiled that the company had "material., unpaid federal payroll tax liability." Mr. Carlsson noted that as a result of T.S. Employment's filing, "Tri-State's ability to continue to meet its financial obligations to LUA has been placed in question ."

Rehabilitation is a legal step taken by the court to protect policyholders by preserving the company’s assets. John Huff, director of the Missouri Department of Insurance, was named receiver by the court. The move allows him to take over operations of the company. Huff will now attempt to correct existing problems, continue operations of Lumberman’s, maintain policyholder accounting and develop a plan of rehabilitation or petition the court for liquidation, according to the department. Policies will continue pursuant to their terms and conditions, and policyholders must continue making premium payments to keep insurance coverage intact, according to the department.. "Putting Lumbermen’s into rehabilitation allows us to ensure the company’s assets are handled properly so that claims are paid as fully as possible," Huff said.

Lumbermen’s, based in Florida, had approximately 3,000 policyholders and 6,080 open workers’ compensation claims with the largest number of claims in California. Read More...

NIOSH Grant to Assist DIR Research
Tue, 26 May 2015 08:43:44 - Pacific Time
The Department of Industrial Relations (DIR) and the California Department of Public Health (CDPH) were awarded a grant of nearly $200,000 per year for a workers' compensation research project from the National Institute for Occupational Safety and Health (NIOSH).

California was one of two states chosen nationwide for this renewable three-year grant to examine workers' compensation claims data for injury and illness findings. The NIOSH grant will facilitate combining this data to related data sources for better identification of occupations and industries with the highest rates of injury, and to develop recommendations for workplace interventions. "We are pleased that NIOSH has acknowledged and recognized our ongoing commitment to job safety," said DIR Director Christine Baker. "This dual-agency collaborative effort will further clarify key indicators to prevent workplace illnesses and injuries." Related Stories

CDPH Director Dr. Karen Smith echoed this sentiment and praised NIOSH for recognizing and supporting "efforts by CDPH's Occupational Health Branch (OHB) to promote a safe and healthy work environment for Californians" and for enabling this unprecedented collaboration across agencies.

In the past, occupational injury and illness research relied on data not normally utilized for public health purposes. The California Workers' Compensation Surveillance Project is intended to enhance the usage of existing workers' compensation data to survey, collect, analyze and interpret health-related information for supporting public health programs and services. This includes:

1) Identifying and analyzing trends, emerging issues, high-risk occupations and industries, worker populations;
2) Combining and summarizing data from workers' compensation (WC) claims with other sources that have a common denominator;
3) Providing a data analysis report to the public that contains the numbers and rates of WC claims
4) Developing recommendations for workplace interventions;
5) Creating an electronic public-access WC case dataset for future analyses.

"The project will help supplement policy changes, including important health and safety regulations," said Destie Overpeck, Administrative Director of the Division of Workers' Compensation (DWC).

The information collected will be used by public health practitioners, organized labor, community-based organizations, government officials, and other stakeholders to develop safety and health programs for reducing and preventing risks to workers.

The Office of Policy, Research, and Legislation (OPRL) within the Department of Industrial Relations (DIR) focuses on federal and state emerging issues related to workers and employers ; conducts, oversees, and maintains statistical data for public works projects and occupational injuries and illnesses; and performs the analysis and coordination of interdepartmental and agency - related legislative activities. Read More...

Industrial Compensability of Fresno Pipeline Explosion Uncertain
Fri, 22 May 2015 12:39:18 - Pacific Time
Fresno County is trying to shield itself from high-cost lawsuits from inmates who worked at the Fresno Sheriff’s Foundation shooting range the day a Pacific Gas and Electric pipeline exploded by saying the inmates fall under the state Workers’ Compensation program. If the county succeeds, the medical bills of 10 injured inmates will be paid through the state program, greatly reducing the county’s financial burden. In addition, the inmates wouldn’t be able to sue the county for general damages. It would not preclude the inmates from suing Pacific Gas which owns and maintains the pipeline.

According to the report in the Fresno Bee, the cause of the April 17 pipeline explosion at the northwest Fresno shooting range is under investigation by the state Public Utilities Commission. It occurred while a county front loader was driving on a road atop a berm that was being maintained. The loader driver was not digging, according to Sheriff Margaret Mims, but flattening dirt on the berm. The inmates were on the shooting ranges doing property maintenance. One inmate died in the hospital, while the loader driver, two deputies and nine inmates were injured.

Fresno County Counsel Dan Cederborg said that "jail inmates who are performing work on sheriff’s work crews are subject to workers’ compensation coverage in most circumstances" under state law. The inmates don’t have to be declared employees, he said. But Butch Wagner, a lawyer who represents five of the injured inmates, said the county is attempting a legal maneuver to save money if it’s found at fault. "They are not employees," Wagner said. "It doesn’t surprise me, but what they have is an incredibly weak defense that isn’t going to stick." Workers’ compensation claims have been paid to inmates in California state prisons, but the distinction is that those inmates report to the same jobs every day, Wagner said.

Warren Paboojian, who represents a sixth inmate, said the county’s effort is a way to pay lower damages and the arrangement wasn’t for pay. "There needs to be some form of (pay to inmates) for them to be employees," Paboojian said. The jail inmates only occasionally work, making their status as employees much more subject to question, he said.

Even a county filing adds uncertainty to the issue. In a workers’ compensation claim filed by the county on behalf of one of the inmates, claims examiner Kay Gonzalez said, "We are unable to determine if you are eligible for workers’ compensation benefits from the information we have."

Lawyer Tom Tusan, a Fresno workers’ compensation specialist, said the county wants the inmates to be employees to limit its financial exposure. Workers’ compensation prohibits a suit for general damages, he said. But workers’ compensation is only suitable under certain conditions and it’s not entirely clear whether those conditions exist for the county inmates at the range. It may exist for one inmate, he said, and not for another.

In state prisons, Tusan said, there are automatic work details, which will qualify an inmate for workers’ compensation in case of an injury.

Fresno County’s rules depend on its ordinances. If an inmate volunteered to work, he isn’t covered. The employee is covered "if he’s part of a designated work crew where he is offered the job and accepts it," Tusan said. "It becomes an employment contract between himself and the county. Read More...

Draft Regulations Regarding Transition to ICD - 10 Posted for Public Comment
Fri, 22 May 2015 12:39:13 - Pacific Time
The Department of Industrial Relations (DIR) and its Division of Workers’ Compensation (DWC) posted draft regulations regarding transitioning the California workers’ compensation system from the ICD-9 system of diagnosis to the ICD-10 system of diagnosis, effective October 1, 2015.

The Office of Administrative Law has published DIR and DWC’s notice of public hearing for these proposed regulations. The public hearing is scheduled for 10 a.m., Tuesday, July 7, 2015, in Room 1 of the Elihu Harris State Office Building, 1515 Clay Street in Oakland. Members of the public may also submit written comments on the regulations until 5 p.m. that day.

ICD-10 is the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list maintained by the World Health Organization (WHO). The deadline for U.S. providers to begin using Clinical Modification ICD-10-CM for diagnosis coding and Procedure Coding System ICD-10-PCS for inpatient hospital procedure coding is October 1, 2015. In preparation for this deadline, it is necessary for DIR and DWC to update regulations and forms to refer to ICD-10 instead of ICD-9.

Regulations that are being updated include 8 C.C.R. sections 9770, 9785, 9792.5.1, 14003, 14007 and DWC’s Medical Billing and Payment Guide. Forms affected include 5021 (Doctor’s First Report of Occupational Injury or Illness), PR-2 (Primary Treating Physician’s Progress Report), PR-3 and PR-4 (Primary Treating Physician’s Permanent and Stationary Reports).

The notice and text of the regulations can be found on the proposed regulations page. Read More...

Ambulance Companies Settle Fraud Cases for $11.5 Million
Thu, 21 May 2015 08:14:00 - Pacific Time
In a lawsuit unsealed this month in federal court, five ambulance companies have entered into civil settlements with the Department of Justice requiring them to collectively pay more than $11.5 million in payments to the United States to resolve kickback allegations. The settling defendants include three Orange-County based companies - Pacific Ambulance, Inc. and Bowers Companies, Inc., (both of which were subsequently acquired by Rural/Metro Corporation after the alleged misconduct occurred) and Care Ambulance Service, Inc.; and two San Diego-based companies - Balboa Ambulance Service, Inc., and E.R. Ambulance, Inc.

In Carlisle v. Pacific Ambulance et al., Case No. 3:09-cv-02628-L-BLM (S.D. Cal.), the settlements resolve allegations that the defendants engaged in so-called "swapping" kickback schemes by providing deeply discounted - and often below cost - ambulance services to hospitals and/or skilled nursing facilities in exchange for exclusive rights to the facilities’ more lucrative Medicare patient referrals. Such swapping arrangements can lead to overutilization of medical services and inflated charges to the Medicare program. The government alleges that the arrangements in this case resulted in false claims for Medicare Part B transports which in essence subsidized the discounted trips.

The Anti-Kickback Statute prohibits payment arrangements that are intended to influence health care referrals. The statute generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.

"Today’s settlements resolve a thorough investigation of the practices by ambulance companies that offered significant discount services to facilities in exchange for patient referrals," said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (OIG) Los Angeles Region. "The OIG takes this type of activity very seriously and welcomes the public’s assistance in identifying any health care businesses that engage in similar types of schemes."

These settlements resolve a False Claims Act lawsuit filed in the Southern District of California by Kelvin Carlisle, a competitor in the San Diego, Orange and Los Angeles County ambulance marketplaces. The whistleblower or qui tam provisions of the False Claims Act permit the whistleblower to recover a portion of the proceeds obtained by the federal government. As part of the resolution of the suit, Mr. Carlisle will receive in excess of $1.7 million.

These settlements illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs. "It is a priority of this office to combat abuses that drive up the cost of health care and waste taxpayer dollars," said Laura E. Duffy, United States Attorney for the Southern District of California. "We will continue to work closely with our investigative partners to pursue those who refuse to play by the rules and offer kickbacks to induce health care referrals."

The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation.
Read More...

Company Cited After Window Washer Survives 11 Story Fall
Thu, 21 May 2015 08:13:53 - Pacific Time
Following an investigation into a window washer’s eleven-story fall from the roof of a San Francisco building, Cal/OSHA cited Century Window Cleaning for five safety hazards. Two of the five hazards cited were for serious violations including the failure to secure the roof with fall protection equipment and inadequate training on the proper use of the victim’s personal fall protection equipment.

Cal/OSHA investigators determined that Pedro Perez, (58), was in the process of moving the extension cord of a suspended scaffold around the corner of the building at 400 Montgomery Street in San Francisco. As he moved toward the edge of the roof, he disconnected the lanyard of his fall protection equipment from an anchor point. He then lost his balance and tumbled over the edge. The plunge sent him 130 feet to the street below. Perez smashed into a moving car where he laid wincing and miraculously alive for a moment on the crumpled roof of a green Toyota Camry, witnesses said, and then rolled off onto the pavement. "He was one lucky man to survive that fall," said Peter Melton, a spokesman with the California Department of Industrial Relations. "It seems pretty clear the cushioning of the car he fell onto kept him alive."

In total, there were five citations with proposed penalties of $12,765 issued in this case: three general, one serious and one serious accident related citations. A general violation is cited when an accident or illness resulting from the violation of a standard would probably not cause death or serious harm, but would have a direct effect on the health of employees. In contrast, a serious violation is cited when there is a realistic possibility that death or serious physical harm could result from the violation.

Century Window Cleaning was issued a citation in 2008 for four regulatory violations in Redwood City. Two involved work procedures, and two involved use of equipment, he said. No accidents or injuries were involved. The company was fined $2,720.

"While it is miraculous that this man survived a fall from this height, his fall is an essential reminder that employers are required to provide protections from the hazards of high elevation work," said Department of Industrial Relations (DIR) Director Christine Baker.

"Falls from elevation are a leading cause of death and injury among workers. Cal/OSHA just concluded a statewide effort to highlight the importance of fall safety protection, including a review of fall protection equipment and the need to train on its use," stated Cal/OSHA Chief Juliann Sum.

According to 2013 statistics on California workplace fatalities published by the Bureau of Labor Statistics, 22 of 61 fatalities in the construction industry were due to slips, trips and falls. But, Stefan Bright, safety director for the International Window Cleaners Association, said 14 incidents have been reported for the year involving window washing that required rescue, and three of those involved injuries. One was fatal. In 2013, there were 11 rescue situations, two of which involved fatalities. "Relatively speaking, washing windows isn’t even in the top 100 most dangerous professions," Bright said. "What happened in San Francisco ...is extremely rare." Read More...

SCIF Seeks to File 221 Page Third Amended Complaint in Drobot RICO Case
Wed, 20 May 2015 10:50:50 - Pacific Time
Last April, Michael Drobot filed a 15 page third-party complaint for equitable indemnity and declaratory relief against 22 doctors, health executives, chiropractors and a lawyer. Equitable indemnity says in theory that Drobot should not have to pay the State Fund, but if it ends up that he does, then he wants others to share the blame with him and pay the damages. Thus Drobot in his indemnity lawsuit is alleging that these 22 defendants are somehow involved in what the State Fund alleges he did. The lawsuit, in essence, says that if he has to pay any money to the State Fund, they should, also. So he has in effect implicated these entities and individuals.

Following Drobot's implication of his alleged co-conspirators, the Plaintiff in the RICO case against him, the State Compensation Insurance Fund, has now asked to file a 221 page Third Amended Complaint that asserts claims against those who were named by Drobot, and others who are similarly situated. The list of RICO defendants has now expanded to dozens of entities organized by roles such as Individual Defendants (page 21), Surgical, Pharmacy, and Administrative Defendants (page 22), Provider Defendants (page 29), Marketer Defendants (page 58), and just in case someone has been missed DOE Defendants, (page 60).

The 221 page complaint goes on to specify the "fraudulent schemes" allegedly perpetrated by each group of defendants between pages 64 and 115. If one were to write a treatise on methods to perpetrate medical fraud, these pages would be a good guide. Topics include "Lack of Licenses, Corporate Practice of Medicine, and Payment of Illegal Referral Fees" on the part of the Administrative Defendants, Individual Defendants and Provider Defendants, "Overbilling and Pricing Manipulation" on the part of the Pharmacy Defendants and some Provider Defendants, "Billing State Fund for Treatments and Services That Were the Product of Illegal Kickbacks and Referral Fees, Fraudulent Scheme to Overbill Services By Unbundling/Upcoding, Including Unbundling and Overbilling, Fraudulent Scheme re: Nurse Billing; Autologous Transfusion Billing; Duplicate Radiology Billing, Double-Billing of Prescriptions", and more.

The SCIF alleges that it has entered into settlement agreements with some of these defendants at the WCAB which it now seeks to rescind. In this regard it pleads "State Fund's investigation also led it to review certain settlement agreements State Fund entered with Defendants related to liens Defendants brought before the WCAB based on their billings to State Fund. State Fund was unaware of Defendants' pattern of racketeering activity and other misconduct when it entered into the settlement agreements with the Defendants named therein." Thus the SCIF seeks to unravel global settlement agreements it has made in the past with certain of these defendants, and recover sums that have already been paid in lien resolution agreements.

State Fund’s proposed Third Amended Complaint asserts claims directly against, among others, Dr. Faustino Bernadett, Jeffrey Catanzarite, Dr. Gerald Alexander, Dr. Jack Akmakjian, Dr. Ian Armstrong, Michael Barri, Dr. Mitchell Cohen, Alan Ivar, Edward Komberg, Dr. Randy Rosen, Dr. Lokesh Tantuwaya, Dr. Jacob Tauber, Dr. Assad Moheimani, and Jason Bernard, as well as entities associated with these individuals.

It is difficult for the SCIF to add up what all of the above cost in damages. Essentially it pleads in paragraph 398 that "Defendants have fraudulently received up to hundreds of millions of dollars from State Fund as a direct and proximate result of their unfair and unlawful practices." RICO statutes allow treble damages and attorney fees in addition to the hundreds of millions of dollars.

If State Fund’s motion for leave to amend its complaint is denied, State Fund says it intends to file a separate complaint against the parties named in its amended complaint. It says this "request has been made with diligence - State Fund moved quickly after being served with the Third-Party Complaint to perform due diligence on the new parties, research, draft, and file its proposed Third Amended Complaint." The motion is scheduled to be heard on June 15 in Courtroom 10D before federal judge Andrew Guilford. Read More...

Governor Brown Announces WCAB Appointments
Wed, 20 May 2015 10:50:44 - Pacific Time
Governor Edmund G. Brown Jr. announced the following appointments.

Deidra Lowe, 64, of Hillsborough, has been re-appointed to the California Workers’ Compensation Appeals Board, where she has served since 2008. Lowe was an attorney at Hanna, Brophy, MacLean, McAleer and Jensen from 1985 to 2008, house counsel at Metz, Johnson and Larson from 1981 to 1985 and an attorney at Green and Azevedo from 1979 to 1981. She earned a Juris Doctor degree from the University of the Pacific, McGeorge School of Law. This position requires Senate confirmation and the compensation is $134,591. Lowe is a Republican.

Jose Razo, 64, of San Mateo, has been appointed to the California Workers’ Compensation Appeals Board. Razo has been an associate attorney at Laughlin, Falbo, Levy and Moresi since 2006. He was a partner at Pasternak and Razo from 1981 to 2006 and an associate attorney at Garry, Dreyfus, McTernan and Walsh from 1978 to 1981 and at the Legal Aid Society of San Mateo County from 1977 to 1978. Mr. Razo earned received his BA from Stanford University in 1973 and his Juris Doctor degree from the University of San Diego, School of Law. This position requires Senate confirmation and the compensation is $134,591. Razo is a Democrat. Read More...

Past Week News Archive


Court of Appeal to Hear Another IMR Constitutional Challenge: Tue, 19 May 2015 09:05:49 - Pacific Time: Read More...


Public Hearing Set on Revisions to ASC Fee Schedule: Tue, 19 May 2015 09:05:39 - Pacific Time: Read More...


WCAB Upholds Validity of Untimely IMR: Mon, 18 May 2015 13:22:50 - Pacific Time: Read More...


DWC ’s Redding District Office Moves to New Location: Mon, 18 May 2015 13:22:44 - Pacific Time: Read More...


NCCI Publishes "Calm Now ... But Turbulence Ahead" National Comp Outlook: Fri, 15 May 2015 05:14:45 - Pacific Time: Read More...


Sting Nabs 9 Unlicensed and Uninsured Contractors: Fri, 15 May 2015 05:14:35 - Pacific Time: Read More...


Judge Dismisses Most of Closely Watched Suit Against Drugmakers: Thu, 14 May 2015 09:08:01 - Pacific Time: Read More...


Cal/OSHA Fines Construction Company: Thu, 14 May 2015 09:07:53 - Pacific Time: Read More...


Feds Pursue Bay Sleep Clinic for Fraud in Whilstleblower Case: Wed, 13 May 2015 11:21:02 - Pacific Time: Read More...


Legislature Takes Aim at Apportionment Rules - Again!: Wed, 13 May 2015 07:18:08 - Pacific Time: Read More...