My golf game kinda sucks. I've been known to take a mulligan now and then. Thank goodness my golf buddies are okay with an occasional do-over.

But what about a court taking a mulligan? If, after rendering a decision in a case, the judges on a court change, should the court re-hear the case and adopt a different result? Even if this is technically legal, does it send an unpleasant signal that the court is a pawn in a game that is ultimately political? Legal historians and ethics professors might argue these points, but I'll not get sidetracked there.

My post yesterday announced that the California Workers' Compensation Appeals Board (WCAB) had reversed its earlier rulings in the Baglione and Pendergrass cases. At the bottom of this post, you can find the links to a pdf version of the latest rulings. Governor Schwarzenegger recently appointed longtime defense attorney Alfonso Moresi to fill the expired term of WCAB commissioner Merle Rabine. With Rabine gone, Moresi's vote tipped the vote in Baglione and Pendergrass from a 4-3 pro-worker result to a 4-3 pro-insurer result.

The insurers in Baglione and Pendergrass (who were "aggrieved" by Pendergrass "1" and Baglione "1" ) had chosen to file reconsideration appeals with the California WCAB rather than appeals with the California Court of Appeal. Worker attorneys will probably now appeal Pendergrass "2" and Baglione "2" to the Court of Appeal.

What is at stake? Baglione and Pendergrass involve disputes over which pre-2005 cases come under the "old" pre-Schwarzenegger comp reform rating system. Unless there is an administrative or legislative adjustment made in the rating schedule, injured workers covered under the 2005 rating system stand to receive less than 50% of what they would have otherwise received. Thus, Baglione and Pendergrass are a very big deal for workers injured before 2005. See the links below for a discussion of why this makes a difference to injured workers

To see the pdf version of Baglione, click the following:
http://www.dir.ca.gov/WCAB/EnBancdecisi ... 7-EB-4.pdf

To see the pdf version of Pendergrass, click the following:
http://www.dir.ca.gov/WCAB/EnBancdecisi ... 7-EB-5.pdf

To see my post on the effects of the 2005 rating system click the following:
http://www.dir.ca.gov/WCAB/EnBancdecisi ... 7-EB-5.pdf

And also see my post on "The Year of the Pig":
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

Stay tuned.

Julius Young
www.boxerlaw.com

Big news today in the California workers' comp world. The
statewide Workers' Compensation Appeals Board has taken a mulligan in 2 important cases, Pendergrass and Baglione.

This do-over is a result of a shift in the board occasioned by the retirement of WCAB commissioner Merle Rabine and Schwarzenegger's appointment of longtime defense attorney Alfonso Moresi to the WCAB.

I will describe this in much greater detail in my next post. The short version of the story? A big win for insurers, who will use these decisions to force lower settlements and awards. Check back tomorrow for details.

Julius Young
www.boxerlaw.com

Yesterday morning, the California Supreme Court heard oral arguments in the first case to reach the court involving the Schwarzenegger workers' comp reform, SB 899.

Actually, the court was hearing arguments in multiple cases. At issue in these cases (Welcher, Brodie and Dykes) are three formulas for compensating a worker for a later injury where there has been a prior percentage disability award. The Welcher formula (subtract percentages from percentages) favors insurers, while the Dykes formula (subtract dollars from dollars) is more worker-friendly. The Brodie court adopted something of a compromise.

These cases involve an important issue. But whatever the court does will have a significance far beyond the specific issue at hand. Welcher, Brodie and Dykes will probably result in the court sending an overall message as to how it intends to deal with ambiguities in SB 899, the Schwarzenegger comp reform.

SB 899 was literally passed in the middle of the night in the Spring of 2004 without active debate by the legislature. One thing almost all observers -- whether insurer or worker advocates -- agree on is that SB 899 is poorly drafted.

Will the court cite the perceived legislative intent to deal with a 2004 workers' comp "crisis" and resolve all ambiguities in favor of insurers?

Or will the court follow the doctrine that where there is ambiguity in the law, the Labor Code 3202 "liberal construction" in favor of the worker in California dictates the law be interpreted in a worker-friendly manner?

Both of these concepts were prominent in yesterday's oral argument. Apparently, Justice Joyce Kennard was particularly active in the oral argument. But experienced court watchers have cautioned against trying to read the tea leaves.

There are many other workers' comp issues percolating through the California appellate court system. The Supreme Court's approach in Welcher/Brodie/Dykes could tell us in short order how many of those issues will be resolved.

Stay tuned.

Julius Young
www.boxerlaw.com

2007 is flying by, and it is time for Workerscompzone to note the most significant events in California workers' comp during the first quarter of 2007 (caution: note that the law on some of the following is in flux and may change depending on further court decisions or legislative action).

In no particular order, these are the top 10 stories so far:

1. The California Supreme Court agrees to hear arguments in several cases dealing with the rules of "apportionment." The court hears those arguments this week in Los Angeles. The court is faced with at least three different Court of Appeal approaches (Brodie v. WCAB, Welcher v. WCAB and the Dykes case) to the question of whether insurers can subtract a prior percentage of disability from a later one or whether there are other appropriate formulas for deducting a prior disability from a later one.

2. The Schwarzenegger administration and the state agency known as CHWSC (also called "Cheese Whiz") unveil studies which confirm that the 2004 reforms resulted in permanent disability awards being slashed by 50% or more. To learn more, see my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

3. Court decisions are rendered on the issue of when the "new" 2005 Schwarzenegger schedule applies to pre-1/1/05 injuries, but many of those cases remain tied up in appeals which may establish the final rules. See my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

4. The Workers' Compensation Insurance Rating Bureau calls on Insurance Commissioner Steve Poizner to recommend an 11% reduction in workers' compensation rates. But insurer payouts to workers are only a fraction of total premium collected. See my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

5. A UCLA institute commissioned by the Schwarzenegger administration to study injured worker opinion on medical treatment revealed the results of its study. See my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

6. An important California Court of Appeal case (Dwight Smith v. WCAB) affirms that injured workers have the right to force the insurer to pay the worker's attorney fees incurred in enforcing a medical award. See my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

7. Governor Schwarzenegger appoints Alfonso Moresi as a member of the statewide Workers' Compensation Appeals Board, filling the slot of the termed out Merle Rabine, a Gray Davis appointee. See my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

8. The Schwarzenegger administration struggles to come up with a set of regulations on utilization review oversight. See my post as follows:
http://www.workerscompzone.com/index.ph ... 4e069ef8f9

9. The 2-year cap on temporary disability enacted as part of the 2004 SB 899 comp reform becomes a major issue in litigation and in the legislature. In an informational hearing held in March 2007 at the Assembly Insurance Committee, there was some indication that even some employers might support a change on this.

10. Turmoil at California's largest workers' comp carrier, the State Compensation Insurance Fund (SCIF). Several executives recently left the fund, California Insurance Commissioner Steve Poizner called for an audit of SCIF, and there will likely be legislative hearings on SCIF's governance. To read more, click here:
http://www.insurancejournal.com/news/we ... tm?print=1

In the 2nd quarter of 2007, look for major developments as the California Supreme Court decides the Brodie, Welcher and Dykes cases and as the Schwarzenegger administration unveils its plans for a revision of the permanent disability rating schedule.

Julius Young
www.boxerlaw.com

The rates California workers' comp insurers charge employers were deregulated in the early 1990s. Since then, the California Insurance Commissioner makes a non-binding recommendation on rates.

The rates recommended by the Insurance Commissioner often follow the recommendations of an industry group, the Workers' Compensation Insurance Rating Bureau of California, commonly known as the WCIRB.

On March 28, 2007, the WCIRB recommended that California workers' compensation rates drop by 11.3%. Insurance Commissioner Steve Poizner could adopt this recommendation or could make his own independent assessment. When John Garamendi was Insurance Commissioner, he did not always follow WCIRB recommendations. In any event, Poizner's decision is not binding on insurers, who are free to set their own pricing.

According to an article in today's Sacramento Bee by Gilbert Chan, if this cut is adopted, the total reductions in rates since 2003 would total 64%. Rates would be cut to $3.21 per $100 of payroll after having reached a high of $6.47 per $100 of payroll several years ago.

Keep in mind that not all these savings have been passed along to all employers. Many businesses have complained that they have not seen major savings after the 2003 and 2004 comp reforms.

And of the comp premiums collected, how much is being distributed to injured workers in different forms of benefits? WCIRB statistics for 2004 show that out of $23.6 billion collected in premiums, benefits to workers were paid in the amount of $8.5 billion, and $5.4 billion went towards insurer expenses. In 2004, that left profits for insurers of $9.7 billion. Shocking? A system designed to handle injured worker medical treatment and disability payments paid out only slightly more than a third of premiums collected. Carrier profits consumed more than 40% of premiums collected.

I'd call that a recipe for some serious structural reform. As they head into discussions this year of what employers can afford and what an adequate compensation system would look like, perhaps the regulators and politicians should consider some of these statistics.

Julius Young
www.boxerlaw.com