Shanghai, China.......

Workerscompzone is traveling in Asia and will share some insights with you as I go......

Here by the side of the Huangpu River, in Shanghai's Pudong financial district, there's a stunning view from the observation deck of world's second tallest building (the Shanghai International Finance Center building). Just a few decades ago Shanghai's Pudong was farmland. Today the business district is probably as big as San Francisco's and L.A.'s combined.

Across the river is the old Bund district, with European style buildings fronting on the river, facing the busy barge traffic heading to and from the Yangtze. Beyond the Bund lies the Puxi area, home to the "concessions", areas of Shanghai that the Ching dynasty ceded to the British and French after losing the Opium Wars in the 1800s. It's here that one finds the trendy shops and bars that have long marked Shanghai as a world style center.

From the Pudong skyscrapers, construction can be seen everywhere. A few years ago Shanghai and Dubai were said to be the site of a large share of the world's construction cranes. That may be cooling in Dubai, but the jackhammers are pounding here as workerscompzone does this blog.

Some Americans may be holding tea parties, the Governor of Texas talks of secession, and California's unemployment rate now heads toward 12%. Maybe it's a good time to be abroad.

But here in China the economy is still growing, just not at the same torrid pace. If official figures are to be believed, quarterly GDP growth has dropped from around 14% several years ago to 6.1% in 1st Q. 2009. This is said to be the slowest growth pace since 1992. Coastal provinces with extensive manufacturing industries-such as Guandong province north of Hong Kong-are said to be hit particularly hard. Workers are being laid off as plants cut back or close, and workers are dispatched back to rural provinces all over China. An estimated 20 million rural migrants may have lost their job recently.

The export sector of the Chinese economy is under severe pressure.

I'm told that staffing firms are now providing departure planning services for some expats who had come here when the growth was unbridled. Urban registered unemployment was said to be 4.2% in 2008, but the figure could actually be around 9 to 10% acording to a government think tank, the Chinese Academy of Social Sciences.

In response, the Chinese government has offered a huge stimulus program. Many large infrastructure projects are under way. The government can fast track high speed rail and major road and subway projects.

Things that would take decades to do in California can be done in a few years here.

There are efforts to raise farmer's incomes and boost domestic consumption (yes, there is a Wal-Mart Super Center here in Shanghai). For example, the government is subsidizing rural resident purchases of appliances.

An ongoing concern has been the gap here between
the rural poor and the new business elite and urban middle class in Beijing and the coastal cities. This was detailed in a book "Will the Boat Sink the Water?":
http://www.nytimes.com/2006/08/07/books ... html?fta=y

Some are predicting a V shaped economic recovery here. Others, such as Tom Holland of Hong Kong's South China Morning Post, say that the recovery is at risk for turning into a W rather than a V.

The Chinese economic slowdown may be causing the government to go slow on closing ecologically unfriendly businesses and dirty factories:
http://www.nytimes.com/2009/04/19/world ... r=1&hp

China has its own Madoffs. On trial now is a 28 year old Chinese billionaire, Wu Ying. Until recently Wu was on China's list of richest people. Apparently within 10 years Wu managed to move from the foot massage parlor business into controlling a conglomerate worth billions, including hotels, department stores, and cafes. Now Wu is alleged to have defrauded investors to support her lavish lifestyle.

A quick glance at the papers show stories of prosecutions for share price manipulation and pyramid sales schemes. I guess Wall Street has no monopoly over those schemes. Certain things are just cross-cultural.

I'll be offering more in some upcoming blog posts from Beijing, Xian, and Hangzhou. Stay tuned.

But back to the USA.... The Chinese will continue producing tea. If there are more "tea parties" in the USA, the Chinese will meet the demand.

Is the USA going through some kind of fundamental cultural shift?

I found Peggy Noonan's piece in the Wall Street Journal to be provocative (she was Ronald Reagan's speechwriter). Here's the Noonan piece:
http://online.wsj.com/article/SB123992073614326997.html

Julius Young
www.boxerlaw.com

Greetings from Seoul. To be exact, the airport lounge at Incheon, South Korea's beautiful new airport, probably one of the world's nicest.

Workerscompzone is on the first leg of an Asian trip. I'm not here to do investigative journalism, but I'll blog (when I can) about some things I see.

The Korean economy has been struggling, with exports down 18% (not bad compared with the whopping 41% figures for Taiwan and China and 38% for Japan). GDP is expected to shrink by 2.4% here this year. The government has it's own stimulus here-$50 billion or more.

Tough times here, but the spicy salted octopus and OB beer will drown your sorrows.

California seems light years away. But let's review the past week....after all, it's been quite a week in the California workers' comp world.

The California Supreme Court heard arguments in the Smith and Amar cases. We'll soon know whether applicant attorneys have expanded rights to receive attorney fees for going to court over medical treatment disputes. These are cases that have scared the industry and excited applicant attorneys.

The Big Kahuna of the week was the WCAB's decision to reconsider the Ogilvie, Almaraz and Guzman cases. The community has been scrambling to predict what this portends. Some on the defense side were displeased, hoping instead that the 6th District Court of Appeal would get a crack at the Guzman case.

Others on the defense side saw a marketing opportunity and jumped on it with seminars. I love Billy Mays, Vince Offer and informercials, so who can complain? Surely you have a shamwow, so why not an Almaraz strategy?

Thanks to workcompcentral and the Workers Comp Executive, I'll be keeping up with comp goings on while I'm on the road. I'll bring you my insights when I can.

Meanwhile, got to go....some super spicy kimchee beckons.

Julius Young
www.boxerlaw.com

The WCAB has granted reconsideration in the Almaraz, Guzman and Ogilvie cases (see a link below post to today's en banc decisions).

In doing so, the WCAB has adopted a briefing schedule for the parties in each case to submit additional arguments.

Moreover, the WCAB announced that any interested person or entity may file an amicus brief in the cases. Today's en banc decisions specify the time limits (Friday May 1, 2009) and other briefing rules that have been set by the WCAB.

A concurring opinion by Commissioner Aghazarian notes that he would stay the legal effect of Ogilvie and the Almaraz and Guzman decisions.
Since the en banc decision does not provide for this, it appears that at the moment there is no stay in effect on application of Ogilvie and Almaraz/Guzman to pending cases.

Presumably today's action makes the Petition for Writ of Review filed at the 6th District Court of Appeal in Guzman moot.

In Ogilvie both the applicant and defendant had filed petitions for reconsideration. It's no surprise that the WCAB has granted reconsideration in that case and ordered that amicus briefs be allowed.

In Almaraz, SCIF had filed a Petition for Reconsideration. But the defendant in Guzman did not file a Petition for Reconsideration. Yet, the Board is granting recon in Guzman on its own motion. That makes great sense, as the result in Guzman and Almaraz depends on similar legal principles.

So while today's action may have come as a shock to some, it's not a big surprise to this observer.

The DIR's Director, John Duncan, had issued a call for such an approach.
My last blog entry, "Dear John" is a fantasy pen pal response to Mr. Duncan's letter to the WCAB (note that I doubt the WCAB's action was affected by Duncan's letter). You can see that post by clicking here:
http://workerscompzone.com/index.php?en ... 403-214931

The Almaraz recon order is here:
http://www.dir.ca.gov/wcab/EnBancdecisi ... il2009.pdf

The Ogilvie recon order is here:
http://www.dir.ca.gov/wcab/EnBancdecisi ... il2009.pdf

Stay tuned.

Julius Young
www.boxerlaw.com

A recent letter has generated lots of controversy in the California workers' comp community.

The March 26, 2009 letter from John Duncan, Director of California's Department of Industrial Relations was directed to the Commissioners of the Workers' Compensation Appeals Board. You can find the letter here:
http://www.dir.ca.gov/WCAB/WCAB_Decisio ... gilvie.pdf

Duncan, writing in his role as Administrator of the Uninsured Employers Benefits Trust and the Subsequent Injuries Benefits Trust Fund, requests the WCAB vacate therecent Almaraz/Guzman en banc rulings on its own motion. Duncan request that the WCAB reconsider the rulings and solicit argument from a broad range of workers comp system stakeholders.

In a Facebook world, workerscompzone doesn't have many old style pen pals. So why not start with Mr. Duncan?

Dear John:
As an observer of the comp world, it was good to hear from you.

Perhaps you're very active in the background on comp issues, but I can't recall hearing much from you on comp over the years. For a guy who stays out of the headlines, this was a major move.

Some folks must be pretty pissed off.

You've taken quite a bit of flak for your letter. Many critics, including CAAA, noted that your letter appeared to be an attempt by the Schwarzenegger administration to exert political pressure on the WCAB.
After all, the WCAB commissioners are political appointees. Your letter was right in their face.

You must be aware that SCIF, the defendant in the Almaraz case, is seeking reconsideration of the en banc ruling. And you surely are aware that the defendant in Guzman has filed a writ of review with the 6th District Court of Appeals in San Jose.

I'll concede that there are serious issues being raised by Almaraz/Guzman opponents. In a perfect world, perhaps the WCAB might have invited major stakeholders to brief the issues before issuing the Almaraz/Guzman en banc. This might have actually resulted in a stronger and more focused en banc decision. But that's done now.

One way or another, either the Board itself or some Court of Appeals will be looking at Almaraz and/or Guzman. Soon. Major system stakeholders will have plenty of chances to file amicus briefs either supporting or challenging the Almaraz/Guzman formulation.

That's why your letter was puzzling.

Surely you are aware that medical costs are by far the major factor
driving increased workers comp costs. That was documented yet again in the recent WCIRB report. Even the WCIRB noted that Almaraz/Guzman
would be responsible for about 1/4 of projected increased comp costs.

But we have heard not one peep from you about rising medical costs in the comp system. Your DWC underlings may be concerned, but your new pen pal has heard nothing from you on medical costs. Where's some evidence of your concern and leadership on that? You're delegating that issue, but getting involved in the Almaraz/Guzman controversy?

I'm scratching my head over that one.

Your letter claimed that the decisions had already had "substantial impact"..."on the administration of the workers' compensation adjudication system".

Hope you won't mind it if your new pen pal invites you to do lunch.
Not the Esquire Grill or Frank Fat's.

We can grab a mushroom burger and fries at the Oakland State Building cafeteria and then head up the the Oakland district office. I'll show you around, and introduce you to judges, defense attorneys, applicant attorneys and even some regular folks just waiting to have their case heard.

I suspect you'll get an earful about how much everyone despises your Department's EAMS paperless system. Scanners that don't work. Dispirited clerks who can't keep up with mounds of scanning. Lawyers and claimants who are facing long delays at getting hearings set.

But we've heard nothing from you about the less-than-stellar rollout of the EAMS adjudication system. Why the silence on that "substantial impact"?

We heard no public concern from you over the last few years as figures revealed that insurer profits were at record levels relative to benefits paid to or on behalf of disabled workers.

Mi pen pal amigo....If you're going to get publicly and directly involved in the system, I've got a lot of ideas for you. Let's look at those medical costs. And increasing loss adjustment expenses, which have risen as a percentage of comp premiums.

Let's look at doing something serious about uninsured employers and employer misclassification fraud. Let's even look at broker fees, which are substantial in the system.

Those are just a few of the things we can discuss as pen pals.

Maybe I'm old fashioned, but I still assume that you as Director of the Department of Industrial Relations are charged with fostering a system that works well to meet the needs of the working men and women of California.

But your letter strikes me as something that would have been written by Director of the California Department of Chamber of Commerce.

John, I see that attorney Bruce Sutherland (Ms. Guzman's attorney) wrote you. He made a good point. Some of the recent post SB 899 cases have shifted liability from insurance carriers to a fund you are charged with administering (the Subsequent Injuries Fund). But once again, nary a peep from you.

You're in a diffficult spot. Accused of trying to pressure an independent judiciary, you in no way want that stain on your record as your stewardship of the department ends next year. Perhaps you yourself were pushed to send the letter.

These are tricky economic times for everybody. I can understand that many of your friends are concerned about anything that increases the cost of doing business in this state. I can relate to that. I'm headed to Asia myself soon. I know California business has a tough time competing against many of those countries.

But you are also aware that the whole purpose of the compensation system is to compensate workers.

Compensate them adequately.

P.S. Don't forget that the statute requires you to consider revisions to the PDRS. Almaraz/ Guzman or not, the issue is not going away. With an election looming next year, some observers are starting to wonder whether your administration missed the boat in fashioning a compromise on PD.

That's about it for now. Love to hear from you. Nothing against Frank Fat's, but you'll like that mushroom burger, too.

Julius Young
www.boxerlaw.com

"Meatball justice". A "MASH unit". A "subbasement of the legal world".

"Forget about personal. They don't think of you as a person. They think of you as a file with a dollar sign on it. They don't care if you can't put food on the table or put braces on your daughter. You're thinking of this logically. I stopped thinking that way a long time ago. This is comp."

Sounds like a day at the Los Angeles WCAB or one of many other California Workers' Compensation Appeals Board district offices?

Could be. But these quotes are from this week's New York Times 3-part series on the state of New York's workers' comp system (links to the articles are at the bottom of this blog post)

Written by N.R. Kleinfield and Steven Greenhouse, the series highlights a workers' comp system in great disarray.

Delays are said to be rampant. Fines against insurers for infractions are small, and many insurers ignore fines for years. Doctors shy away from treating comp cases. "Trials" where the worker barely gets a chance to speak. Hack doctors who tailor their opinions to please the hand that feeds them. Workers whose lives are upended by the economic and social fallout from their injuries. Claims of fraud which are hard to quantify.

Recognize any of these as themes in the California workers' comp system?

But as bad as aspects of the system are here in California, the series paints a picture of an even more decrepit New York system. At least here in California we have what is-for the most part- a very able and concientious applicant attorney bar that seeks to advance the interests of disabled workers.

Read the series and compare the systems for yourself.

For years New York has had a system that was among the most expensive for business and yet stingiest for workers. Some changes were enacted under Elliot Spitzer before his call-girl debacle. But New York has a long way to go.

Thanks to the Times for doing such an in-depth investigation. Unfortunately, with newsroom staffs shrinking and the survival of many newspapers in doubt, this is the kind of piece that we may be seeing less and less of.

As a blogger, I strive to be fair and accurate (readers are invited to kick my butt if I get it wrong), but the blogosphere will never be able to do the kind of sustained muckraking that is evident in these articles:
"For Injured Workers, A Costly Legal Swamp"
http://www.nytimes.com/2009/03/31/nyreg ... &scp=4

and
"Exams of Injured Workers Fuel Mutual Mistrust"
http://www.nytimes.com/2009/04/01/nyreg ... amp;st=cse

and
"System to resolve Workplace Injury Leaves Ill Will On All Sides"
http://www.nytimes.com/2009/04/02/nyreg ... p.html?hpw

Julius Young
www.boxerlaw.com
(have a tip or information for the blog? you can e-mail it to me at jyoung@boxerlaw.com)