We are in a wilderness of mirrors.

It's hard to separate perception from reality.

$700 million bailout or not, our economy sails amongst a sea of icebergs.
The remaining leading investments banks, Goldman Sachs and Morgan Stanley, may still be in mortal danger.

Nouriel Roubini, Professor at NYU's business school, has predicted the mother of all bank runs as Asian and European investors and Mideast and Asian soverign funds decide to withdraw monies from American institutions in order to protect their exposure.

Insurer stocks dived on Senate Majority leader Harry Reid's comments that a major insurer is on the verge of bankruptcy. The link to this story is here:
http://money.cnn.com/2008/10/02/news/co ... /index.htm

Hedge fund failures could be the next iceberg.

Today there was word that a number of colleges and universities are in a panic because Wachovia (which failed and was taken over by Citigroup) has limited access to a $9.3 billion fund over which it served as trustee, the Connecticut based Commonfund.

A personal note: my grandfather, Charles Matton, ran the trust investment department as Wachovia Senior VP during the 50s and mid 60's at legacy Wachovia before theFirst Atlanta and First Union mergers. My grandmother's nephew, John Watlington, was President of Wachovia for about 20 years as it became the largest bank in the Southeast. The demise of the bank is a sentimental journey for me.

But back to the situation at hand.

Perhaps the bailout vote tomorrow will stanch these concerns for the moment, and help pull us out of the deep dive we are in.

Overleveraged as they may be, mom and pop may not be all that concerned at the moment. But they have not yet seen their credit card rejected or their equity line canceled. They have not seen half of the stores in the mall go dark. There's a bit of unreality to it all.

More than one client of mine has recently rejected settlement deals which would have provided them with significant amounts of cash.

Perhaps cash is not king. We shall see.

In the workers comp world, many of us think we are immune. As a creature of statute, benefits are payable.

Workers assume that insurers will not go under. Attorneys assume that CIGA will resolve problems if carriers do fail.

They may all be right. We hope so.

Here is a link to the Wachovia/Commonfund story:
http://www.nytimes.com/2008/10/02/educa ... ref=slogin

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right corner of the coulmn under "Most Recent Entries")

Governor Schwarzenegger vetoed several workers' comp bills yesterday.
It was the last day he had to act on the bills.

At the bottom of this post I have links to the Governor's veto messages on the bills.

SB 1515 was vetoed. This bill, carried by Senator Carole Migden, would have prohibited discrimination in application of apportionment statutes.

The bill to raise permanent partial disability benefits, SB 1717 (Perata), was also vetoed. Notably, the veto message made no mention of the draft proposal for a small 2009 revision to the PD schedule which is currently under consideration. Instead, the veto message mentioned the Governor's concern about the impact of rising medical costs on the comp system.

In what will be a surprise to many, AB 2081 (Coto) was vetoed. This bill recieved input from a number of parties from the insurer and employer community. Among people I spoke to, there was belief that the bill had sufficient support for the Governor to support it. The bill would have reduced the likelihood of kickbacks or other inducements in utilization review, among other things. The history and analysis of this bill can be seen here:
http://leginfo.ca.gov/cgi-bin/postquery ... uthor=coto

AB 2969 (Lieber) was vetoed. This bill would have required that utilization review physicians be California licensed.

Also vetoed was AB 419 (Lieber), a bill dealing with 4850 entitlement pay to certain specified safety officers:
http://leginfo.ca.gov/pub/07-08/bill/as ... floor.html

The SB 1515 veto message can be found here:
http://gov.ca.gov/pdf/press/SB1115_Migd ... essage.pdf

The SB 1717 veto message can be found here:
http://gov.ca.gov/pdf/press/SB1717_Pera ... essage.pdf

The AB 2081 veto message can be seen here:
http://gov.ca.gov/pdf/press/AB2081_Coto ... essage.pdf

The AB 2969 veto message can be found here:
http://gov.ca.gov/pdf/press/AB2969_Lieb ... essage.pdf

If there was any lingering doubt, Governor Schwarzenegger takes all his cues from California business interests.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button at the lower right corner of the column under "Most Recent Entries")

The Workers' Compensation Section of the California State Bar honored four distinguished workers compensation veterans in ceremonies in Monterey on Friday.

The award for distinguished lifetime achievement was given to Dennis Hannigan, deputy commissioner of the Workers' Compensation Appeals Board. Hannigan has served for many years in a staff post with the WCAB, often writing decisions and sometimes serving on WCAB decision panels in his deputy commissioner role. Known for his integrity and encyclopedic knowledge of California workers' comp, Hannigan has truly served the people of California with excellence as a public servant.

Judge of the Year award went to Joel Harter of Sacramento. Harter has been the presiding judge in Sacramento and, with Court administrator Kevin Star on military furlough, is currently assigned to the EAMS project, a big undertaking at the moment. EAMS is either off to a good or a rocky start depending on whom you talk to.

Named defense attorney of the year was Jim Libien of the Laughin, Falbo Levy and Moresi office in Oakland. Libien has been a leader in the San Francisco Bay area workers' comp community for years. A straight-shooting, "old-school" kind of guy, Libien has eschewed the sort of scorched earth litigation style that has made its way into some California workers' comp firms. Liben has always been able to see the need for dignity in the comp litigation process, has promoted collegiality among members of the bar, and has been able to recognize that workers' comp is a benefit delivery system, not a civil litigation system.

The applicant attorney of the year award went to Linda Atcherley of San Diego. Atcherley has worker her heart out over the last few years on behalf of disabled workers. In 2007 she served as President of the California Applicants Attorneys Association. In 2008 she has served as
legislative committee chairperson for CAAA. Atcherley gave both posts her all, spending untold hours in Sacramento hearings and other comp-related meetings up and down the state.

I found myself standing at the awards event, looking out the windows at fog rolling off Monterey Bay, listening to their acceptance speeches as
a who's who of movers and shakers in the California "comp community" watched and applauded. The common theme was apparent: all four of these individuals had a commitment to the integrity of the law and the comp judicial process.

The "comp community" should be proud.

A sad note: attorney Steve Jiminez of Oakland suddenly passed away this year. A stalwart member of the Workers' Comp Executive Committee of the California Bar, Jimenez was destined for greater things before his passing. The California bar awards are now known as the Steve Jimenez Memorial Special recognition awards.

Stay tuned. Governor Schwarzenegger only has a couple more days to act on a number of workers' comp bills which are on his desk. I'll be covering that story.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most Recent Entries")

Within the next few days it's likely that Governor Schwarzenegger will be exercising his veto on workers' comp bills on his desk.

Bills he will probably veto deal with a permanent disability increase, requirements that utilization review doctors be licensed in California, and prohibitions against discrimination in apportionment.

Meanwhile, the Governor has already exercised his veto pen to nix funding for the Miguel Contreras Labor Program which is the umbrella for the UCLA Center for Research On Labor and Employment, the UCLA Center for Labor Research and Education, the UC Berkeley Center for Labor Research and Education, and the UC Berkeley Institute for Research on Labor and Employment.

Until 2000, those programs (with a budget of around $6 million) were funded out of the budget of the UC universities where they are located.

In 2004-05 their funding was reduced. The following year, Schwarzenegger used a line item veto to nix their funding. UC redirected some monies to keep the institutes running, and in the 2006 state budget funding was restored.

These think tanks have long been a target of criticism from conservative and business groups who are hostile to organized labor.

But these institutes perform a valuable function, doing research into issues that concern working men and women in California.

The link to the UC Miguel Contreras Program can be found here:
http://www.ucop.edu/research/contreras/

The link to the Berkeley Institute can be seen here:
http://www.iir.berkeley.edu/faculty/

Efforts will undoubtedly be made to restore the funding or find other funding. But Schwarzenegger's selection of the UC labor institutes for defunding can be seen as nothing but punitive.

Once again, a tone deaf Governor has stuck his finger in the eye of California's working men and women.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column below "Most Recent Entries")

Word came late Tuesday that the FBI is investigating possible fraud at AIG {as well as at Lehman Brothers, Fannie Mae and Freddie Mac).

And late Tuesday AIG announced that it has signed a deal with the Federal Reserve Bank of New York. The terms give the U.S. taxpayer preferred shares in AIG.

Here's a link to a good analysis of the AIG arrangement that just appeared on the New York Times online (writtten by Steven M. Davidoff):
http://dealbook.blogs.nytimes.com/2008/ ... kes-shape/

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column below "Most Recent Entries")