Tag: 2014 News

A new California Workers’ Compensation Institute (CWCI) analysis of closed and resolved work injury claims from accident years 2005 through 2010 finds that statewide, attorneys were involved in 11.6 percent of all claims (including medical-only cases), 38 percent of lost-time claims and 80 percent of permanent disability claims. The study also confirms that the area in and around Los Angeles remains a hotbed for California workers’ compensation litigation, especially compared to Northern California — including San Francisco and most of the Bay Area — where attorney involvement rates on lost-time claims are nearly 15 percentage points lower.

Medical-only claims make up about 75 percent of all California workers’ comp claims, but because less than 2 percent of them involve an attorney, and those that do account for less than 1 percent of workers’ comp benefits statewide, the Institute study focuses on a sample of 262,490 closed and resolved indemnity claims with 2005 through 2010 injury dates. These claims, all of which involved either temporary and/or permanent disability payments, accounted for $7.6 billion in total payments – nearly $7.1 billion in medical and indemnity benefits, and another $523 million in allocated loss adjustment expenses (ALAE). A total of 99,913 (38.1 percent) of these indemnity claims involved an applicant attorney, a defense attorney, or both, with paid benefits and expenses on those claims averaging $62,652 ($57,679 benefits + $4,973 ALAE ) which translates to $6.26 billion, or 82 percent of all payments in the indemnity claim sample.

Though the attorney involvement rate for closed and resolved indemnity claims statewide was 38 percent, as in past studies, litigation was more prevalent in the Los Angeles Basin, where 46 percent of all lost-time cases in Los Angeles County involved an attorney. The attorney involvement rate also was above the statewide level in Orange County, Ventura/Santa Barbara/San Luis Obispo Counties, and in the Inland Empire, though it was slightly below the statewide rate in San Diego. In comparison, attorneys were involved in 34 percent of similar cases in San Jose, which was the highest rate in Northern California, while the rate for rest of the Bay Area was 31.4 percent, well below the statewide rate. Limiting the analysis to just permanent disability (PD) claims, the study found attorney involvement rates ranging from a low of 75.2 percent of the Bay Area PD claims to 83.8 percent of the PD claims in Los Angeles County. The study also found Orange and Los Angeles Counties and the Inland Empire have the lowest closure rate for attorney involvement claims in the state, while average claim costs are among the highest.

CWCI has published more details, including regional data on attorney involvement rates, claim payments and closure rates in a report, “Attorney Involvement in California Workers’ Compensation, AY 2005-2010”, which is available to CWCI members and nonmember subscribers who log in to the Institute’s website at www.cwci.org.

A psychologist apologized in a Los Angeles federal court for defrauding the federal government with inflated and fraudulent workers compensation claims.

The indictment handed down June 8, 2011 charged clinical psychologist Arnold P. Nerenberg, co-founder of the Whittier-based World Legion of Power bodybuilding organization, with seven counts of mail fraud. The indictment alleged that from June 2000 through April 2008, he submitted fraudulent paperwork to obtain compensation for psychological conditions that were never diagnosed and were reimbursed for medical expenses that were never incurred. According to court documents, Nerenberg billed the U.S. Postal Service for nearly $1 million in bogus medical fees and received about half of that. Also charged in the case are two ex-postal workers, Lois L. Washington, 47, of Inglewood, and Cetric T. Fletcher, 51, of Long Beach. Fletcher allegedly pocketed more than $200,000 as a result of the scheme, while Washington allegedly made more than $145,000.

In some instances, Nerenberg allegedly billed the government for treatment sessions with Washington and Fletcher when records indicate the psychologist was out of the area or out of the country. According to court documents, one of his “patients” was actually an HSI undercover agent posing as a postal worker for whom Nerenberg secured disability pay from the Department of Labor based upon his claimed acute fear of dogs.

Nerenberg said he was grateful federal agents caught him. In an emotional speech, the 72-year-old told the judge he overbilled patients whose costs were covered by the government so he could treat those who could not pay. After his arrest, Nerenberg said a friend told him: “It’s too bad you got caught.” He said he disagreed. “I think it’s too bad I committed the crime. I’m grateful I got caught,” Nerenberg said. “I wanted to stop what I was doing, but I was caught in an inner struggle. … I was grateful for the vigorous federal intervention.”

In an agreement with prosecutors, Nerenberg pleaded guilty to one count of fraud. Six other counts were dismissed. He was sentenced to five years’ probation with the first 12 months on home confinement and electronic monitoring. He also must pay restitution of $172,754. The two ex-postal workers indicted with Nerenberg in the 2011 case reached plea agreements and were sentenced earlier to probation and restitution.

U.S. District Judge Christina A. Snyder said she considered letters from Nerenberg’s family and friends in deciding his sentence. The prosecutor, Assistant U.S. Attorney Rozella Oliver, said she was persuaded that there were mitigating factors weighing in Nerenberg’s favor. She agreed home confinement was an appropriate sentence. “Dr. Nerenberg has done far more good than harm,” said his attorney, who noted that former patients were in the courtroom to support him. She said he had suffered public humiliation and would probably lose his medical license. “My remorse is profound,” said Nerenberg, who spoke of his pain when agents went to interview his former patients. “They came to me for healing, and the harm that came to them – I just couldn’t face it,” he said, his voice breaking. Nerenberg said he is turning his life around, concluding, “I have not always lived with honor, but I will die with honor.”

The judge said she was impressed with Nerenberg’s remarks and felt he was sincerely sorry. “But this is a very serious crime, defrauding the government of $172,000, whether with good or bad intentions,” Snyder said. She then imposed his sentence.

The California Board of Psychology records do not reflect any disciplinary action against Nerenberg. His license is currently active.

In this Longshore and Harbor Workers’ Compensation Act (LHWCA) case, Rick Carter injured his back and neck at work in 1991, and he has been permanently totally disabled since October 1, 1993. In 1996, the parties entered stipulations, and the ALJ awarded Carter disability and medical benefits based on those stipulations. In this protracted case, litigation has continued over disputes involving post award issues.

In the current dispute, Rick Carter appeals to the 9th Circuit Court of Appeals in California from the district court’s order awarding him $14,268.50 in attorneys’ fees and costs on his fee petition in the amount of $22,585.The district court’s selection of a blended hourly rate of $400, combined with its reduction in the number of compensable hours by almost half, from 60.9 to 35 hours, resulted in Carter receiving a 27 percent reduction in fees: from $22,585 to $14,268.50. Carter contends on appeal that the district court erred as a matter of law by reducing the fee award without sufficiently explaining its rationale for the reduction.

The panel in the published opinion of Carter v Caleb Brett LLC held that the district court erred as a matter of law by reducing the fee award without sufficiently explaining its rationale for the reduction. The panel vacated the district court’s order awarding attorneys’ fees and costs, and remanded for the district court to articulate the basis for its fee determination with greater specificity.

When determining a reasonable fee award under a federal fee-shifting statute such as the Longshore Act, a district court must first calculate the lodestar by multiplying the “number of hours reasonably expended . . . by [the] reasonable hourly rate.” This Circuit requires that courts reach attorneys’ fee decisions by considering some or all of twelve relevant criteria set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975). The Kerr factors are (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

A mere statement that a court has considered the Kerr guidelines does not make a decision within the court’s discretion. Rather, the court must “articulate with sufficient clarity the manner in which it makes its determination.” While detailed calculations are not mandated, “something more than a bald, unsupported amount is necessary” to affirm an award of attorneys’ fees. As a general rule, a fee-awarding court that makes a substantial reduction in either documented time or authenticated rates should offer reasonably explicit findings.” The district court must also “explain how it arrived at its determination with sufficient specificity to permit an appellate court to determine whether the district court abused its discretion in the way the analysis was undertaken.”

The district court’s selection of a blended hourly rate of $400, combined with its reduction in the number of compensable hours by almost half, from 60.9 to 35 hours, resulted in Carter receiving a 27 percent reduction in fees: from $22,585 to $14,268.50. In its fee order, the district court identified the twelve Kerr factors and mentioned two that it considered most relevant: (1) “the disproportionate relationship between the amount of fees incurred($22.585.00) and the amount at stake in the litigation ($3,220.20)”; and (2) that “Carter [did] not bear primary responsibility for the fact that this matter became considerably more protracted than the ‘quick and inexpensive mechanism’ envisioned by the statute.” Beyond that very brief discussion, however, the district court offered no other analysis before concluding that “[u]nder the circumstances here, for purposes of fee-shifting, 35 hours of attorney time at a blended hourly rate of $400 is reasonable.”

The Court concluded that the district court did not explain its decision to reduce Carter’s fee request with sufficient specificity to allow it to review the reasonableness of the fee award.

Last fall, the National Football League scored a huge victory in California, helping push through a new law barring most professional athletes from filing workers’ compensation claims in the state. The NFL, successfully lobbied the state legislature to pass AB 1309, which prohibits athletes who spent most of their careers playing for teams outside California from filing claims in the state. The leagues believed the law could save them from exposure to countless claims from injured athletes. But that win has come at a cost.

The Los Angeles Times reports that publicity from a high-profile battle over the legislation prompted players from around the country to file more than 1,000 injury claims just prior to a September deadline – a huge influx that could cost the nation’s top professional sports leagues hundreds of millions of dollars to resolve. In the first two weeks of September, current and retired players filed 569 claims against NFL franchises, 283 claims against Major League Baseball clubs, 113 against National Hockey League teams and 79 against NBA squads. Nearly 70% of the filings include allegations of head or brain injuries caused by repetitive trauma. Most of these athletes appeared to have never played for a California team; they filed claims based on repetitive injuries they say were sustained in part during road games played in the state. It is those claims that are now barred under the new California law.

Among the athletes rushing to beat the deadline were sports legends such as Miami Dolphins quarterback Dan Marino, Baltimore Orioles pitcher Jim Palmer and Houston Rockets center Hakeem Olajuwon, as well as many lesser-known retirees, some suffering serious physical impairment. A number of active players, including San Francisco 49ers standouts Michael Crabtree and Frank Gore, also filed claims.

The six sports leagues affected by the new law – a group that includes Major League Soccer and the Women’s NBA – had predicted a jump in filings before the deadline. Still, the size of the increase was surprising. The volume of claims in September was about 10 times higher than average monthly levels since 2011. The workers’ compensation data highlights the huge scale of the injury legacy that confronts American professional sports franchises. More than a third of the final batch of claims lodged before the new statute became effective Sept. 15 wouldn’t have been affected by the new law, the Times analysis found. Advocates for injured athletes say that the months-long fight over the bill, which drew national attention, helped alert athletes who otherwise wouldn’t have known they could seek benefits.

More than three-quarters of the claims filed against NFL teams in the first two weeks of September alleged head or brain injury. Half of baseball players and just over 90% of hockey players made similar claims. An NFL study of past filings found that the average California claim cost teams $215,000 to resolve, a number that could be far higher for players with debilitating brain disease. Unlike other states, California long permitted claims from players who did not play for in-state teams so long as they participated in at least one game or practice here. California also recognizes cumulative injuries incurred over time. And although California has a one-year statute of limitations for claims, that restriction is waived when workers aren’t properly notified of their right to file, which was the case with many players for decades. As a result, many athletes with slow-to-develop disease such as dementia turned to California when legal doors in other states had long been shut.

In anticipation of that deadline, workers’ compensation attorneys scrambled to find players and file on their behalf. San Diego lawyer Ron Mix squeezed in almost 300 athlete cases in the final month, according to state data. To get through the mountain of paperwork, he said he paid his staff triple overtime and hired numerous temp workers. “We were working 12 to 16 hours a day, seven days a week,” said Mix, a former Hall of Fame lineman for the San Diego Chargers.

The Times analysis showed that 363 of the 1,064 claims made in the first two weeks of September listed a California-based team as the employer, indicating they likely didn’t need to beat the Sept. 15 deadline. In addition, a number of still-active players filed injury claims, something that rarely occurred in the past because players feared being cut by their teams.

“Everyone wanted to beat the deadline,” said Mel Owens, a Laguna Hills attorney and former Los Angeles Ram linebacker. He filed more than 250 claims for athletes in the final push, according to the analysis.

Overall, between February, when the bill was introduced, and Sept. 15, a total of 1,980 athlete claims were filed in California – compared to 1,170 in all of 2012. More claims were filed in that nine-month period than any other year, by far, the analysis found. Although it’s impossible to determine how many athletes will be barred from filing under AB 1309, attorney Mix estimates it could top 4,000. In recent months, he said he’s gotten calls from about 150 athletes that he had to turn away because they missed the deadline.

While working as a deputy sheriff for the Nevada County Sheriff’s Department in mid-August 2011, David Lade injured his right shoulder. At the time of his injury, Lade was working a night shift schedule that entitled him to 5 percent shift differential pay. He had been earning the shift differential since 2004, and the differential was paid regardless of whether he worked, took vacation, used sick leave, or received holiday pay.

He was returned to regular work, but in late January 2012 Lade was placed on modified duty at the direction of his physician. From then until he had surgery in early March, Lade worked light duty on the day shift. From the date of his surgery Lade was again off work. In late April, he returned to work full time but remained on modified duty. Sheriff’s deputies on light duty are typically assigned to the day shift, and Lade was no exception.

While Lade was off work, he apparently received his regular full pay, including the 5 percent shift differential. While he was working on the day shift, however, Lade was not paid the differential. In November 2012, the parties went to trial on whether section 4850 entitled Lade to the shift differential while he was working modified duty on the day shift. As relevant here, section 4850 provides that whenever a sheriff’s deputy “who is employed on a regular, full-time basis, and is disabled, whether temporarily or permanently, by injury or illness arising out of and in the course of his or her duties, he or she shall become entitled, regardless of his or her period of service . . . to a leave of absence while so disabled without loss of salary in lieu of temporary disability payments . . . , if any, that would be payable under this chapter, for the period of the disability, but not exceeding one year, or until that earlier date as he or she is retired on permanent disability pension, and is actually receiving disability pension payments, or advanced disability pension payments pursuant to Section 4850.3.” (§ 4850, subds. (a), (b)(4).)

The WCJ decided that Lade was entitled to the shift differential. Relying on Johnson v. Contra Costa County Fire Protection Dist. (1972) 23 Cal.App.3d 868, the WCJ reasoned that the county “could not change Officer Lade’s status [from night shift to day shift] for purposes of [section] 4850 so as to avoid indemnification for the shift pay.” The county petitioned the board for reconsideration, arguing (among other things) that the WCJ erred “in granting Labor Code [section] 4850 ‘leave of absence’ benefits while [Lade] was not on a leave of absence and in fact [was] working modified duty.” Adopting the report and recommendation of the WCJ, the board denied reconsideration.

The Court of Appeal reversed the WCAB in the published opinion of County of Nevada v WCAB and David Lade.

The Court of Appeal rejected Lade’s argument stating “We do not believe section 4850 is reasonably susceptible to the interpretation Lade advances” citing Collins v. County of Los Angeles (1976) 55 Cal.App.3d 594. “Here, the Legislature provided that a public safety worker like Lade, when disabled, is entitled to a leave of absence at full salary instead of temporary disability payments. There is nothing in section 4850 that guarantees a worker anything when he is no longer on a leave of absence and is instead back at work. Moreover, there is nothing in section 4850 that can be reasonably understood to mean that a leave of absence is anything less than being absent from one’s employment.”

The WCAB order denying reconsideration was annulled, and the matter was remanded.