Lien Fiesta Update

Wednesday, May 26, 2010 | 1

Editor's note: This column addresses the Workers' Compensation Appeals Board's first "Lien Fiesta," held May 12 in Los Angeles. The Los Angeles board held its second "Lien Fiesta" on May 20, which is the subject of a news report by WorkCompCentral that appears in the sidebar at right.

By Zachary H. Sacks
Sacks & Zolonz

No one who deals with workers’ compensation litigation in Southern California or even that other, completely different nation; Northern California, is unfamiliar with the problem of liens and their clogging impact on the system. For a time at many of the Appeals Boards the lien conferences and lien trials outnumbered the legal appearances on other aspects of the cases and what we had was the tail wagging the dog.

In an effort to change this anomaly and to free up the orderly progress of the system Judge Jorja Frank, presiding judge of the Los Angeles Workers’ Compensation Appeals Board, established a “Lien Fiesta” day at which hundreds of lien representatives and attorneys were to attempt mass adjudication during the first of three court sessions over a two month span.

Involved were approximately 1,500 cases with multiple liens per case with the concept that if you could get all the usual suspects together in the same room multiple liens on multiple cases could get resolved at once, thereby diminishing the conference and trial time for all the parties. The court estimated a savings of at least 900 hours of staff time and a shortening of the wait to get a trial date to 45 days or so. The staggering statistics which preceded this move was the fact that lien cases decided by the WCAB topped out over 35,000 in 2007 alone, with unresolved cases exceeding…are you ready?...one-half million, and that was just the lien aspect!

So how did the first of the three days work out?  Obviously this office was and will be an enthusiastic participant in all sessions so we wanted to provide to our clients a perspective of what it was actually like on day one of three of “Lien Fiesta.”

Our attorney, Steven Lodge, has provided this impression:

 “Observations from the WCAB-Los Angeles 5-12-10 'Lien Fiesta'”

It was billed as a “Lien Fiesta”, but I’m not sure why the conference was labeled a fiesta as it bore no resemblance to any fiesta I’ve been to. I would describe it more like a combination of speed-dating meets the floor of the New York Stock Exchange in the midst of a market collapse.

To honor the occasion, the massive Carmel room, with dimensions not unlike a large ballroom, was decorated with some serapes draped over tables and a few sombreros pinned to the wall.  So much for the Fiesta aspect.

The Setup

The Carmel room had conference tables lining the front and side walls in a U-shaped configuration with letters from A to Z on placards taped on top of the tables from one end to the other. The center of the room filled in with additional tables designated as either defense attorney or lien claimant sitting posts. I should point out that in view of the magnitude of lien conference cases set for the day, the Board must have solicited assistance from the compensation community since the check-in tables were manned by quite a few judge pro tems.  Curiously, an overwhelming number of JPTs were applicant counsel, and with their fees approved by the WCAB judges it was certainly a politically correct move.

The Process

Checking in was relatively straight forward. You simply went along the walls looking for the table that had the letter representing the first letter of the last name of the case you were on for the day.  Once your appropriate table had been located, preprinted Minutes were handed over for official sign in.  At that point, a clerk issued you a 2 inch by 2 inch sticker with an alpha-numeric code to be proudly worn on your chest.  In theory, lien claimants would check in, note the alpha-numeric code for the case they were on, and seek defense counsel wearing their coded stickers who were patiently waiting at the defense tables.
                     
The Outcome…Houston, We Have a Problem

I then took my seat and waited. And waited. The occasional lien rep would scurry up to the check in table, beaming with pride with lien stip in hand seeking an order for payment.

I will tell you that from my perspective, the only difference that I noticed from the typical lien conference was that lien claimants were merely floating from defense table to defense table instead of the usual jaunt from court room to court room. That wouldn’t be such a bad idea were it not for the fact that the average lien claimant appeared to be present on at least five or six cases.

And that was the average. I had one lien claimant approach me wearing enough stickers to completely cover both sides of his chest. He looked liked General Patton or any other vastly decorated military officer, and he didn’t get to me until two hours into the process with the opening line of: “Hi, my name is Fernando, and I represent Downey Orthopedic. Here are our bills, and we are demanding $14,000 for resolution today.”  And thus began the horse trading between claimant and counsel not unlike any other day.

Shortly after an unsuccessful attempt to resolve Fernando’s lien, I decided to abandon my table and start looking for the lien claimants instead of the other way around. It was clear that had I not done so I would have been sitting around doing nothing until the close of the day. It wasn’t long before the table waiting process dissolved and all parties followed suit. Thereafter, chaos reigned supreme.

Disposition

For those liens and cases that did not settle, the JPT issued preprinted Minutes reflecting a lien conference on June 17, 2010.  If liens do not settle at that conference a trial date will be issued one to two months later. Along with the June 17 date, the board also issued a preprinted order requiring defendants to serve on all lien claimants within 20 days of the lien fiesta all documentary evidence that will be used in trial to defend against liens.

Conclusion

For the sake of the board, I hope the Fiesta made headway in the quest to resolve, reduce and remove liens from the calendar. From my experience today, and as mirrored by the experience of other defense attorneys who were there, not a lot was accomplished by this attempt, however ambitious and well intentioned it was.

I’m sure we’ll hear from the board very soon regarding the results of the conference. For me and probably other defense counsel it was business as usual: lien claimants thrusting papers in my face demanding money where in most cases none was owed because payments had been made per the official fee schedule. Whether this first ever effort will still be considered a Lien Fiesta or a Lien Fiasco, however, remains to be seen.”

As we in this firm have always maintained, the key to success with lien claimants is to start early to negotiate and dispose of their claims, get the non-MPN notices out and provide them to counsel, get the proper objections in timely, get the EOBs where and whenever available and have settlement authority from the client always before any appearance and early on in the negotiations.   In the event all of that does not work, as long as we have our lien expert ready to testify at trial we are ready to go as a last resort. We remain quite aware that file duration statistics include lien litigation to final closure. We all know that a closed file is a happy file. All participants in the system remain concerned by the effect that the delay in resolution of medical provider billings has upon the system. All agree that something has to be done.

Zachary H. Sacks is managing partner for Sacks & Zolonz LLP, a workers' compensation defense law firm with offices in Los Angeles and Rancho Cucamonga.