On November 4, 2010 Judge Frank, with the assistance of DWC Associate Chief Judge Mark Kahn, and with Court Administrator Kevin Starr in attendance, held a follow-up hearing at the WCAB in Los Angeles in connection with her notice of intent to consolidate liens involving compound pharmaceuticals and topical medications. The second hearing was scheduled after the initial hearing on October 6, 2010 when the workers’ compensation community was asked to submit petitions for consolidation of such liens and oppositions to the requests for consolidation.
Since the last hearing at least eight insurance carriers including State Compensation Insurance Fund, one group of self-insurers and CIGA have filed petitions for consolidation. A nearly equal number of lien claimants have filed oppositions in one form or another, some of which were filed under separate names but as affiliated companies (for example, California Pharmacy Management with NCL Pharmaceuticals and RX Funding with Landmark Medical Management). The petitions for consolidation will be separately handled by Judge Kahn who will be scheduling initial hearing dates to endeavor to determine common issues of law and fact and parameters for the lien claims to be considered. Future petitions for consolidation will have to be filed in accordance with the precise rules and procedures and served on the Court Administrator. No defendant will be prejudiced by not having waited until now to file a petition for consolidation.
The parties that have filed petitions and those that have opposed them are being given dates for initial hearings to address whether or not there are common issues of law and fact that can be included in a consolidation hearing. The lien claimants have generally asserted that there are none, apparently preferring their current approach of "divide and conquer". At this point no decision has been made whether any party’s petition to consolidate will be granted or denied.
Judge Frank will continue to oversee the Los Angeles District Office cases involving parties that have not filed petitions for consolidation. It appears that her plan is to bring those parties back to the Board to commence informal discussions relating to their cases. Given the limitations of staffing and available judges, it is probable that Judge Frank will seek to "encourage" defendants and lien claimants to enter into global settlements. Global settlement negotiations do not necessarily have to be limited to lien claims filed in Los Angeles . The next hearing on the subject has been scheduled for 1/18/11 at 10:00 AM at the Los Angeles District office.
What This Means for You
GMK believes that it is now appropriate to file a petition for consolidation concerning compound pharmaceutical and topical medication liens. Those defendants that prefer to litigate compound pharmaceutical and topical medication liens have three options: pursue consolidation; enter into global settlement agreements with each lien claimant; litigate liens on a case-by-case basis which, according to the Board, could take many years given lack of adequate staffing and available judges. It appears that the common issues of law and fact are being sufficiently narrowed so that pursuing resolution of these liens by consolidation should be more cost-efficient than litigating liens on a case-by-case basis.
© Copyright 2010 Goldman, Magdalin & Krikes, LLP. All rights reserved. Reprinted with permission.