AIG Reaches For Its Wallet to Cover $4.1 Billion in Work Comp Claims and Asbestos Liabilities

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The American International Group (AIG), the huge insurance company that the US Government bailed out financially, is still hard pressed to raise funds to cover on going claims. AIG has announced that it will need to raise another $4.1 Billion dollars to cover such costs as primary and excess workers' compensation claims and asbestos liability claims.

AIG's long and troubled history was the subject of investigative reporting in the Academy Award nominated film, Inside Job. The Many factors have impact on an insurance company's solvency including the ability to collect premiums in a down economic cycle, the investment of the premiums collected and colateral bad investments the have a massive economic impact of the financial worth of the company in general.

Workers' compensation claims continue despite  a low employment cycle. Latent diseases, such as asbestos related lung cancer, asbestosis and mesothelioma, may be dormant for decades before  manifesting into a chronic and  terminal medical condition.

The industry continues to struggle on how workers' compensation should be employed to insure industries and employers from these condition. Originally the workers' compensation acts did not cover occupational conditions such as silicosis or asbestosis. In the 1950s acts were amended, at industries insistence to bring these occupational conditions under the umbrella of coverage and shield employers from civil lawsuits. With the expansion of products liability claims, based on the intentional concealment of information of the hazards of these conditions, as well as low economic recoveries from struggling workers' compensation systems put the boat back into the bottle, "the longest running tort", asbestos litigation, was born.

Industry continues to try to put the genie back into the bottle, which is reflected in the latest attempt in Missouri to bar liability claims against employers and co-workers. One of the incentives of a workers' compensation program is to prevent industrial accidents, but the system continues to struggle both economically and procedurally in achieving that objective.

The need for AIG to raise additional cash to pay claims raises a concern as to whether premium dollars to pay claims are being adequately protected in the first place, and whether those premiums ared being directed to injured workers and victims of occupational illness. Instead of trying to figure how to further restrict the payment of benefits, perhaps more attention should be paid to making a safer workplace by banning asbestos use, and providing more convenience access through universal medical care.

Related articles

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• AIG to pay $100 million in workers' comp fines (reuters.com)
• The RICO Consequences of Managing Health Care in Workers Compensation (workers-compensation.blogspot.com)
• Proposal to Eliminate Participation of Lawyers (workers-compensation.blogspot.com)
• A.I.G. to Take $4.1 Billion Charge (dealbook.nytimes.com)
• The Health Reform Act Charts a New Course for Occupational Health Care

NJ Rejects Broad Medicare Release Language in Judgments

The NJ Division of Workers Compensation has indicated that broad release "language should not be included as part of a settlement order, attached to a settlement order or placed or part of the settlement record."

Specifically the following sample language was rejected, The claimant, , agrees to indemnify defendant, hold harmless the respondent from any action by Medicare seeking payment of past, current or future medical expenses for the claimant. Claimant shall further hold the respondent harmless from any and all adverse consequences in the event the settlement results in the loss of right to Social Security and/ Medicare benefits to the extent claimant would have been entitled to those benefits in the absence of the settlement agreement."

A memo was issued on October 28, 2010, by the Director and Chief Judge, The Honorable Peter J. Calderone.
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For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

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NJ Denies an Occupational Workers Compensation For Last Exposure Applying Apportionment Rule

A NJ Appellate Court denied an employee workers' compensation benefits by applying an apportionment rule as well as the manifestation of disease doctrine. The employee worked in two states and spend more than 10 times of his working career in Pennsylvania working n a similar job during which time manifestation occurred.


"We do not suggest that there is a mandatory mathematical formula that judges of compensation should apply in calculating the employment exposure of a petitioner as part of Williams's jurisdictional test. Although we might quibble with Judge LaBoy's description of petitioner's exposure as "de minimis," we nevertheless conclude that the sixteen-month exposure was not sufficiently substantial under the totality of the circumstances to constitute injury-conferring jurisdiction in the Division."


McGlinsey v George H. Buchanan Company, Not Reported in A.3d, 2010 WL 3932983 (N.J.Super.A.D.) Decided September 30, 2010

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

Cell Phone Safety and Workers Compensation

Workers' Compensation benefits may soon be denied to employees involved in motor vehicle accidents because of the unauthorized use of cell phones while driving within the course of their employment. As the US Department of Transportation (USDOT) continues to educate Americans with overwhelming statistical evidence that distracted driving is a major cause of accident, the denial of benefits to cell phone users may become a major incentive to create a safer work environment.

Meanwhile, the US Department of Transportation is leaning toward banning all use of cell phones by drivers. At the second national USDOT summit on the increased hazards of the use of cell technology  a major campaign was launched to encourage employers to outright  ban the use of cell phones by employees while working.

Employers have become increasingly concerned over employee "cognitive distraction" caused by the use of cell phones in motor vehicles as more data has become available associating driver cell phone use with accidents. Methods of enforcement will include the use of traffic cameras as the system already hss the capability of detecting drivers who are using telephones while driving. Evidentially, telephone billing records produced post accident can be used to corroborate the fact that an employee was using a telephone while working.

The precedent of using the workers compensation acts to make occupational environments safer is already established. The denial of workers' compensation benefits for unsafe actions by employees has previously been incorporated into law and has been an economic incentively for employers to reduce costs. Employees who are under the influence of drugs or alcohol, and those who fail to use employer provided safety devices, have already been denied benefits in some jurisdictions.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

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RICO Case Dismissed By Trial Court After US Supreme Court Decision

A Federal District Court in Michigan has dismissed a RICO [Racketeer Influenced and Corrupt Organizations Act] claim against Cassens Transportation Company and several other defendants. This is the third time the case was negatively reviewed by the US District Court in Michigan and follows a landmark decision in the US Supreme Court supporting the RICO action that flowed from an underlying  by a workers' compensation action.

"The Court concludes that Plaintiffs' exclusive remedy for their claim that they were fraudulently denied benefits under the WDCA [Workers' Disability Compensation Act] lies within the exclusive administrative scheme set forth in the WDCA which forcloses their RICO claim."

Brown v Cassens Transportation Company, et al. No. 04-cv-72316, 2010 WL 3842373, Decided Sept. 27, 2010.

Click here to read more about RICO claims and workers' compensation.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

Class Action Certification Sought in NCCI et al v AIG Premium Case

Class Action certification is being sought in a claim against AIG brought by NCCI Holdings Inc., Liberty Mutual and Travelers Insurance for underreporting of workers ' compensation premiums. See  AIG tries to block workers comp competitors' class action.

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For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

Medicare Denied Reimbursement From Claim Of Survivor: Held Separate & Distinct

The 11th Circuit Court of Appeals has held that Medicare is not entitled to reimbursement under the Medicare Secondary Payer Act (MSP) when the the surviving children's allocated share of proceed is the result of a wrongful death claim. The Court reasoned that under Florida law, any claim of the estate is separate and distinct from the claim of a survivor. Under Florida law, child's loss of parental companionship claim is a property right belonging to the child.

Medicare through the Secretary of Health and Human Services (HHS) did not participate in the Florida probate action. HHS had refused to recognize the validity of that decision of allocation of the Florida Probate action.

"Counsel for the survivors and the estate acted sensibly, in a cost-effective manner. The nursing home neglect claim was settled for the full value of the available insurance. Clearly, if the language of the field manual applied, in practice, it would lead to an absurd Catch-22 result. Forcing counsel to file a lawsuit would incur additional costs, further diminishing the already paltry sum available for settlement. This flies in the face of judicial and public policy.

"The Secretary's position would have a chilling effect on settlement. The Secretary's position compels plaintiffs to force their tort claims to trial, burdening the court system. It is a financial disincentive to accept otherwise reasonable settlement offers. It would allow tortfeasors to escape responsibility.

"Without citing any statutory authority, regulatory authority, or case law authority, the Secretary and the district court's reliance upon language in a field manual is unpersuasive. The Secretary is not entitled to any share of the Burke surviving children's loss of parental companionship claims.

The decision may have a sweeping national impact on workers' compensation dependency claims, as they are also separate and distinct actions against an employer.

Bradley v, Sebelius, 621 F. 3d 1330, 2010 WL 3769132 (C.A. 11 Fla. 2010)

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

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Atlantic Mutual Insurance Co Placed into Rehabilitation

The NJ Division of Workers' Compensation has responded to an Order of Rehabilitation of Atlantic Mutual Insurance Company and Centennial Insurance Company entered by the New York Supreme Court entered on September 14, 2010. The NJ Division of Workers' Compensation has directed that 120 active cases now pending are stayed until further notice.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

US Workers Compensation Centennial Commission

This  10-minute video was created for the National History Day contest by students at Nimitz High School in Houston, Texas.

The Workers’ Compensation Centennial Commission was formed to celebrate the first constitutional workers’ compensation law in the United States which was signed on May 3, 1911 and took full effect on Sept. 1, 1911.  It was a recognition of society’s responsibility to the workplace, establishing workers compensation as the first form of social insurance in American history.  Today, workers’ compensation stands as a pillar within our economic system that benefits all Americans.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

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Plaintiffs' Law Firm Jon L. Gelman Ranked a Best Law Firm by U.S. News & World Report

Jon Gelman, a plaintiffs' litigation firm for over 3 decades, announces today that U.S. News & World Report has named the firm to its 2010 Best Law Firms list, an annual list showcasing law firms in 81 practice areas throughout the United States. The Best Law Firms rankings (http://tinyurl.com/2foh4u2) are based on both objective data and peer evaluations. Jon Gelman was ranked for its work in Workers’ Compensation.


Jon Gelman represents clients in individual and class action cases in complex litigation across an array of practice areas, regularly litigating challenging cases involving multiple parties in state and federal jurisdictions throughout the United States, either as sole counsel for the plaintiffs or in association with local counsel and other firms. It is a specialty law office concentrating its practice in the litigation of catastrophic and serious injuries resulting from work-related exposures and traumatic events. Jon Gelman is currently active in such cases as the nationally publicized Asbestos Litigation  (http://tinyurl.com/26r4t3r) and Burn Pit Litigation (http://tinyurl.com/279ds2n) and multi-district litigation filed by military personnel against defense contractors KBR and Halliburton.


Attorney Jon Gelman (http://tinyurl.com/ylfucty) received a number of awards and accolades for his willingness to take on diverse litigation in the fight to protect those harmed by traumatic events and occupational exposures. He is a member of The College of Workers Compensation Lawyers (http://tinyurl.com/2crqrn9).


The firm provides legal service with a social conscience. His practice is built on a strong foundation of in-depth knowledge of the subject matter which is reflected in the 3-volume treatise entitled Workers' Compensation Law (http://tinyurl.com/26rfqoq), (Thomson-West), that Jon Gelman authored, and in the 3-volume national treatise, Modern Compensation Law, (Thomson-West), that he also co-authored.


Best Lawyers (http://bestlawfirms.usnews.com/) compiles its list by conducting extensive peer-review surveys in which thousands of lawyers confidentially evaluate their professional peers. The list is published in an annual referral guide, The Best Lawyers in America, with the intention of providing lawyers and clients with a reliable source for finding legal experts in unfamiliar jurisdictions and practice areas. To date, Best Lawyers is the oldest peer-review publication available in the legal profession. The 2010 Best Law Firms list will be featured in the October print issue of U.S. News & World Report and will be available on September 27, 2010. The list and selection methodology are also available at www.usnews.com/bestlawfirms.


Jon L Gelman LLC is located in Wayne, New Jersey. For more information about Jon L. Gelman LLC, contact Jon L. Gelman (NJ) at +1 973.696.7900 or visit http://www.gelmans.com.

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Facebook Makes an Appearance in Workers' Compensation Court

Social networking sites, such as Facebook, have now become informational sources that workers' compensation lawyers are now utilizing for evidentiary purposes. The question that remains unanswered is how information obtained through social networking sites can be admitted and utilized as evidence.

In a recently published article, Law School Professor Gregory M. Duhl and attorney Jaclyn S. Millner, focus on the issues of professional responsibility, discovery, privacy and evidence when social networking factors integrate with a workers's compensation proceeding. Since the compensation system is theoretically no-fault and the evidentiary system is informal, the authors theorize that the workers' compensation arena will act as a fertile ground for experimentation in the legal application of this new technology. 

Social networking site have experienced a surge in use. Web users spend more time on Facebook now than on Google.  Workers' Compensation judges are  also increasing their use of social networking sites.

Text, photos and commentary, shared among the social network, will provide a new avenue of factual discovery that may assist the decision maker in reaching an evaluation of the claim. The authors review the professional responsibilities of attorneys to their clients in advising them of the potential benefits and hazards of social networking, as well as  their  strategy for preparing text and photographic material into evidence. They conclude that lawyers handling workers' compensation matters need to be educated on how to properly utilize facts and opinions gathered from the social networking system.

Duhl, Gregory M. and Millner, Jaclyn S., Social Networking and Workers’ Compensation Law at the Crossroads (September 2010). Pace Law Review, Vol. 31; William Mitchell Legal Studies Research Paper No. 2010-16. Available at SSRN: http://ssrn.com/abstract=1675026

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For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900
 jon@gelmans.com have been representing injured workers and their families who have suffered occupational illnesses. Author NJ Workers Compensation Law (West).

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NJ Workers Compensation Payments to Decrease

For the first time in history, the NJ workers compensation benefit rates are going to decrease. The maximum benefit rate will decrease 0.3% from $794.00 to $792.00 per week.


The 2011 maximum workers' compensation benefit rates for temporary disability, permanent total disability, permanent partial disability and the dependency rate are based upon the States's Average Weekly Wage (SAWW) for the year prior. New Jersey currently provides for a maximum benefit of 75% of the statewide average weekly wage (SAWW). 

The New Jersey maximum rate has been considered significantly low when compared to to other states and perennially a higher adjustment has been recommended.  

The rate applies to those work related injuries and deaths that occur in 2011. NJ ADC 12)2351.6, 42 N.J.R. 1994 (a). In 2007 the rate rose a modest 2.7 %.

Historically, NJ maximum workers' compensation has only risen yearly over the decades. The 2011 announced decrease represents a major slow down in the State's economy. Despite the announced fall in scheduled disability rates, the cost of soaring medical treatment remains uncapped and its economic impact remains uncertain in an era of declining payrolls and lower premium collections for compensation benefits.

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For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jjon@gelmans.com have been representing injured workers and their families who have suffered occupational illnesses. Author NJ Workers Compensation Law (West).

The Fatal Consequences of the GM Bankruptcy

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The General Motors (GM) bankruptcy is going to adversely impact workers' compensation. It has been estimated that GM is facing  $500 Million worth of future mesothelioma claims that its bankruptcy estate is going to avoid paying. The claims will arise because  deadly asbestos fiber that was used in in the manufacture of GM products including brakes.

Last month U.S. Bankruptcy Judge Robert Gerber in New York permitted the unsecured creditors (asbestos claimants) to obtain documentation from GM about the number of estimated / asbestos liability claims it could be facing in the future. As a result of the bankruptcy action, GM transfered its assets only to Motors Liquidation Co., but it plans not to transfer its asbestos liabilities to the new company. Therefore, future asbestos claims against GM will not be paid.

Brakes linings were raw asbestos. GM brakes were sold to and used by auto-mechanics for decades.  Asbestos is a known carcinogen and its deadly effects have been recognized since the early 20th century. One of the latent diseases caused by asbestos exposure is mesothelioma, a rare and fatal illness.

Workers' Compensation systems throughout the United States have been literally swamped with asbestos related claims as the workforce aged and the disease has manifested. The workers' compensation insurance carriers and past employers who used asbestos products have sought to be reimbursed for benefits paid to injured workers by the ultimate wrongdoers, the suppliers, manufacturers and distributors of asbestos products. Those wrongdoers failed to place warning of its products concerning the hazards of asbestos fiber and knew of the hazards.

Taking away the right of ill employees to seek benenfits from GM for its alleged wrongful acts will severely impact the workers' compensation system throughout the US, especially if this process of avoidance becomes of model for future asbestos bankruptcy actions. Difficulties navigating the workers compensation systems at present for occupational illness benefits have become burdensome and extremely difficult for injured workers and their families. GM's attempt to absolve itself from financial responsibility for asbestos related disease should not be permitted as it may create a fatal economic attack on the ailing compensation system.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered asbestos related disease.

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CMS/MSP Statute Tolling Case Set for Hearing by Federal Court

The claim filed by the US government for reimbursement against multiple law firms and insurance companies has been scheduled for a hearing September 13, 2010 on the pending motions. The Federal government, who has claimed that the Statute of Limitation was tolled, is seeking reimbursement involving over 900 specific claims that were paid involving a liability action. The gross settlement was $275 Million for which payment was made in 2003.

The Centers for Medicare and Medicad Services (CMS) under the Medicare Secondary Payer Act has alleged that it was not reimbursed. The Government contends that the Statute of Limitations under 28 U.S.C.2415 is 6 years and not three years. Alternatively the Government has argued that the Statute  f Limitations was tolled under 28 U.S,C, 2416(c), which permits tolling where a claim has accrued, but "facts material to the right of action are not known and reasonably could not be known" by the Government.

The attorneys and insurance companies contend that the Statute of Limitations is a valid defense since the the claim arose when the defendants were originally obligated under the settlement agreement to make payment. Travelers and AIG, as parent companies,  claim that they are not proper parties to the case and should be removed as parties. The insurance companies, in a brief filed in June 2003, also allege that the bar to permitted the statute of limitation tolling should have been dropped under Federal statute. The stated in  "....once the facts making up the 'very essence of the right of action' are reasonably knowable."

United States of America v. James J. Stricker, et al., Case No. 1:09-cv-02423-KOB (USDCT AL).

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Click here to read more about Medicare Secondary Payer Act and workers' compensation.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational exposures.