ALEXANDER COHN
               STATE OF CALIFORNIA                         ) 
                       AND                                 )     VOLUME III 
               IN STATE EMPLOYMENT                         )   
                                   2450 VENTURE OAKS WAY
                                  SACRAMENTO, CALIFORNIA
                                     OCTOBER 12, 2005
                             CERTIFICATE NO. 9561

        1   A P P E A R A N C E S:
        3   FOR THE STATE: 
        4            BARRETT MC INERNEY, Attorney at Law 
        5            1515 S Street, North Building, Suite 400
        6            Sacramento, California  95814
        9            MONICA MINER, Labor Relations Representative 
       10            2495 Natomas Park Drive, Suite 550
       11            Sacramento, California  95833  
       13   ALSO PRESENT:
       14            ROBERT DANERI
       15            JEAN ROWAN
       16            A. RENEE KOREN
       17            KATHERINE ECONOMOU
       19   BEFORE: 
       20            ALEXANDER COHN, Arbitrator 
       21            Post Office Box 4006  
       22            Napa, California 94558

                        R O U G H  D R A F T  O N L Y

        1                          I N D E X
        3   W I T N E S S E S:                               PAGE 
        5   FOR THE UNION
        6   ROBERT DANERI
        7            Direct Examination                         6
        8            Cross Examination                         35 
        9            Redirect Examination                      38 
       11   A. RENEE KOREN
       12            Direct Examination                        44 
       13            Cross Examination                         64  
       14            Redirect Examination                      67
       16   FOR THE STATE
       17   ROBERT DANERI
       18            Direct Examination                        70

                        R O U G H  D R A F T  O N L Y

        1   E X H I B I T S:                           PAGE        
        3                                       MARKED    RECEIVED
        5   UNION EXHIBITS:
        6   Union Exhibit 17
              Copy of California Civil 
        7     Code Sections 1798.80 through 
              1798.84                               32        
        9   STATE EXHIBITS:
       10   State Exhibit 1
              Settlement Agreement Between 
       11     SCIF and CASE with Attached 
              Signature Page                        70       72

                        R O U G H  D R A F T  O N L Y

        2                          9:54 A.M.
        3                            -O0O-
        5                       ROBERT DANERI,
        6             HAVING FIRST BEEN DULY SWORN, WAS 
        9            THE ARBITRATOR:  Let's go back on the record 
       10   and show this is day three of the CASE grievance with 
       11   SCIF, in general, concerning the availability of cell 
       12   phones. 
       13                The next witness for the Union has been 
       14   called and sworn.  And for the record, sir, would you 
       15   please give us your full name, spelling your last 
       16   name.
       17            THE WITNESS:  It's Robert Daneri, 
       18   D-a-n-e-r-i.
       19            THE ARBITRATOR:  And your position, if any, 
       20   with SCIF?
       21            THE WITNESS:  Chief Counsel at State 
       22   Compensation Insurance Fund.
       23            THE ARBITRATOR:  Your witness.
       24            MS. MINER:  Thank you.

                        R O U G H  D R A F T  O N L Y

        1                     DIRECT EXAMINATION
        3   BY MS. MINER: 
        4            Q   Mr. Daneri, could you please tell me who 
        5   you report to.
        6            A   James Neary, the executive 
        7   vice-president.
        8            Q   How do you spell that?
        9            A   N-e-a-r-y.
       10            Q   Executive vice-president, you said?
       11            A   Uh-huh.
       12            Q   Okay.  How long have you been in the 
       13   classification of Chief Counsel?
       14            A   Since May 1, 2004.  It's been a year and 
       15   a half, I would say, now.
       16            Q   How long have you worked for the State?
       17            A   Since May 15th, 1978, 
       18   27-and-almost-a-half years.
       19            Q   And what other positions have you held 
       20   with the State?
       21            A   I was a staff attorney when I started 
       22   with State Compensation Insurance Fund in 1978; then I 
       23   was an attorney-in-charge supervisor in 1986; and in 
       24   August of 1987, I became an assistant chief counsel, 
       25   and I was an assistant chief counsel with State Fund 

                        R O U G H  D R A F T  O N L Y

        1   from August of 1987 through April of 2004.
        2            Q   Have you worked for any other 
        3   departments --
        4            A   No.
        5            Q   -- in the State? 
        6                Who did you work for prior to coming to 
        7   the State?
        8            A   I was in private practice in a law firm 
        9   in Palo Alto, general law.
       10            Q   Do you recall what years you worked for 
       11   that law firm?
       12            A   Yes.  It would have been 1974 until 
       13   coming to work at State Fund in 1978.
       14            Q   So did you ever practice Workers' Comp 
       15   prior to coming to State Fund?
       16            A   No, I did not.
       17            Q   In your capacity as Chief Counsel, could 
       18   you describe who you supervise. 
       19            A   I supervise six assistant chief counsels 
       20   who, in turn, supervise our attorney supervisors.  I 
       21   can't tell you exactly how many we have.  It's 
       22   probably about 30.
       23            Q   I'm going to start asking you questions 
       24   regarding the Fresno cell phone grievance. 
       25                Were you aware that pay phones had been 

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        1   taken out of the Workers' Compensation Appeals Board 
        2   in Fresno about two years ago?
        3            MR. MC INERNEY:  Objection; vague as to time.  
        4   Are we saying --
        5            THE ARBITRATOR:  She said about two years 
        6   ago.
        7            MR. MC INERNEY:  -- about two years ago or 
        8   when he became aware?
        9   BY MS. MINER: 
       10            Q   Are you aware that there is no pay phones 
       11   in the Fresno Workers' --
       12            A   I'm aware of that.
       13            Q   Do you recall when you became aware of 
       14   the situation?
       15            A   Probably late 2003.
       16            Q   Do you recall if SCIF was notified of 
       17   this change, that this -- at the Fresno Workers' 
       18   Compensation Appeals Board?
       19            A   No.
       20            Q   Okay. 
       21            A   I don't recall.
       22            Q   So at the time that the Fresno pay phones 
       23   were taken out, you were an assistant chief counsel; 
       24   correct?
       25            A   That's correct.

                        R O U G H  D R A F T  O N L Y

        1            Q   Okay.  In your capacity as Assistant 
        2   Chief Counsel, were you aware of any situations, at 
        3   the boards that your attorneys supervised, of pay 
        4   phones being taken out?
        5            A   No.
        6            Q   Do you know if the ACCs and yourself have 
        7   discussed the issue of the pay phones at the WCABs at 
        8   the annual conferences in the last few years?
        9            A   It could have been discussed in 2003.  I 
       10   don't have a direct recollection.  It could have been 
       11   discussed in 2004, but again, I don't have a direct 
       12   recollection of that.  It wasn't discussed in 2005, or 
       13   not with me anyhow.
       14            Q   Were you aware of the cell phone pilot 
       15   project out of Fresno?
       16            A   I'm aware of it now.
       17            Q   Okay.  And how did you become aware of 
       18   it?
       19            A   I think in late 2003, there was some word 
       20   that there was some Jerry-Rigging of cell phones in 
       21   Fresno.  I don't think I really had much of the 
       22   specifics though.  Fresno was not my office.
       23            Q   Do you know how the project came to be 
       24   terminated?
       25            A   My recollection, it was terminated in 

                        R O U G H  D R A F T  O N L Y

        1   early 2004.
        2            Q   Could you tell me if there's an agreement 
        3   between the legal office and the executive office at 
        4   SCIF about cell phones for the attorneys?
        5            A   I don't think there's any formal 
        6   agreement.
        7            Q   Is there an informal agreement?
        8            A   I don't think so.
        9            Q   After you became Chief Counsel, had you 
       10   ever spoken with Mr. Jordan at the Fresno office about 
       11   the cell phone pilot project?
       12            A   You know, I just can't recall.  I might 
       13   have.
       14            MS. MINER:  I'd like to show the witness 
       15   Joint Exhibit 2.
       16            THE ARBITRATOR:  Showing it to the witness. 
       17                Any objection to me sharing with the 
       18   witness?
       19            MR. MC INERNEY:  No. 
       20   BY MS. MINER: 
       21            Q   If you'll take a few moments to please 
       22   look at that.
       23            A   (Witness complies.)
       24                This is the August 23rd letter?  Oh, it's 
       25   got attachments to it.

                        R O U G H  D R A F T  O N L Y

        1            THE ARBITRATOR:  Let's go off the record. 
        2                (Pause in proceedings.)
        3   BY MS. MINER: 
        4            Q   Have you seen this grievance before 
        5   today?
        6            A   Yes.
        7            Q   Okay.  And have you reviewed it in 
        8   preparation for your testimony today?
        9            A   I have looked it over.
       10            Q   Okay. 
       11            A   Well, actually, there's several 
       12   grievances.  So ...
       13            Q   We'll get to the second one --
       14            A   Okay.
       15            Q   -- in a few minutes.
       16                Do you know if -- to the best of your 
       17   recollection, if SCIF notified CASE of the decision to 
       18   take away the cell phones out of the Fresno office?
       19            A   I don't know either way.
       20            Q   Okay.  Do you have a cell phone that SCIF 
       21   pays for?
       22            A   Yes, I do.
       23            Q   Do you have any other electronic 
       24   equipment that State Fund provides to you?
       25            A   Yes, I have a Blackberry and a lap-top 

                        R O U G H  D R A F T  O N L Y

        1   computer.
        2            Q   How often do you use those devices?
        3            A   I use the cell phone very seldom, usually 
        4   when I'm traveling down south or something like that.  
        5   I use the Blackberry daily.  And the lap-top computer 
        6   is hooked into my desktop monitor, and I use that 
        7   every day at work.
        8            Q   And SCIF pays for those; correct?
        9            A   Yes.
       10            MS. MINER:  I would like to show the witness 
       11   Union 1, the cell phone reimbursement rates procedure.
       12            THE ARBITRATOR:  Showing it to the witness, 
       13   Union 1. 
       14   BY MS. MINER: 
       15            Q   Why don't you take a few moments to look 
       16   at that.  It's several pages.
       17            A   (Witness complies.)
       18            THE ARBITRATOR:  Let's go off the record. 
       19                (Pause in proceedings.)
       20   BY MS. MINER: 
       21            Q   Could you describe the procedure by which 
       22   attorneys submit reimbursement policy -- or request 
       23   for reimbursement subject to this procedure. 
       24            A   They would send a 594 to their 
       25   attorney-in-charge and request a sign off, and then 

                        R O U G H  D R A F T  O N L Y

        1   that would be sent to the Business Services 
        2   Department.
        3            Q   Have you ever had to use this policy 
        4   before?
        5            A   I've never used it.
        6            Q   Do you understand the formula that SCIF 
        7   uses to reimburse?
        8            A   I've actually never seen this before 
        9   today.
       10            Q   Okay. 
       11            A   And I could not explain the formula to 
       12   you at this point in time.
       13            Q   Do you know if any of the rank-and-file 
       14   attorneys are having any issues with seeking 
       15   reimbursement under this policy?
       16            A   I've never had anyone complain directly 
       17   to me.
       18            Q   To the best of your knowledge, has SCIF 
       19   investigated purchasing cell phones for their 
       20   attorneys to use while they're out of the office?
       21            A   Well, I, myself, did a quick take on 
       22   what -- what it would cost to get cell phones for 
       23   everyone.
       24            Q   And when was that?
       25            A   Recently, within the last month, over the 

                        R O U G H  D R A F T  O N L Y

        1   last few weeks.
        2            Q   And was that with a specific company?
        3            A   Well, that was with our Business Services 
        4   Department.  I don't deal directly with any company.
        5            Q   Okay.  Could you describe that 
        6   circumstance. 
        7            A   I was interested to see what it would 
        8   cost, and I went to Business Services to get an idea 
        9   of what the cost would be, yes.
       10            Q   And what did they say?
       11            A   What we have is, we could get a -- we 
       12   could get a cell phone that would be a base price of 
       13   $60, and that would just be for the monthly cost, 
       14   which would probably have enough minutes or close to 
       15   enough minutes, a considerable amount of minutes; and 
       16   then attached to that would be about $10 in tax, which 
       17   for the -- the 500 -- roughly 540 attorneys we have 
       18   both in the Insured Legal Department and in the State 
       19   Contract Department, would be roughly $38,000 a month, 
       20   which comes out to a little over $450,000 a year; but 
       21   that doesn't include going over minutes, which would 
       22   be .35 a minute, and that doesn't include the unit 
       23   itself, and that doesn't include the staff time to 
       24   monitor the billings and to get the billings paid.
       25            Q   Was that research that you did in 

                        R O U G H  D R A F T  O N L Y

        1   anticipation of today's testimony?
        2            A   Yes.
        3            Q   Okay.  Did Business --
        4            A   Also out of my own curiosity, I wanted to 
        5   see.
        6            Q   Did --
        7            A   I thought it would cost a lot, and it 
        8   does.
        9            Q   Did Business Services give you any 
       10   specifics about the companies that they researched to 
       11   provide an answer to you?
       12            A   No.  But they have a good familiarity 
       13   from providing cell phones to our auditors and our 
       14   field people; so they're well-familiar with cell phone 
       15   companies.
       16            Q   Did you ask them to do an analysis of the 
       17   difference between people seeking reimbursement under 
       18   the SCIF reimbursement procedure versus actually 
       19   purchasing cell phones --
       20            A   No.
       21            Q   -- for the attorneys? 
       22                Was it your determination that that cost 
       23   was too expensive?
       24            A   The cost is prohibitively expensive.
       25            Q   And when was this request made, 

                        R O U G H  D R A F T  O N L Y

        1   approximately, to Business Services?
        2            A   It was sometime in September.  I think it 
        3   might have been initiated at late August, and I think 
        4   I got the information mid-September sometime.
        5            Q   And why would you say it's 
        6   cost-prohibitive?
        7            A   Well, $450,000 a year, at a minimum, is 
        8   an awful -- is a tremendous amount of money in our 
        9   budget at a time when, for 2006, I am desperately 
       10   trying to hold on to all the attorney positions that 
       11   we had for 2005.  And I don't have $450,000 to pay 
       12   for -- for cell phones for attorneys.  It's just -- 
       13   it's a huge budgetary item.
       14            Q   If you had made a determination to ask 
       15   for cell phones, who would that request have been made 
       16   to?
       17            A   The request would have gone to James 
       18   Neary, my executive vice-president.
       19            Q   Okay.  In Joint Exhibit 2, Mr. Landsiedel 
       20   talked about people purchasing cell phones for SCIF 
       21   business. 
       22                To the best of your knowledge, do you 
       23   know if any rank-and-file attorneys have done that?
       24            MR. MC INERNEY:  Could you reference what 
       25   we're talking about in Exhibit 2, since it's 15 pages?

                        R O U G H  D R A F T  O N L Y

        1            MS. MINER:  Sure. 
        2            THE ARBITRATOR:  Joint 2?
        3            MS. MINER:  Yes, Joint 2.  It would have been 
        4   one of the e-mails attached to the original grievance. 
        5            THE WITNESS:  I recall seeing the e-mail.  
        6   Oh, yeah.  Here it is.  Okay. 
        7   BY MS. MINER: 
        8            Q   To the best of your knowledge, do you 
        9   know if any attorneys have purchased a cell phone for 
       10   SCIF business?
       11            A   I don't have any firsthand knowledge, but 
       12   I can make an assumption that that has happened, but 
       13   it's just an assumption.  I could be wrong.
       14            Q   Mr. Daneri, could you please tell me when 
       15   was the last time you made an appearance at a WCAB.
       16            A   Probably 1987.
       17            Q   And when you were practicing before the 
       18   WCAB, what boards did you normally appear at?
       19            A   San Francisco, and I used to handle a 
       20   variety of cases which would take me to other boards, 
       21   Oakland, Sacramento, Santa Rosa, occasionally in 
       22   Southern California, San Jose.
       23            Q   Let me back up for just a moment. 
       24                When you were Assistant Chief Counsel, 
       25   what was the area that you supervised?

                        R O U G H  D R A F T  O N L Y

        1            A   I supervised the San Diego Legal 
        2   Department, the San Francisco Legal Department, the 
        3   Special Litigation Unit and Home Office, Corporate, 
        4   Appellate. 
        5                Actually, those duties had changed over 
        6   the 16 years that I was Assistant Chief Counsel, but 
        7   that's what I had at the end.
        8            Q   Okay.  As of today, could you describe 
        9   what SCIF's practice is for their attorneys to get 
       10   ahold of clients, lien claimants or anyone else, while 
       11   they're making an appearance at the WCAB. 
       12            A   Well, since I haven't been there since 
       13   1987, I'm not exactly sure what steps they're taking 
       14   or what they are doing. 
       15                I mean, some -- some attorneys will go to 
       16   the WCAB with their authority in hand; some will need 
       17   to make a phone call to an adjuster to get authority 
       18   or get increased authority. 
       19                Precisely how that's getting done, I 
       20   can't tell you.  It is getting done though.
       21            Q   Do you know, as of today, how private 
       22   defense attorneys get ahold of their clients --
       23            A   No.
       24            Q   -- when they're at the WCAB? 
       25                When you were making appearances at the 

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        1   WCAB, did you ever have to go to another building to 
        2   make a phone call?
        3            A   Yes.
        4            Q   How often would you say you had to do 
        5   that?
        6            A   Not often.
        7            Q   Okay.  Did most of the buildings have pay 
        8   phones at the time?
        9            A   Yes.
       10            Q   Do you recall how far you had to go to 
       11   get to another building?
       12            A   It might have been across the street at 
       13   some various board I wasn't familiar with; or when the 
       14   phones that they had at the boards were all taken up, 
       15   that's when it would usually happen.  You'd get a 
       16   situation where you'd have four phones, and you'd have 
       17   forty attorneys clamoring for the phones, and so you'd 
       18   have to go across the street or you'd have to go down 
       19   the street; but usually, I could find a phone.
       20                And then often, if an attorney a fully 
       21   prepared on a Workers' Comp case, they often don't 
       22   have to make that phone call.
       23            Q   Do you know how far the attorneys in the 
       24   Fresno office have to go to get to a pay phone?
       25            A   No.

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        1            Q   Are you aware that the pay phones at the 
        2   Grover Beach Workers' Comp Appeals Board have been 
        3   taken out recently?
        4            A   I just found that out.
        5            Q   Do you know how far it is for them to 
        6   find a pay phone?
        7            A   No.
        8            THE ARBITRATOR:  I need to ask for 
        9   clarification.  I'm the only one that doesn't know. 
       10                Grover Beach, is that in Fresno or 
       11   somewhere else? 
       12            MS. MINER:  Grover Beach is somewhere else.
       13            MR. MC INERNEY:  It's near Pismo Beach.
       14            MS. MINER:  It's right next to Pismo Beach.
       15            THE ARBITRATOR:  Please continue. 
       16   BY MS. MINER:
       17            Q   Are you aware of how many pay phones 
       18   there are at the Redding Board?
       19            A   No.
       20            Q   Do most of your rank-and-file attorneys 
       21   have phone cards that they can use?
       22            A   They all do.
       23            Q   They all do. 
       24                Do you know how well those cards work for 
       25   them?

                        R O U G H  D R A F T  O N L Y

        1            A   No.
        2            Q   Okay.
        3            A   I would assume that any card that didn't 
        4   work properly could be exchanged with Business 
        5   Services, and they could receive a card that did work 
        6   properly.
        7            Q   Are you aware or had any complaints of a 
        8   situation where people have tried to use the phone 
        9   cards at the pay phone and they don't work?
       10            A   No.
       11            Q   Okay.  Are you aware if there's any pay 
       12   phones at the Chico Board?
       13            A   No.
       14            Q   At the Oxnard Board?
       15            A   I have no idea.
       16            Q   At the Goleta Board?
       17            A   No.
       18            THE ARBITRATOR:  How do you spell Goleta?
       19            MS. MINER:  Goleta, G-o-l-e-t-a.
       20            THE ARBITRATOR:  Thank you. 
       21   BY MS. MINER: 
       22            Q   At the Santa Monica Board?
       23            A   I don't know.
       24            Q   Okay.  Do you know about the San Jose 
       25   Board?

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        1            A   No.
        2            Q   The Pomona Board?
        3            A   No.
        4            Q   The Bakersfield Board?
        5            A   No.
        6            Q   San Francisco?
        7            A   No.
        8            Q   Anaheim?
        9            A   No.
       10            Q   Sacramento?
       11            A   No.
       12            Q   Stockton?
       13            A   No.
       14            Q   Van Nuys?
       15            A   No.
       16            Q   Riverside?
       17            A   No.
       18            Q   Oakland?
       19            A   No.
       20            Q   San Bernardino?
       21            A   No.
       22                What was the question again?
       23            Q   It was:  Do you know if there's any pay 
       24   phones at these various boards?
       25            A   Okay.

                        R O U G H  D R A F T  O N L Y

        1            Q   And if you're not aware, then I can't ask 
        2   a follow-up question.
        3            A   Don't know.
        4            Q   Are you aware of how many -- how 
        5   available pay phones are at any other boards --
        6            A   No.
        7            Q   -- within the State?
        8                Are the State contracts -- they don't 
        9   have pay phones -- cell phones either; correct?
       10            A   Not to my knowledge.
       11            Q   Are you aware that many of the State 
       12   clients show up to the Board with cell phones?
       13            A   No.
       14            Q   Okay.  Could you tell me if the civil 
       15   section has cell phones?
       16            A   There's one attorney in the civil section 
       17   in Northern California that has a pay phone -- excuse 
       18   me -- that has a cell phone purchased by State Fund.
       19            Q   And what was the purpose of that 
       20   purchase?
       21            A   My understanding, is it's twofold:  One, 
       22   there was a huge civil litigation case in which there 
       23   was 24-hour responsibility; and also as a reasonable 
       24   accommodation for a hearing problem.
       25            Q   Okay.  Any of the subrogation attorneys 

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        1   that have cell phones?
        2            A   Their own or by State Fund?
        3            Q   By State Fund.
        4            A   No.
        5            Q   And your longshoremen, do they have any 
        6   cell phones?
        7            A   From State Fund?
        8            Q   Yes.
        9            A   No.
       10            Q   As of today's date, do you know what the 
       11   average caseload is for a rank-and-file attorney at 
       12   SCIF?
       13            A   The statewide average, 250.
       14            Q   Per person?
       15            A   Perfect comp attorney.
       16            Q   And do you know what the range is, from 
       17   high to low, if you know?
       18            A   We've got -- we've got an office or two 
       19   that may have slipped under 200, and we have some 
       20   offices that are in excess of 250, maybe 270, 
       21   something like that.
       22            Q   Are you aware of how many of the SCIF 
       23   attorneys have to pay for student loans each month?
       24            A   For what?
       25            Q   Their student loans each month. 

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        1            A   No, I have no idea.
        2            Q   Do you know how much private defense 
        3   attorneys make in Workers' Comp right now?
        4            A   I really don't, only anecdotally.
        5            Q   Do you know how much the rank-and-file 
        6   attorneys are making at SCIF?
        7            A   In general, yes.
        8            Q   Would you say that's below or above what 
        9   private defense attorneys make?
       10            A   You're asking for speculation.  I don't 
       11   really know.
       12            Q   Okay.  Could you tell me how often you 
       13   meet with your rank-and-file attorneys?
       14            A   Do you mean on an individual basis or on 
       15   a total basis? 
       16            Q   Either way; individual, group.
       17            A   Once a year for the whole group.
       18            Q   Okay.
       19            A   And then, otherwise, I will occasionally 
       20   get out to the various offices.
       21            Q   Okay. 
       22            A   And it depends on what the office 
       23   proximity is.  If an attorney is in -- is in a 
       24   Glendale or a Santa Ana, I get down there more often 
       25   than I would, say, a Redding.

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        1            Q   Do you try to make it to each office 
        2   throughout the year?
        3            A   I've been trying that over the year and a 
        4   half that I've been Chief Counsel, and I -- I've 
        5   gotten most of them, but there are certain ones, like 
        6   a Bakersfield or a Redding and Riverside, that I 
        7   haven't been to yet.  There are a few.
        8            MS. MINER:  I would like to show the witness 
        9   Union 2.
       10            THE ARBITRATOR:  Showing it to the witness, 
       11   Union 2.
       12            THE WITNESS:  Uh-huh. 
       13   BY MS. MINER: 
       14            Q   Are you familiar with this regulation?
       15            A   Uh-huh.  Yes.
       16            Q   And how are you familiar with it?
       17            A   Well, I remember it from the days that I 
       18   was doing Workers' Comp, and also I've been familiar 
       19   with reform legislation and regulations that have come 
       20   down over the years.
       21            Q   Okay.  Do you know of any situations 
       22   where SCIF attorneys are having problems getting ahold 
       23   of their adjusters when they're at the WCAB?
       24            A   No.
       25            Q   Okay.  Would you say that it would be 

                        R O U G H  D R A F T  O N L Y

        1   appropriate for a SCIF attorney to have to subpoena 
        2   their adjuster to the WCAB?
        3            A   That doesn't sound normal.
        4            Q   Okay. 
        5            A   You did say to subpoena the adjuster -- 
        6   to subpoena the State Fund adjuster to the WCAB?
        7            Q   Let me re-ask the question. 
        8            A   Okay.
        9            Q   When would it be appropriate for a SCIF 
       10   attorney to bring an adjuster down to the WCAB?
       11            A   When the attorney wants testimony from 
       12   the adjuster.
       13            Q   Okay.  Would there be any other time?
       14            A   Maybe the attorney wants the adjuster to 
       15   witness what's going on.  Maybe the attorney wants the 
       16   adjuster there for authority.  There could be a lot, a 
       17   myriad of reasons.
       18            Q   Is it common practice to bring an 
       19   adjuster down to the Board to have authority when they 
       20   come down?
       21            A   It didn't used to be, but there could be 
       22   more happening now because adjusters like to see what 
       23   is going on.  I really can't speak to what's happening 
       24   in each district. 
       25                But that would be -- you know, it's 

                        R O U G H  D R A F T  O N L Y

        1   educational for the adjuster to come down to the WCAB 
        2   with the attorney and see exactly what's going on, and 
        3   they can see the parties, see the injured worker and 
        4   all that type of thing.
        5            Q   Do you know how often adjusters are going 
        6   to the Board right now?
        7            A   I have no idea.
        8            Q   In the last few years, could you estimate 
        9   how often adjusters are going to the WCAB?
       10            A   No.
       11            Q   Okay.  Do you think that it's important 
       12   for SCIF attorneys to provide their own cell phones to 
       13   do SCIF work?
       14            A   I don't really have an opinion on that.  
       15   I think it's important to get the work done, and I 
       16   think it's the attorney's responsibility to get the 
       17   work done.  And I think, in general, our attorneys do 
       18   a fantastic job of getting the work done.  I'm very 
       19   proud of them.
       20            THE ARBITRATOR:  You used the word "provide" 
       21   in your question, "provide their own." 
       22                Do you mean their own personal cell 
       23   phones?
       24            MS. MINER:  Yes.
       25            THE ARBITRATOR:  Okay.  Thank you. 

                        R O U G H  D R A F T  O N L Y

        1                Let's move on. 
        2   BY MS. MINER: 
        3            Q   To the best of your knowledge, are SCIF 
        4   adjusters trained in Union 2?
        5            A   Oh, you're -- I didn't know what you were 
        6   talking about in Union 2. 
        7            Q   I'm sorry.
        8            A   Yeah.  Adjusters know about that, sure.
        9            Q   Okay.  So that's part of their regular 
       10   training?
       11            A   I believe so.
       12            Q   To the best of your knowledge, are they 
       13   informed during their training that they need to be 
       14   available when an attorney is at the Board on one of 
       15   their cases?
       16            A   I cannot tell you that definitively.  I 
       17   would think so.  That is an assumption.
       18            Q   Okay.  Do you know if the SCIF Claims 
       19   Reference Manual requires the claims adjusters to 
       20   attend Mandatory Settlement Conferences?
       21            A   Don't know.
       22            MS. MINER:  I'd like to show the witness 
       23   Joint Exhibit 3, which is the statewide cell phone 
       24   grievance. 
       25            THE ARBITRATOR:  Showing it to the witness, 

                        R O U G H  D R A F T  O N L Y

        1   Joint 3.
        2            THE WITNESS:  Okay. 
        3   BY MS. MINER:
        4            Q   Are you familiar with this document?
        5            A   Yes.  Uh-huh.
        6            Q   And have you seen it before today?
        7            A   Yes, I have.
        8            Q   Okay.  Did you review this document in 
        9   preparation for today?
       10            A   Yes.
       11            Q   Okay. 
       12            A   I looked through it.
       13            Q   All right.  Prior to a few months ago 
       14   when you spoke with Business Services, do you recall 
       15   if SCIF had ever investigated the purchase of cell 
       16   phones?
       17            A   No. 
       18                You mean cell phones for attorneys?
       19            Q   For the attorneys, yes.
       20            A   No.
       21            Q   Were you aware that Mr. Landsiedel, 
       22   approximately eight years ago, had did a study 
       23   regarding cell phones in the L.A. basin?
       24            A   You know, I can recall hearing something 
       25   about that, but I basically know nothing about it.

                        R O U G H  D R A F T  O N L Y

        1            Q   Okay.  Are you familiar with Labor 
        2   Code 56?
        3            A   Oh, yes.
        4            Q   Okay.  Do you believe that discussing 
        5   details of a medical condition of an injured worker is 
        6   okay on a public pay phone?
        7            A   Quite frankly, I've never given it much 
        8   thought.  I would think it's fine.
        9            Q   Okay.  Even when those pay phones are in 
       10   a waiting room?
       11            A   Well, for one thing, I don't think you're 
       12   identifying who the person is.  I mean, you'd have to 
       13   really put together quite a bit to -- to work with 
       14   that. 
       15                I mean, I know I did it in days gone by, 
       16   you know, because it's so specific to that one issue, 
       17   and you could make an argument that these details, if 
       18   they're pertinent to the Workers' Comp case, are part 
       19   of the public record anyhow, if they're at the Board, 
       20   and they're subject to public scrutiny.
       21            Q   What happens if the applicant is in the 
       22   waiting room when the SCIF attorney is trying to make 
       23   the phone call on their case?
       24            A   I don't know.
       25            Q   Okay.  Are you familiar with Civil Code 

                        R O U G H  D R A F T  O N L Y

        1   Section 1798, the Information Practices --
        2            A   The Information Practices Act.  I'm 
        3   vaguely familiar with it.
        4            MS. MINER:  I would like to submit this as 
        5   the next in order.
        6            THE ARBITRATOR:  Do you have a copy for 
        7   Barrett?
        8            MS. MINER:  I do.
        9            THE ARBITRATOR:  For identification only at 
       10   this time, this will be Union 17.  And this is Section 
       11   1798.80 through 84 of the Code.
       12                Showing it to the witness.
       13                (The aforementioned document was 
       14                marked as Union Exhibit 17 by the 
       15                Arbitrator for identification only.) 
       16            MS. MINER:  Why don't we go off the record.
       17            THE ARBITRATOR:  Off the record. 
       18                (Pause in proceedings.)
       19   BY MS. MINER: 
       20            Q   You've had a chance to review Union 17?
       21            A   Yes, which is, it looks to be a part of 
       22   the Information Practices Act, but it is not the core 
       23   act.
       24            Q   Okay. 
       25            A   It looks like an add-on legislation on 

                        R O U G H  D R A F T  O N L Y

        1   business privacy.
        2            Q   And I asked you to focus on 1798.81.5, 
        3   and we had some discussion off the record about what 
        4   does and does not apply to SCIF. 
        5                So for the record, can you tell us what 
        6   applies to SCIF, if at all.
        7            A   I don't believe that 1798.80 does apply 
        8   to SCIF.
        9            Q   Okay.  And what about 1798.81.5 at the 
       10   bottom of the first page?
       11            A   Well, it would be the whole section.  
       12   From 1798.80, et seq., would be the whole thing.  I 
       13   don't think it was intended for a public agency, for 
       14   SCIF.  I think it was intended for businesses.  It 
       15   looks like a piece of new legislation that I'm vaguely 
       16   familiar with, but I would have to dig into it.
       17            Q   If you know, would private defense 
       18   attorneys be subject to this?
       19            A   I don't know.
       20            Q   Do you think that it's important for SCIF 
       21   attorneys to protect information about injured 
       22   workers -- private medical information?
       23            A   Yes, reasonable protection of 
       24   information, certainly.
       25            Q   And could you describe what you feel 

                        R O U G H  D R A F T  O N L Y

        1   would be reasonable protection?
        2            MR. MC INERNEY:  Vague and ambiguous.
        3            THE ARBITRATOR:  Do you understand the 
        4   question, sir?
        5            THE WITNESS:  Oh, I think I can throw an 
        6   answer out there.  Yes, I understand it. 
        7                I think, for example --
        8            THE ARBITRATOR:  Overruled.
        9            THE WITNESS:  -- you know, you're taking over 
       10   a claims file to the WCAB; you don't pass the claims 
       11   file around to everybody to open it up; you don't 
       12   leave it open so that people can come in and peruse 
       13   it, that type of thing.  Yeah, it's reasonable, just 
       14   reasonable. 
       15   BY MS. MINER: 
       16            Q   And what about talking about medical 
       17   information with an adjuster on the phone?
       18            A   Well, I think that's fine because I think 
       19   that's been done for many years, and that is done.  
       20   That was -- that was the -- the practice as I knew it. 
       21                And I'll reiterate, I think it's 
       22   difficult to really hone in on an individual's medical 
       23   condition by the chirping back and forth on a phone.  
       24   I don't think there's anything definitive on that. 
       25            MS. MINER:  I have no further questions at 

                        R O U G H  D R A F T  O N L Y

        1   this time.
        2            THE ARBITRATOR:  Let's go off the record. 
        3                (Recess taken.)
        4            THE ARBITRATOR:  Let's go back on the record. 
        5                And we'll turn to the State, and we'll 
        6   ask if there's any cross?
        7            MR. MC INERNEY:  Yes. 
        9                     CROSS EXAMINATION 
       11   BY MR. MC INERNEY: 
       12            Q   Mr. Daneri, I want to direct your 
       13   attention to Union Exhibit 6. 
       14            A   All right. 
       15            THE ARBITRATOR:  Showing it to the witness, 
       16   Union 6. 
       17                Let's go off the record so he can review 
       18   it.
       19                (Pause in proceedings.)
       20   BY MR. MC INERNEY: 
       21            Q   You are familiar with Union 56 [sic]?
       22            A   Yes.
       23            Q   And can you explain --
       24            THE ARBITRATOR:  Just for the record, he 
       25   means Union 6.

                        R O U G H  D R A F T  O N L Y

        1            MR. MC INERNEY:  Labor Code 56.  Thank you.
        2            Q   Can you explain how this organizational 
        3   format reflected in Labor Code Section 56 operates 
        4   with respect to SCIF.
        5            A   Well, it has to be read in connection and 
        6   context with 57.5.  So what 56 has done is, it's taken 
        7   the division of -- excuse me -- the DIR, the 
        8   Department of Industrial Relations, and then it's got 
        9   six subdivisions that relate to the work of labor, the 
       10   work of -- like Workers' Comp is related to it; Cal 
       11   OSHA is related to it, and it sets that up. 
       12                Then in 57.5, it pulls Stated Fund out by 
       13   saying:  "All duties, powers, and jurisdiction 
       14   relating to the administration of the State 
       15   Compensation Insurance Fund shall be vested in the 
       16   Board of Directors of the State Compensation Insurance 
       17   Fund."
       18                So, actually, DIR has no power over State 
       19   Fund, has no jurisdiction over State Fund.  It is the 
       20   State Fund Board of Directors, who are appointed by 
       21   the governor, that has the power and the jurisdiction 
       22   over State Fund.
       23            Q   Does the director of the Department of 
       24   Industrial Relations have a position on the SCIF 
       25   board?

                        R O U G H  D R A F T  O N L Y

        1            A   Yes.  It's an ex-officio, nonvoting 
        2   position.  So the director does not vote on the board.
        3            Q   And with respect to SCIF's status as a 
        4   hiring authority in State government, is it under the 
        5   jurisdiction of the Department of Industrial 
        6   Relations, or is it independent?
        7            A   Oh, it's totally independent.
        8            Q   Are you aware of any instances, in the 
        9   last three or four years, where there have been any 
       10   sanctions applied to a SCIF attorney by a Workers' 
       11   Compensation judge as a result of the attorney being 
       12   unable to timely connect with the adjuster for 
       13   settlement authority?
       14            A   No, I'm not aware of that.
       15            Q   Are you aware of any Orders to Show 
       16   Cause, or OSCs, that have been issued by any Worker 
       17   Compensation judges directed against SCIF or a SCIF 
       18   attorney with respect to the failure to be able to 
       19   timely communicate with an adjuster for settlement 
       20   authority?
       21            A   Not aware of anything.
       22            Q   When sanctions are issued by a Workers' 
       23   Compensation attorney [sic], because of the failure of 
       24   a SCIF attorney to follow rules or regulations, are 
       25   those instances that are directed to your attention?

                        R O U G H  D R A F T  O N L Y

        1            A   They always have been, and they usually 
        2   will carry with them a money penalty, and we have to 
        3   find a way to pay the money penalty.  And then we also 
        4   have to discuss whether ot not we want to appeal the 
        5   sanction. 
        6                It rarely happens.  It has happened.  I 
        7   can think of one occasion or two when -- when it did, 
        8   and I'm usually -- I'm aware of it. 
        9   BY MR. MC INERNEY: 
       10            Q   And to the best of your knowledge, over 
       11   the last four or five years, you're unaware of any 
       12   such sanctions or threat of sanctions with respect to 
       13   the inability of a SCIF attorney to timely communicate 
       14   with an adjuster for settlement authority?
       15            A   I'm not aware of anything.  That's 
       16   correct.
       17            MR. MC INERNEY:  Nothing further.
       18            THE ARBITRATOR:  Any redirect?
       19            MS. MINER:  Just a couple. 
       21                    REDIRECT EXAMINATION
       23   BY MS. MINER: 
       24            Q   You just testified that in the last four 
       25   or five years, no SCIF attorneys, to your knowledge, 

                        R O U G H  D R A F T  O N L Y

        1   have been sanctioned?
        2            A   Right.
        3            Q   However, we did talk about some incidents 
        4   when that did happen.
        5                Can you describe those situations.
        6            A   There was a State contract attorney, 
        7   about a year ago -- and I have his name, if you want 
        8   it, but I don't know if you want me to reveal his 
        9   name.
       10            Q   No.
       11            A   But he got into some situation where 
       12   there was a disturbance between this gentleman and 
       13   another attorney, and the Workers' Comp judge, I 
       14   think, hit him with a thousand-dollar fine.  And that 
       15   has ramification because I believe that has to be 
       16   reported to the State Bar.  And that's one. 
       17                We had one years ago when the -- Cerritos 
       18   had a district office, and I remember the gentleman's 
       19   name, and I remember it being a sanction, and I can't 
       20   remember exactly what it was for but -- I just can't 
       21   remember exactly what it was for. 
       22                Fortunately, we don't have much of this.  
       23   Our attorneys do an outstanding job getting the job 
       24   done and satisfying the Boards' requirements; and so I 
       25   see very little of this, and we see very little of 

                        R O U G H  D R A F T  O N L Y

        1   this.
        2            Q   For the State contract attorney that you 
        3   said was about a year ago --
        4            A   It was in Commerce.
        5            Q   In Commerce?
        6            A   Uh-huh.
        7            Q   And was that a fine for not having 
        8   settlement authority or for another issue?
        9            A   Well, I think it was a disturbance 
       10   between the two attorneys, the applicant's attorney 
       11   and the State contract attorney.  It had nothing to do 
       12   with settlement authority. 
       13                I think our attorney in State contracts 
       14   was making a very aggressive presentation and maybe 
       15   got overly aggressive or something, and the judge 
       16   reacted or overreacted, what have you, and I cannot 
       17   tell you how the resolution of that came down because 
       18   I don't have any authority over State contracts.
       19            Q   You said that you don't have authority 
       20   over the State contract attorneys?
       21            A   No.
       22            Q   Who does?
       23            A   Frank Floyd, who is the program manager 
       24   for the State contract program.
       25            Q   Do you believe that it's important for 

                        R O U G H  D R A F T  O N L Y

        1   SCIF attorneys to be efficient?
        2            A   I believe SCIF attorneys are efficient.
        3            Q   Do you think that they can be more 
        4   efficient?
        5            A   I think they're doing a fine job.
        6            Q   Now, you just stated that Mr. Floyd 
        7   has -- supervises the attorneys in State contracts.  
        8   So do you not -- do you supervise, then, the attorneys 
        9   in the civil litigation units?
       10            A   Well, I'm the manager, yes, chief 
       11   counsel, and the civil lit attorneys are in the 
       12   Insured Legal Department, yes.
       13            Q   And are the subrogation attorneys in 
       14   there also?
       15            A   Yes.
       16            Q   Are the longshoremen attorneys --
       17            A   Yes.
       18            Q   -- under your supervision also?
       19            A   We only have three.
       20            Q   Do you have any SCIF attorneys that do 
       21   both policy and State contracts?
       22            A   State cases, yes, we do.  Yes.
       23            Q   Okay.  So if a situation arose on a 
       24   policy issue, you would be their chain of command; 
       25   correct?

                        R O U G H  D R A F T  O N L Y

        1            A   Right.
        2            Q   And if it was a State case, the chain of 
        3   command would go up through Mr. Floyd; correct?
        4            A   It depends on what was happening on the 
        5   case.  If it was an issue of an attorney's performance 
        6   and not specifically related to issues on the case, 
        7   they would probably still come under the Insured Legal 
        8   Department via the -- for example, Oxnard is an office 
        9   that has both.  So you have an attorney-in-charge, and 
       10   you have an assistant chief counsel, and you have a 
       11   chief counsel. 
       12                So it would depend on what the issue was.  
       13   If it was an issue of how to deal with a particular 
       14   State agency, that would likely come within 
       15   Mr. Floyd's purview.
       16            Q   Do you and Mr. Floyd ever speak about the 
       17   attorneys and the jobs that they perform at the WCAB, 
       18   just in general?
       19            A   Sure.  In general, yes.
       20            Q   And what do those conversations usually 
       21   entail?
       22            A   Oh, it might be a case that is coming up 
       23   from State contracts to our Appellate Unit in Home 
       24   Office, and Frank will give me some information on, 
       25   you know, whether he thinks we should take that on 

                        R O U G H  D R A F T  O N L Y

        1   appeal or something like that.
        2            Q   Okay.  Have you guys ever discussed cell 
        3   phones for the attorneys?
        4            A   It may have come up over the years.
        5            MS. MINER:  All right.  I have no further 
        6   questions.
        7            THE ARBITRATOR:  Anything further for this 
        8   witness?
        9            MR. MC INERNEY:  Nothing further.
       10            THE ARBITRATOR:  Thank you very much for your 
       11   testimony, sir.
       12            THE WITNESS:  Thank you.
       13            THE ARBITRATOR:  You're excused. 
       14                Let's go off the record. 
       15                (Discussion held off record.)
       17                       A. RENEE KOREN,
       18              HAVING FIRST BEEN DULY SWORN, WAS
       21            THE ARBITRATOR:  Let's go back on the record 
       22   and show the next witness for the Union has been 
       23   called and sworn.
       24                And for the record, would you please give 
       25   us your full name, spelling your last name.

                        R O U G H  D R A F T  O N L Y

        1            THE WITNESS:  A. Renee Koren, K-o-r-e-n.
        2            THE ARBITRATOR:  And your position, if any, 
        3   with SCIF?
        4            THE WITNESS:  Vice-president and member of 
        5   the Executive Committee.
        6            THE ARBITRATOR:  Your witness.
        8                     DIRECT EXAMINATION
       10   BY MS. MINER: 
       11            Q   Ms. Koren, how long have you been in the 
       12   vice-president position?
       13            A   Four years -- a little over four years.
       14            Q   Is that a CEA position or an appointment?
       15            THE ARBITRATOR:  Excuse me.  CEA?
       16            MS. MINER:  Career executive assignment.
       17            THE ARBITRATOR:  Thank you.
       18            THE WITNESS:  It's a CEA position. 
       19   BY MS. MINER: 
       20            Q   Could you describe your duties in that 
       21   position, please. 
       22            A   My areas of responsibility are Human 
       23   Resources, internal and external communications, 
       24   Information Technology, group insurance programs, 
       25   special projects, Project Services Office, the Eureka 

                        R O U G H  D R A F T  O N L Y

        1   district office and the Stockton district office.
        2            Q   And what other classifications have you 
        3   held with State Fund, if any?
        4            A   You know, I've worked for State Fund for 
        5   33 years, and I started as a Clerk I.
        6                Do you want me to go from Clerk I all the 
        7   way through?
        8            THE ARBITRATOR:  How about the last five?
        9   BY MS. MINER: 
       10            Q   The last five, that will work.
       11            THE ARBITRATOR:  Going backwards.
       12            THE WITNESS:  Okay.  Going backwards, I 
       13   was -- I was a CEA V; I was a CEA IV; I was a Program 
       14   Manager -- what? -- I forget -- I think --
       15            MS. ROWAN:  III or IV.
       16            THE WITNESS:  -- Program Manager IV.
       17            THE ARBITRATOR:  Well, she's the witness.  If 
       18   you can recall, you can recall.
       19            THE WITNESS:  We changed our classifications.  
       20   We went from Manager I, II, III, IV to Program Manager 
       21   I-A, I-B, II-A, II-B.  I was the equivalent of a II-B 
       22   and the equivalent of a II-A, and then I was 
       23   Manager I. 
       24   BY MS. MINER: 
       25            Q   Okay.  Have you ever been a claims 

                        R O U G H  D R A F T  O N L Y

        1   adjuster?
        2            A   No.
        3            Q   So prior to becoming a manager, what kind 
        4   of work did you do in SCIF, other than starting off as 
        5   a clerk when you first started?
        6            A   My major experience was -- well, 
        7   actually, I've been in our Fiscal Services Department, 
        8   our Personnel Services, our Management Analyst 
        9   Department, our Human Resources Department, but the 
       10   bulk of my experience has been in Marketing.
       11            Q   And is that for SCIF to get new clients?
       12            A   It's -- our Marketing Department handled 
       13   systems marketing, systems and development, our broker 
       14   program, competitive information, corporate 
       15   advertising which consists of collateral support 
       16   material, website development.
       17            Q   And have you worked for any other 
       18   departments for the State?
       19            A   No.
       20            Q   Are you an attorney?
       21            A   No.
       22            Q   Have you ever had to make an appearance 
       23   at a Workers' Comp Board as a SCIF employee?
       24            A   No.
       25            Q   Do you know if the Legal Division and the 

                        R O U G H  D R A F T  O N L Y

        1   Executive Committee -- if there's any sort of an 
        2   agreement regarding cell phones or a policy about cell 
        3   phones or providing cell phones to the attorneys?
        4            A   Well, the State Fund cell phone policy is 
        5   that we provide cell phones for employees who hotel; 
        6   that means they do not have an office and a desk and a 
        7   chair and a computer in the office.  They -- they are 
        8   field positions completely.  They work and they go 
        9   into hotelling locations where they can plug their 
       10   computer in.
       11            Q   So that would not apply to the attorneys, 
       12   then?
       13            A   Right.
       14            Q   Do you know what classifications those 
       15   employees are?
       16            A   They are generally Workers' Compensation 
       17   insurance representatives or Workers' Compensation 
       18   payroll auditors.  I may be missing a classification 
       19   in there.  I apologize.
       20            Q   In your capacity of vice-president, do 
       21   you receive -- are you one of the response levels for 
       22   various grievances?
       23            A   Yes.
       24            Q   And what level response are you?
       25            A   It depends on the grievance.  I think on 

                        R O U G H  D R A F T  O N L Y

        1   this one, I'm second --
        2            Q   For Unit 2.
        3            A   I think I'm second level.  I think. 
        4            Q   Okay.
        5            A   To the best of my knowledge.
        6            MS. MINER:  I'd like to show the witness 
        7   Joint Exhibit 2.
        8            THE ARBITRATOR:  Showing it to the witness.
        9            THE WITNESS:  I was third-level appeal on 
       10   this one.  Okay. 
       11   BY MS. MINER: 
       12            Q   Are you familiar with this grievance?
       13            A   Yes.
       14            Q   Okay.  And when have you seen this 
       15   grievance before, if at all?
       16            A   I saw it when I signed it.
       17            Q   Have you reviewed this grievance prior to 
       18   today's testimony?
       19            A   Yes.
       20            Q   Okay.  Describe, to the best of your 
       21   recollection, the situation in the Fresno office 
       22   that's the subject of the grievance.
       23            THE ARBITRATOR:  I'm sorry.  "The situation" 
       24   as it pertains to this grievance?
       25            MS. MINER:  Yes.

                        R O U G H  D R A F T  O N L Y

        1            THE ARBITRATOR:  Okay.
        2            THE WITNESS:  I -- I don't know that I can 
        3   testify to that.  I don't know what the situation was 
        4   in the Fresno office.  Someone in Fresno could tell 
        5   you that.  I can tell you what the -- all I know is 
        6   what was provided in the grievance.
        7            THE ARBITRATOR:  Let me do this:  From what I 
        8   understand so far, are you aware that at some point in 
        9   time, the phone company came in and took out the pay 
       10   phones?
       11            THE WITNESS:  I became aware of that this 
       12   past week.
       13            THE ARBITRATOR:  Okay.  Why don't you pick it 
       14   up from there. 
       15   BY MS. MINER: 
       16            Q   Specifically as to the Fresno office?
       17            A   Well, in -- it was in the Fresno 
       18   grievance, and I learned this past week that they've 
       19   been taking pay phones out of the buildings.
       20            Q   Okay.  Do you know, is it just the Fresno 
       21   building or different buildings or what buildings?
       22            A   All I know is, it was additional 
       23   buildings.
       24            Q   Okay. 
       25            A   That's all -- that's all the information 

                        R O U G H  D R A F T  O N L Y

        1   that I had.
        2            Q   Okay.  Do you believe that SCIF should 
        3   reimburse its employees for business expenses?
        4            A   State Fund does reimburse employees for 
        5   business expenses.
        6            Q   Okay.  Do you have a cell phone that SCIF 
        7   pays for?
        8            A   Yes.
        9            MS. MINER:  And I'd like to show the witness 
       10   Union 1.
       11            THE ARBITRATOR:  Showing it to the witness, 
       12   the reimbursement procedure. 
       13            THE WITNESS:  I'm familiar with this. 
       14   BY MS. MINER: 
       15            Q   Okay.  And there's several pages to the 
       16   document. 
       17            A   Yes.  I certainly cannot testify as to 
       18   calculations under this procedure.
       19            Q   Okay.  But you do know that this is the 
       20   SCIF reimbursement policy; correct?
       21            A   Yes.
       22            Q   All right.  Have you ever had to submit 
       23   for reimbursement under this procedure?
       24            A   No.
       25            Q   Are you aware if any attorneys are having 

                        R O U G H  D R A F T  O N L Y

        1   problems submitting -- or receiving reimbursement per 
        2   this procedure?
        3            A   I have no knowledge of that.
        4            Q   Okay.  Do you have any knowledge if SCIF 
        5   has investigated purchasing cell phones, in your 
        6   capacity as the vice-president?
        7            A   Only through conversation with 
        8   Mr. Daneri, that he testified to this morning.
        9            Q   Are you vice-president over Business 
       10   Services?
       11            A   No.
       12            Q   Okay.  Who is?
       13            A   Jim Tudor.
       14            Q   All right.
       15            A   He's actually our acting president.
       16            Q   In your conversations with Mr. Daneri, 
       17   had you spoken about possibly purchasing cell phones, 
       18   to your recollection?
       19            A   Excuse me? 
       20            Q   In your conversations with Mr. Daneri 
       21   about possibly purchasing -- had you guys actually 
       22   discussed possibly purchasing cell phones for --
       23            A   No.
       24            Q   -- the attorneys? 
       25                Okay.  Do you know if any of the SCIF 

                        R O U G H  D R A F T  O N L Y

        1   attorneys have had to purchase a cell phone for SCIF 
        2   business?
        3            A   I have no knowledge of that.
        4            Q   Okay.  Do you have any other electronic 
        5   equipment that State Fund provides?
        6            A   Yes.  I have a lap-top and a computer.
        7            Q   Anything else?
        8            A   And a Blackberry which -- I have a 
        9   Blackberry which I use as a cell phone.  It's one 
       10   device.
       11            Q   Do you know what the practice is for SCIF 
       12   attorneys to get ahold of their clients when they're 
       13   at a Workers' Comp Board?
       14            A   No, I don't.
       15            Q   Okay.  Do you know how private attorneys 
       16   get ahold of their clients --
       17            A   No, I don't.
       18            Q   -- at the Board? 
       19                Are you aware if SCIF attorneys have to 
       20   go to another building to use a pay phone to call a 
       21   client?
       22            A   I have no personal knowledge of what they 
       23   have to do at the Board.
       24            Q   Okay.  And that's all the boards 
       25   throughout the State; correct?

                        R O U G H  D R A F T  O N L Y

        1            A   Yeah, I have no knowledge of how any 
        2   board works.  I've never been at a board, and I've 
        3   never observed any activities at a board.
        4            Q   Do you have any independent knowledge of 
        5   how many cases a SCIF attorney has, on average?
        6            A   None other than the average that 
        7   Mr. Daneri testified to.
        8            Q   Okay.  Do you know what the caseload 
        9   average was for a SCIF attorney when you started as 
       10   vice-president -- what that was?
       11            A   I have no idea.
       12            Q   Okay.  Do you know what SCIF attorneys do 
       13   on a day-to-day basis?
       14            A   I -- I have no personal knowledge of 
       15   their day-to-day job.  I assume they try cases.
       16            Q   Okay. 
       17            A   But I've never had responsibility for 
       18   Legal.  So ...
       19            Q   But you are the third-level response; 
       20   correct?
       21            A   Yes.
       22            Q   For the Unit 2 --
       23            A   Yes.
       24            Q   -- grievance procedure? 
       25                Okay.  Now, you testified that you have 

                        R O U G H  D R A F T  O N L Y

        1   not heard of any attorneys having any problems seeking 
        2   reimbursement under the SCIF procedure. 
        3                So do you know if -- how much money the 
        4   attorneys make at SCIF?
        5            A   I -- I would -- you know, I really don't 
        6   know their salary off the top of my head.  It's 
        7   available publically on the pay scales.
        8            THE ARBITRATOR:  So the answer is no?
        9            THE WITNESS:  No.  And I'd have to refer to 
       10   the pay scales to refresh my memory.  They make a lot 
       11   more than our rank-and-file employees, in general, 
       12   though.
       13   BY MS. MINER: 
       14            Q   Have you ever had an opportunity to meet 
       15   with rank-and-file attorneys at SCIF?
       16            A   I've done presentations to the 
       17   all-attorney conference on occasion concerning 
       18   marketing manager matters when I was in Marketing.  I 
       19   can't remember any other discussions I've had with 
       20   rank-and-file attorneys outside of civil litigation 
       21   cases.
       22            Q   Do you have an opinion as to if a SCIF 
       23   attorney should have a cell phone for use when they're 
       24   away from the office?
       25            A   My opinion really is irrelevant.  The 

                        R O U G H  D R A F T  O N L Y

        1   policy at State Fund, which is put into place for 
        2   economic reasons, is that cell phones are only 
        3   provided for hotelling employees or employees that 
        4   need to be contacted on a 24-hour basis.
        5            THE ARBITRATOR:  Excuse me.  Respectfully, 
        6   I'll decide what's relevant and what's irrelevant. 
        7                The question was:  Do you have an opinion 
        8   on that?  And if your answer is no, that's your 
        9   answer.
       10            THE WITNESS:  My opinion is, no, it's too 
       11   expensive. 
       12   BY MS. MINER: 
       13            Q   Who is responsible for the policy that 
       14   you've described for other SCIF employees who have 
       15   cell phones?  Who oversees that area?
       16            A   The -- the overall policy responsibility 
       17   is vested with the Executive Committee.  The signature 
       18   on the policy or the actual person responsible for 
       19   this policy would be Jim Tudor at this time; but it 
       20   would be an Executive Committee decision.
       21            MS. MINER:  I'd like to show the witness 
       22   Union 2. 
       23            THE ARBITRATOR:  Showing it to the witness, 
       24   the Labor Code.
       25            MR. MC INERNEY:  This is the reg.

                        R O U G H  D R A F T  O N L Y

        1            THE ARBITRATOR:  Excuse me.  The reg.  I'm 
        2   sorry. 
        3   BY MS. MINER: 
        4            Q   Have you had any familiarity with this 
        5   regulation --
        6            A   No.
        7            Q   -- prior to today? 
        8                Okay.  So you don't have any independent 
        9   knowledge that SCIF attorneys have to have settlement 
       10   authority available when they're at the WCAB; correct?
       11            A   Well, I understand that SCIF attorneys 
       12   need settlement authority.  I didn't have personal 
       13   knowledge of this particular provision in the code.
       14            Q   Okay.  Do you know how it is that they 
       15   get ahold of their adjusters?
       16            A   I have no personal knowledge of that.
       17            Q   Okay.  Are you aware of any problems that 
       18   SCIF attorneys might have in getting ahold of their 
       19   adjusters?
       20            A   No.
       21            Q   So you're not aware of any steps that 
       22   SCIF management has undertaken to alleviate a 
       23   situation where attorneys are having problems getting 
       24   ahold of the adjusters?
       25            A   No.

                        R O U G H  D R A F T  O N L Y

        1            Q   Okay.  Do you have any opinion about SCIF 
        2   attorneys requiring their adjusters to come down to 
        3   the WCAB?
        4            A   I don't know that SCIF attorneys require 
        5   adjusters to go to the WCAB.
        6            Q   Or requesting adjusters to come down to 
        7   the WCAB on a case?
        8            A   What are you asking me?  Do I have an 
        9   opinion about that? 
       10            Q   Yes. 
       11            A   My personal opinion would be that that 
       12   would be all to the good.  It would give additional 
       13   training to the adjuster to be there and see an actual 
       14   hearing in progress.
       15            Q   Do you have any familiarity with the jobs 
       16   of claims adjusters?
       17            A   Personally -- other than the fact they 
       18   adjust the claims, they provide the benefits, you 
       19   know, they make liability determinations.  Other than 
       20   that, I don't have no personal -- I've never adjusted 
       21   a claim.  I have no personal knowledge of their actual 
       22   job.
       23            Q   As vice-president of Human Resources, are 
       24   you involved in any sort of training program for the 
       25   adjusters?

                        R O U G H  D R A F T  O N L Y

        1            A   No.
        2            Q   Do you know who is?
        3            A   That would be our Claims Rehabilitation 
        4   Department, and that's their responsibility.
        5            Q   Okay.  Do you have any knowledge of any 
        6   SCIF attorneys being threatened with sanctions for not 
        7   being able to get ahold of their adjusters?
        8            A   No.
        9            Q   Do you believe that it's important for 
       10   SCIF attorneys to be efficient in their job?
       11            A   I believe our attorneys are very 
       12   efficient in their jobs.
       13            Q   Okay.  Do you think that there's anything 
       14   that SCIF could do to make them more efficient?
       15            A   No, I don't.
       16            Q   Does SCIF have a policy about protecting 
       17   the privacy of the injured workers who have a claim 
       18   that's filed?
       19            A   I'm not familiar -- personally familiar 
       20   with the privacy provisions related to adjusting the 
       21   claims and the information in a claims file.
       22            MS. MINER:  I'd like to show the witness 
       23   Joint Exhibit 3. 
       24            THE ARBITRATOR:  Showing it to the witness, 
       25   Joint 3.

                        R O U G H  D R A F T  O N L Y

        1            THE WITNESS:  Okay. 
        2   BY MS. MINER:
        3            Q   Are you familiar with Joint Exhibit 3?
        4            A   Yes.
        5            Q   Okay.  And how did you become aware of 
        6   it?
        7            A   When I signed the review.
        8            Q   Okay. 
        9            THE ARBITRATOR:  Just so I know, this is the 
       10   third level?
       11            THE WITNESS:  Yes.
       12            THE ARBITRATOR:  Please continue. 
       13   BY MS. MINER: 
       14            Q   All right.  And I'd like to look at your 
       15   response of March 15th, 2005.  And I'm looking at the 
       16   third paragraph. 
       17            THE ARBITRATOR:  I'm sorry.  Can we share it?
       18            THE WITNESS:  I have two different eye 
       19   contacts; so I need to move a little closer to you.  
       20   So ...
       21            THE ARBITRATOR:  That's okay. 
       22   BY MS. MINER: 
       23            Q   Did you have any familiarity with Labor 
       24   Code Section 56 prior to receiving this grievance?
       25            A   Yes.

                        R O U G H  D R A F T  O N L Y

        1            Q   And what was your recollection of what 
        2   you knew about Labor Code 56?
        3            A   In terms of civil litigation, this -- the 
        4   type of entity that State Fund is comes up very often.
        5            Q   Okay.  And can you describe that. 
        6            A   Can I describe what?
        7            Q   What you meant by how it comes up in 
        8   civil litigation.
        9            A   What type of entity that we are.
       10            Q   Okay. 
       11            A   Because we are a public enterprise fund, 
       12   which is unique in State government.  It -- when we're 
       13   under civil litigation, it's to separate how we are 
       14   different from the business; and in other dealings 
       15   with other State agencies, it's to separate how we are 
       16   different from other State agencies.
       17            Q   But according to Labor Code Section 56, 
       18   you're part of the Department of Industrial Relations; 
       19   correct?
       20            A   Well, we're -- that's where we are on the 
       21   organizational chart at the State of California.  We 
       22   have no reporting relationship to the Department of 
       23   Industrial Relations.  We report directly to our Board 
       24   of Directors through our president.
       25            Q   Could you tell me what the current SCIF 

                        R O U G H  D R A F T  O N L Y

        1   operating budget is for this fiscal year. 
        2            A   I don't have that number off the top of 
        3   my head.  I'm sorry.
        4            Q   Okay.  Do you have a good faith estimate 
        5   of how much that is?
        6            A   I really -- I'm sorry.  I really do not 
        7   know.
        8            Q   Okay.  Are you one of the vice-presidents 
        9   that is responsible for the fiscal budget?
       10            A   Yes.
       11            Q   Okay.  Do you have a good faith estimate 
       12   of how much SCIF spends on the Legal Division --
       13            A   No, I don't.
       14            Q   -- in a particular year? 
       15                If you know, in the last four to five 
       16   years, has the Legal Division's budget increased?
       17            A   Yes, it has.
       18            Q   Okay.  Do you know by how much?
       19            A   I don't know by how much.
       20            Q   Okay.  And what has that increase gone to 
       21   specifically in Legal, if you know?
       22            A   I don't know all specific areas.  I do 
       23   know it's gone to salaries because we have increased 
       24   staffing in the Legal Division.
       25            Q   Do you know how much has gone for 

                        R O U G H  D R A F T  O N L Y

        1   lap-tops?
        2            A   No, I don't.
        3            Q   Does SCIF purchase Blackberrys at all for 
        4   any of its attorneys?
        5            A   Excuse me? 
        6            Q   Does SCIF purchase Blackberrys for any of 
        7   its attorneys?
        8            A   Our chief counsel.
        9            Q   But no one else?
       10            A   Not to my knowledge.
       11            THE ARBITRATOR:  Just so I know -- and it may 
       12   be irrelevant, but is there a line of demarcation at 
       13   SCIF over which you get a lap-top, Blackberry, cell 
       14   phone and under which you do not, or it's just job by 
       15   job?
       16            THE WITNESS:  Well, in general -- in general, 
       17   if it's a field job, you get a lap-top.  If it's a 
       18   field job that does not have a desk, then you get a 
       19   cell phone. 
       20                Managers -- program managers and the 
       21   Executive Committee members get Blackberrys because we 
       22   need 24-hour notice. 
       23                Then there are other employees, say, in 
       24   our Home Office, IT Department, our Disaster Recovery 
       25   Team where we need 24-hour contact, where they do get 

                        R O U G H  D R A F T  O N L Y

        1   cell phones.
        2            THE ARBITRATOR:  Thank you. 
        3                Please pick it up. 
        4   BY MS. MINER:
        5            Q   Okay.  To the best of your knowledge, do 
        6   you know if SCIF's fiscal budget has increased over 
        7   the last four years since you've become 
        8   vice-president, in general?
        9            A   In general, yes, it has.
       10            Q   And could you explain the reason for 
       11   that.
       12            A   Increased staffing.
       13            Q   Has there been an increase in 
       14   policyholders with SCIF?
       15            A   There -- there was up until probably the 
       16   last 24 months.
       17            Q   Do you know if SCIF contracts with any 
       18   outside law firms?
       19            A   Yes, we do.
       20            Q   Do you know if those law firms provide 
       21   cell phones to their attorneys?
       22            A   I have no idea.
       23            Q   Are you familiar with a study that was 
       24   done approximately eight years ago in the L.A. area 
       25   about purchasing cell phone for attorneys?

                        R O U G H  D R A F T  O N L Y

        1            A   No.
        2            MS. MINER:  I have no further questions at 
        3   this time.
        4            THE ARBITRATOR:  Thank you. 
        5                Let's go off the record.
        6                (Discussion held off record.)
        7            THE ARBITRATOR:  We'll have cross. 
        9                      CROSS EXAMINATION
       11   BY MR. MC INERNEY: 
       12            Q   Ms. Koren, you had mentioned that there 
       13   is no reporting relationship between SCIF and the 
       14   Department of Industrial Relations.
       15                What do you mean by a "reporting 
       16   relationship"?
       17            A   There's no one at the Department of 
       18   Industrial Relations that authorizes anything for 
       19   State Fund.  We do have the director of the Department 
       20   of Industrial Relations, John Ray, on our Board of 
       21   Directors, but he is a nonvoting member.
       22            MR. MC INERNEY:  Can I take a peek at Joint 
       23   Exhibit 1, which I think is the contract?
       24            THE ARBITRATOR:  Sure. 
       25   BY MR. MC INERNEY:

                        R O U G H  D R A F T  O N L Y

        1            Q   I want to direct your attention to 
        2   page 118 of Joint Exhibit 1. 
        3                And I believe on 118, there are separate 
        4   signature lines on the Unit 2 contract for the 
        5   Department of Industrial Relations and for SCIF?
        6            A   Yes, there are.
        7            Q   With respect to the signature line for 
        8   SCIF, do you recognize that signature?
        9            A   Yes.  It's George Cronin.
       10            Q   And do you recognize the signature on the 
       11   line for the Department of Industrial Relations?
       12            A   I don't know who that person is.
       13            Q   Who selects Mr. Cronin to work at the 
       14   master table for Unit 2 -- or who did select him? 
       15            A   From State Fund? 
       16            Q   Is State Fund the group that selects him?
       17            A   Yes.
       18            Q   And as far as you know, is the selection 
       19   of who is going to sit at the Unit 2 table on behalf 
       20   of SCIF something which has to be reviewed or 
       21   authorized by the Department of Industrial Relations?
       22            A   No.
       23            Q   During the time Mr. Cronin sat at the 
       24   Unit 2 table, was there any interaction with you 
       25   concerning proposals that were being passed at the 

                        R O U G H  D R A F T  O N L Y

        1   table?
        2            A   No.  I -- at this time -- what was the 
        3   date on there?
        4            Q   I believe that contract is 2001. 
        5            MS. MINER:  For the record, I'd like to 
        6   object to this line of questioning because Barrett 
        7   hasn't established if this witness has knowledge of 
        8   the bargaining process.
        9            THE ARBITRATOR:  Excuse me.  Are you saying 
       10   there's no foundation?
       11            MS. MINER:  No foundation.
       12            THE ARBITRATOR:  While I'm in general 
       13   agreement, for these questions, overruled.  He's just 
       14   asking her what would be, I believe, common knowledge.  
       15   In fact, the document speaks for itself. 
       16                So please continue. 
       17            MR. MC INERNEY:  Okay.  With respect to that 
       18   period of time, what is it?  We were trying to 
       19   establish the year of the contract. 
       20                Is it 2001?
       21            THE ARBITRATOR:  July '01 to July '03. 
       22   BY MR. MC INERNEY: 
       23            Q   On that particular contract, do you 
       24   recall having any interaction with Mr. Cronin 
       25   concerning issues that were coming up at the 

                        R O U G H  D R A F T  O N L Y

        1   bargaining table?
        2            A   No.
        3            Q   Are you aware of who Mr. Cronin reported 
        4   to during his tenure at the master table on behalf of 
        5   SCIF?
        6            A   He would have reported to the Labor 
        7   Relations Officer at the time.  I'm not sure who that 
        8   was.  I do know the Personnel Services Manager at the 
        9   time was Patricia Smith.  I would guess that the Labor 
       10   Relations Officer was Irene Sada-Casap, but I'm not 
       11   absolutely certain.
       12            MR. MC INERNEY:  I don't have anything 
       13   further.
       14            THE ARBITRATOR:  Any redirect? 
       16                    REDIRECT EXAMINATION
       18   BY MS. MINER:
       19            Q   Are you familiar at all with the 
       20   negotiating process that DPA utilizes?
       21            A   At the bargaining table?
       22            Q   Yes.
       23            A   Yes.
       24            Q   And how do you have knowledge of that?
       25            A   From discussions with my HR personnel who 

                        R O U G H  D R A F T  O N L Y

        1   are involved in the negotiations.
        2            MS. MINER:  I have no further questions.
        3            THE ARBITRATOR:  Anything further?
        4            MR. MC INERNEY:  Nothing further.
        5            THE ARBITRATOR:  Thank you for your 
        6   testimony.  You're excused.
        7                Rest, subject to possible rebuttal?
        8            MS. MINER:  Can we go off the record for a 
        9   minute?
       10            THE ARBITRATOR:  Off the record.
       11                (Discussion held off record.)
       12            THE ARBITRATOR:  Within the next few days or 
       13   so, I will write the parties, and I will do my best to 
       14   do the following:  I will give you a date pretty far 
       15   out in the future with the understanding that this 
       16   case is on what I call my short-call list, and I 
       17   believe you're both familiar with this.  As soon as I 
       18   get cancellations, I'll pick up the phone and call the 
       19   parties and say, "Are you available two weeks from 
       20   Monday?" or --
       21                Let's go off the record one second. 
       22                (Discussion held off record.)
       23            THE ARBITRATOR:  I'm sorry to keep repeating 
       24   this, but we will find a date that's further out than 
       25   everybody likes, and then I will do my best to move it 

                        R O U G H  D R A F T  O N L Y

        1   up to an earlier date. 
        2                I would also note for the record that I 
        3   have and I will maintain until the next hearing date 
        4   the packet of new exhibits that Barrett has 
        5   transmitted to Monica and myself.  I won't mark them 
        6   yet unless this is the same --
        7            MR. MC INERNEY:  They're the same as Union 
        8   16, only on Union 16, we had scratched off all of the 
        9   handwriting, and the handwriting will be coming in 
       10   through Mr. Cronin.
       11            THE ARBITRATOR:  Off the record.
       12                (Discussion held off record.)
       14                       ROBERT DANERI,
       18            THE ARBITRATOR:  Now, we'll turn to the 
       19   State's case, and the first witness has been recalled. 
       20                And I would remind you, sir, you're still 
       21   under oath.
       22            THE WITNESS:  Yes.
       23            MR. MC INERNEY:  Will this be State A?
       24            THE ARBITRATOR:  No, 1.  State Exhibit 1.
       25            MR. MC INERNEY:  Okay.

                        R O U G H  D R A F T  O N L Y

        2                     DIRECT EXAMINATION
        4   BY MR. MC INERNEY:
        5            Q   Mr. Daneri, I'm showing you a copy, or 
        6   you're being shown a copy of State Exhibit 1, and I 
        7   want to direct your attention to page 4.
        8            THE ARBITRATOR:  Let's go off the record one 
        9   second. 
       10                (Discussion held off record.)
       11            THE ARBITRATOR:  For identification only at 
       12   this time, State Exhibit 1 is a settlement agreement 
       13   dated November 8, 2001 -- or let's just say 
       14   October-November 2001.  It's a three-page -- four-page 
       15   document.
       16                (The aforementioned document was 
       17                marked as State Exhibit 1 by the 
       18                Arbitrator for identification only.)  
       19            THE ARBITRATOR:  Please continue. 
       20   BY MR. MC INERNEY: 
       21            Q   Directing your attention to page 4, is 
       22   that your signature on the line above the typed 
       23   Robert W. Daneri?
       24            A   Yes, it is.
       25            Q   And are you familiar with this particular 

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        1   settlement agreement?
        2            A   Yes, I am.
        3            Q   And what was the issue that was being 
        4   resolved, if you recall?
        5            A   The issue was SCIF's use of outside 
        6   counsel -- contracting out for outside counsel on 
        7   certain cases.
        8            Q   And this was an agreement between SCIF 
        9   and the CASE union?
       10            A   Yes.
       11            Q   I notice on page 4, there's a signature 
       12   line for George Cronin.
       13                Is he someone with SCIF?
       14            A   Yes.
       15            Q   And yourself and Mr. Savage. 
       16                He was also employed by SCIF?
       17            A   Yes, indeed.
       18            Q   To the best of your knowledge, was there 
       19   ever any signature or approval from the Department of 
       20   Industrial Relations with respect to SCIF entering 
       21   into this settlement agreement with CASE?
       22            A   No.  The Department of Industrial 
       23   Relations had nothing to do with this.
       24            Q   And that is because of the explanation 
       25   that you had previously given with respect to Labor 

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        1   Code Section 56 and 57.5?
        2            A   That is correct.
        3            MR. MC INERNEY:  I don't have anything 
        4   further.
        5                And I'd move to admit State Exhibit 1.
        6            THE ARBITRATOR:  I'll reserve until the end 
        7   of what I believe is a short cross.
        8                We'll have cross, if any.
        9            MS. MINER:  I don't have any questions.
       10            THE ARBITRATOR:  Any objection to State 1?
       11            MS. MINER:  No.
       12            THE ARBITRATOR:  It's received. 
       13                (The aforementioned document which was 
       14                previously marked State Exhibit 1 
       15                was received into evidence by the 
       16                Arbitrator.) 
       17            THE ARBITRATOR:  Thank you for your 
       18   testimony, sir. 
       19                We're going to -- pursuant to our prior 
       20   understandings, we're going to break the hearing at 
       21   this time.
       22            MS. MINER:  Mr. Floyd is not available today; 
       23   correct?
       24            THE ARBITRATOR:  Let's go off the record.
       25                (Discussion held off record.)

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        1            THE ARBITRATOR:  So as I just said, we're 
        2   going to break the hearing at this time, and we will 
        3   be back under the procedure that I advised you a 
        4   little earlier where we'll set a date that's, frankly, 
        5   going to be out a little bit into '06, and then I'll 
        6   absolutely do my best to finish up this case at an 
        7   earlier date when I get a cancellation.  Okay?
        8            MS. MINER:  Okay.
        9            THE ARBITRATOR:  Okay?
       10            MR. MC INERNEY:  Okay.
       11            THE ARBITRATOR:  Thank you all very much.  
       12   Nice to meet you.  Good luck to you in your career. 
       13            MS. ECONOMOU:  Thank you.
       14            THE ARBITRATOR:  And thank you, Angela. 
       15                And we are off the record.  
       16                (At the hour of 11:53 a.m., the 
       17                proceedings were adjourned.) 
       18                            -O0O-

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