Colorado Law Blog

Two companies and two executives accused in the deaths of five workers in a 2007 fire inside a tunnel at a Colorado hydroelectric plant have been indicted on federal charges. Xcel Energy, RPI Coating Inc. and two RPI executives face criminal charges in the deaths in a federal indictment that alleges they knew about the danger and did nothing about it. The 17-page indictment, made public Friday, accuses RPI of trying to cover up shortfalls by altering, destroying, or concealing the cameras, journals and cell phones of two of the dead workers.

Four people survived the fire at the Xcel Cabin Creek hydroelectric plant in Georgetown, Colo., about 35 miles west of Denver. All five of the workers killed were from California and worked for Santa Fe Springs, Calif.-based RPI.

On Oct. 2, workers bringing a solvent into the tunnel to clean a sprayer noticed the solvent had vaporized into the air, "causing employees to suffer irritation and complain to their managers."

Later, vapor from the solvent ignited. Workers deep inside the tunnel survived the initial fire and were in radio contact with rescuers as crews tried lowering air tanks to them. The workers were overcome by smoke and fumes and died from asphyxiation.

Earlier problems, including multiple evacuations due to high levels of carbon monoxide and damage to electrical equipment, made the companies and RPI executives aware that employees faced serious health and safety hazards working in the tunnel, the indictment said.

In March 2008, OSHA proposed $845,100 in penalties against RPI and $189,900 against Xcel, saying the "catastrophe could have been avoided."

Five of the charges involve the violation of Occupational Safety and Health Administration regulations by Xcel, RPI and RPI executives Philippe Goutagny and James Thompson.

RPI faces one count of obstruction for allegedly altering, destroying and concealing records, documents and others items belonging to a surviving worker and two deceased workers, the indictment said.

The companies failed to get a permit for the work or assess the tunnel for danger, according to the indictment. Local fire authorities had asked permission to conduct training in the tunnel before the work began, but the companies never followed up.

Xcel and its subsidiary, Public Service Co. of Colorado, and RPI, each face fines of up to $2.5 million and restitution if convicted of the OSHA violations, while Goutagny and Thompson individually face 2 1/2 years in prison and a fine of up to $1.25 million. RPI faces a $500,000 fine for the obstruction charge.

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As football season begins in high school leagues across the nation, coaches are issuing protective equipment to players. The mother of an injured East St. Louis High School football player Demond Hunt Jr. is seeking damages of more than $200,000 in a lawsuit filed on his behalf against the local school district and head football coach. She alleges that her son suffered permanent brain injuries as a result of negligence on the part of the coach and the district.

Hunt, then 16, suffered a series of seizures and small strokes while on the sidelines at a high school game. Doctors discovered a blood vessel had burst in Hunt's brain. He was hospitalized for at least five weeks.

The mother believes that the district and coach were negligent by providing Hunt with a defective football helmet. The suit says an air bellows designed to provide a protective cushion was not properly inflated. Additionally, after Hunt complained of a headache and exhibited signs of concussion his coach ordered him to continue to play.

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Addicted to a powerful painkiller, Kristen Diane Parker admittedly stole fentanyl from empty operating rooms while on the job at Rose Hospital. So, far 3,978 Rose patients and about 1,200 from Audubon Surgery Center in Colorado Springs, where Parker worked after Rose, have been tested.

Parker, who has hepatitis C, allegedly may have infected at least 23 hospital patients in Denver with the incurable liver disease, which is transmitted through contact with blood, by reusing needles in the saline-filled syringes she substituted for the ones containing fentanyl. The number of confirmed hepatitis C cases associated with jailed suspect Kristen Diane Parker continues to rise, with the state health department now reporting 21 preliminary matches. Some 6,000 patients are being tested in Colorado, plus several thousand more from a suburban New York City medical facility where Parker formerly worked. A Texas medical facility is waiting to determine when Parker contracted hepatitis C before pursing potential testing there.

The situation is prompting consideration of a Colorado law to require medical assistants to be licensed, as well as the need for cross-referencing computerized hospital reports of missing drugs and unexpected patient infections. Several former patients have retained counsel, and there also has been a call for medical facilities to switch to a different type of syringe with a needle that cannot be reused.

Parker, who has said she didn't know she was infected with hepatitis C when she substituted the syringes, is facing federal charges of tampering with a consumer product and obtaining a controlled substance by deceit. She could face a maximum sentence of life in prison if she is convicted of all 42 counts against her.

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The parents of a young boy struck in the head when a batter hit a ball into a picnic area before an Albuquerque Isotopes game can sue the minor league team and the city, an appellate court has ruled.

The court said there is ''no public policy reason to justify bestowing immunity on the business of baseball.'' The decision clears the way for a lawsuit by the parents of Emilio Crespin to proceed in state district court in Albuquerque.

Four-year-old Emilio Crespin was with his family at a picnic table in the left field stands on July 21, 2003, when Dave Matranga of the New Orleans Zephyrs hit a batting practice home run that fractured the boy's skull. According to the family's lawyer, Crespin suffered permanent brain damage.

The stadium is owned by the city and operated by the Isotopes, the Triple-A affiliate of the Los Angeles Dodgers. The New Mexico Court of Appeals declined to adopt the so-called ''baseball rule,'' which immunizes stadium owners from liability as long as they have screens protecting the stands behind home plate.

The Crespins say the ballclub was negligent in having people sit in an unprotected area where the placement of tables turns picnickers' attention away from the field and where there are no warning signs or announcements when batting practice begins.

In Colorado, statutory language establishes the assumption of risk as law in the oddly called Colorado baseball spectator safety act, C.R.S. 13-21-120. Under the statute, suit cannot be brought against owners who need only post warning notices.

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Workers compensation is insurance that provides compensation for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain." While plans differ between states, provision can be made for weekly payments in place of wages (a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (a form of health insurance), and benefits payable to the dependents of workers killed during employment (a form of life insurance). General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in worker compensation plans.

In Colorado, about 100 large employers, including the state, are self-insured and don't buy workers' compensation coverage. Among those that do, Pinnacol Assurance is the dominant carrier, accounting for 57 percent of policies sold in the state. Pinnacol estimates it covers an estimated 1 million of Colorado's 2.5 million workers. The Pinnacol Assurance has retained a $684 million surplus . State insurance division records show Pinnacol's surplus -- after accounting for actual and possible claims -- has grown by about $100 million a year over the last five years. Pinnacol also has increased policyholder dividends during that time, paying $79 million last year.

Now state lawmakers are taking a closer look at why the state-created workers' compensation insurer has so much extra money on hand. A legislative committee charged with studying Pinnacol's operations met for the first time Tuesday. The group's leaders said they want to find out whether injured workers are wrongfully being denied benefits and whether the businesses that Pinnacol covers are being overcharged.
Proof of its reach can be seen on the committee itself. Seven of the nine lawmakers present for Tuesday's meeting said they either currently had Pinnacol coverage for their own businesses or had been covered by Pinnacol as an employee in the past.

Pinnacol has said it needs a larger surplus -- about six times larger than the minimum required by state regulators -- because it can't rely on the state or a parent company to back it up. Private insurers typically hold a surplus of up to three times the minimum amount and return the rest to the parent company, which can use the money to subsidize other branches of its business.

The committee's vice chairman questioned why the benefits required by Colorado's workers' compensation law are in the middle of the pack nationally, yet the average benefit paid to workers was near the bottom among the states. The director of the state's Division of Workers' Compensation, said the average was spread across all workers, both injured and healthy, and said it could be low because Colorado companies could be safer than companies in other states.

Several non-lawmakers who have experience working with Pinnacol are serving on the committee, including Pinnacol CEO Ken Ross. Ross is scheduled to switch to the other side of the hearing table later to offer testimony, which leads some to ponder how unbiased can be the review process.

The committee will hold five other meetings, including one with injured workers, before voting on whether to make any changes to Pinnacol. One of the options includes selling it.

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The political battle over health-care reform has many experts citing research by the Lewin Group, a consulting firm whose research is cited by opponents of a public insurance option.

To Rep. Eric Cantor (Va.), the House Republican whip, it is "the nonpartisan Lewin Group." To Republicans on the House Ways and Means Committee, it is an "independent research firm." To Sen. Orrin G. Hatch (Utah), the second-ranking Republican on the pivotal Finance Committee, it is "well known as one of the most nonpartisan groups in the country."

Generally left unacknowledged, or perhaps unknown, is that the Lewin Group is wholly owned by UnitedHealth Group, one of the nation's largest insurers. More specifically, the Lewin Group is part of Ingenix, a UnitedHealth subsidiary that was accused by the New York attorney general and the American Medical Association of helping insurers shift medical expenses to consumers by distributing skewed data. Ingenix supplied UnitedHealth and other insurers with data that allegedly understated the "reasonable and customary" doctor fees that insurers use to determine how much they will reimburse consumers for out-of-network care.

In January, UnitedHealth agreed to a $50 million settlement with the New York attorney general and a $350 million settlement with the AMA, covering conduct going back as far as 1994. Lewin Group Vice President John Sheils said his firm had nothing to do with the Ingenix reimbursement data. Lewin has gone through "a terribly difficult adjustment" since it was bought by UnitedHealth in 2007, he said, because the corporate ownership "does create the appearance of a conflict of interest."

Lewin's clients include the government and groups with a variety of perspectives, including the Commonwealth Fund and the Heritage Foundation. A February report by the firm contained information that could be used to argue for a national system known as single-payer, the approach most threatening to insurers, Sheils noted.
But not all of Lewin's reports see the light of day. "Let's just say, sometimes studies come out that don't show exactly what the client wants to see. And in those instances, they have [the] option to bury the study," Sheils said.

Lewin produced one of the most widely cited statistics of the health-care debate: Under a particular version of a public option, the number of people with private, employer-sponsored coverage would decline by more than 100 million.

Opponents of the public option have invoked the finding as proof that offering a government-run health plan would deprive people of their employer-sponsored coverage and lead to a government takeover of the health-care system. "The nonpartisan Lewin Group predicts that two out of three Americans who get their health care through their employer would lose it under the House Democrat plan," Cantor, the second-ranking member of the House Republican leadership, said in a July 12 commentary in the Richmond Times-Dispatch.

Since then, adjusting its analysis to reflect the latest version of legislation drafted by House Democrats, Lewin has estimated that 88.1 million workers would shift from private, employer-sponsored insurance to the proposed public plan. The Congressional Budget Office came to a different conclusion, saying that enrollment in the House Democrats' proposed public plan would total 11 million to 12 million people.

Insurance companies have been trying to block the public option, saying it would undercut their prices and put them out of business by slashing payments to doctors and hospitals. Though the millions of people Lewin was describing would lose their employer-sponsored coverage, they wouldn't be forced into a government-run health plan, Sheils said in an interview. Rather, they would be able to choose between the government plan and other private options, and "they might very well be better off," he said.

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