Valley Briefs Medical Acquisition North American Scientific Inc. has agreed to acquire NOMOS Corp. in a cash and stock deal valued at $56 million. Chatsworth-based North American Scientific and NOMOS are both radiation oncology companies that provide products and technologies for the treatment and diagnosis of cancers. North American Scientific’s products include brachytherapy seeds and radiopharmaceuticals. NOMOS supplies planning and delivery technology for radiation therapy. With the acquisition, North American Scientific will expand its portfolio of products. NOMOS, headquartered near Pittsburgh, will continue to operate its facilities there, in Europe and in China. The company’s management team and technical and support staff will also remain in place. The privately held company had revenues of $31 million in its most recent fiscal year. North American Scientific, with revenues of just under $20 million, reported a net loss in its most recent quarter of $2.8 million or $0.28 per share on revenues of $3.0 million. Power-One Improves Power-One Inc. reported a net loss of $3.6 million or $0.04 per share on revenues of $63.7 million for the third quarter ended Sept. 30. The company lost $198.5 million or $2.45 per share on revenues of $60.0 million in the comparable quarter last year. Camarillo-based Power-One is a designer and maker of power conversion products for the telecommunications industry. Company officials said they expect sales in the range of $60 million to $64 million in the fourth quarter of 2003 and a net loss for the period ranging from $0.05 to $0.08 per share. VICA Opposes Inclusionary Programs The Valley Industry and Commerce Association has issued a position opposing a proposed inclusionary housing program in the city of Los Angeles. The program under consideration by the Los Angeles City Council would require residential developers to set aside between 10 percent and 20 percent of new housing units at below-market costs for residents who are unable to afford market rents. “In a time when there is such a severe shortage of housing, the city cannot risk bad public policies like the inclusionary housing program, that will ultimately threaten, slow or completely curtail the development of new residential units in Los Angeles,” said Brad Rosenheim co-chair of VICA’s land use committee. DSW to Galleria DSW, a discount shoe retailer, has announced plans to open a store in the Sherman Oaks Galleria later this month. The Business Journal previously reported that DSW was close to a deal with the complex. The store will be the chain’s third in the San Fernando Valley. DSW also operates units in Northridge and West Hills. Nationally, DSW, which is based in Columbus, Ohio, operates 136 stores in 57 markets. United Online Revenue Jumps Once struggling Internet service provider, United Online Inc. posted a profitable third quarter with a 53 percent increase in revenue over the same period last year. For the quarter ending Sept. 30, Westlake Village-based company reported $8.9 million in net income or $0.19 per share on $88.8 million in revenue compared a year earlier when posted $1.5 million in net income or $0.03 per share on $58.1 million in revenue. During the quarter, the company reported a 132 percent increase in cash flow, going from $8.2 million a year ago, to $18.9 million. “We generated an impressive 173,000 new pay subscribers during the quarter, reinforcing our belief in the strong growth prospects for the value segment of the ISP market,” said CEO Mark R. Goldston. Many of the new subscribers came from the company’s free services through its NetZero and BlueLight Internet brands. “Average revenue per pay subscriber increased again this quarter and our billable services margin exceeded 70 percent for the first time in the company’s history,” Goldston said. The company estimates revenue for the current quarter will be between $93 million and 95 million. College Plans Technology Fair Los Angeles Valley College will host a technology fair to demonstrate student-created robots and equipment along with a job fair for technology firms from 11 a.m. to 1 p.m. on Wednesday, Nov. 12 at its campus, 5800 Fulton Ave. The event will feature representatives from the Boeing Co., Konica Minolta Business Solutions, Precision Dynamics, Rocketdyne Propulsion & Power, Superior Industries and others. The program will take place at Monarch Hall in the Campus Center, the Engineering Building’s room 108 and the Physics Building’s room 107. For more information, call (818) 947-2600. K-Swiss Seeks OK for Stock Split Westlake Village-based athletic shoe maker K-Swiss Inc. will call a special stockholders meeting sometime in December to seek approval for a proposed two-for-one stock split. The company says it seeks to split the stock of its Class A and Class B common stock and to expand its quarterly cash dividend from $0.02 per quarter to include the proposed split shares. The deal will increase the number of Class A shares from 36 million to 90 million and its Class B shares from 10 million to 18 million. For the quarter ending Sept. 30, the company reported $15.1 million profit or $0.80 per share on $121.6 million in revenue, compared to the same period last year when it reported $8.2 million profit on $81.6 million in revenue. For the current quarter, the company projects revenues to reach between $75 million and $80 million with earnings per share estimated between $0.37 and $0.42. Annual revenues are projected to reach between $425 million and $430 million, with earnings in the range of $2.55 and $2.60 per share. Last year the company reported $28.7 million in net income or $0.57 per share on $290.4 million in revenue. Fire Warnings Los Angeles County Supervisor Michael Antonovich has issued a warning to Valley residents and business owners to be wary of telephone and Internet scam artists seeking donations for bogus charities, specifically to help fire disaster victims and to donate to firemen’s funds in an attempt to cash in on the recent fires. Disaster-related scam calls tend to run high following high-profile fires, floods or earthquakes and Antonovich is recommending all charity calls or Internet inquiries from agencies that are not familiar, be fully vetted beforehand. To check on the status of a charity, call the Attorney General’s Office/Charity Registration division at (916) 445-2021.

Phone System Boosts Attorneys’ Efficiency in Court By SHELLY GARCIA Senior Reporter A technology commonly used in the business world is changing the way the courts handle their cases as well. It is a conference call system that allows attorneys to attend many of the more administrative hearings required without actually appearing at the courthouse. The system, provided throughout the Los Angeles court system by CourtCall LLC, cuts the time it takes to attend these types of hearings from hours to minutes, allows attorneys to expand their practices into courts up and down the state and can save clients a considerable amount of money in the bargain. “On an hourly basis, it can probably cut fees down about 20 percent, if you figure just travel time alone would be cut out,” said Allan Oberman, a Woodland Hills attorney. “On a three-and a-half hour appearance downtown two of those hours are spent traveling.” CourtCall was first tested in the L.A. area in the mid-1990s, but it is only in the last three years that it has been in use in greater San Fernando Valley courthouses. “It’s been going on for several years, but it’s caught on dramatically in the last year or two,” said James Felton, a partner at Greenberg & Bass in Encino. CourtCall, which now operates in 15 states and 47 counties in California, has wired 137 courtrooms in Los Angeles County and 26, or nearly 84 percent, of the civil courtrooms in the San Fernando and Antelope valleys. That’s up from just under 65 percent in 2001, the first year the effort was directed at the Valley. Although the system is beginning to move into some criminal courtrooms, its largest benefits are seen in the civil courts because civil practice attorneys can typically have cases in courthouses all over Southern California. “I really like it,” said Jim Curry, managing attorney at Bollington, Stilz, Bloeser & Curry, in-house counsel for 21st Century Insurance Group. “My office is in Woodland Hills. When I started practicing it took 25 minutes to an hour to get downtown. Now it’s an hour and a half to two hours.” Waiting game Status conferences meeting to determine how far along the sides have come in their discovery process or meetings to order the parties to mediation, another regular step in the civil litigation process, can take only minutes. But many such meetings are all scheduled at the same time, and attorneys are typically required to wait while other cases are heard. Many spend an hour at the court for a meeting that lasts for five minutes, and that doesn’t include the travel time. At $150 an hour, the low end of the range for attorneys fees, that means a client could spend $450 or more just to cover the expense of a five minute hearing needed to set a trial date. Mark Wapnick, a former attorney and president of Los Angeles-based CourtCall, who founded the company with another former attorney, Robert V. Alverado Jr., came upon the idea for the company because he was facing the very same circumstances. “In 1995, I had a one-minute court appearance in Orange County, and I commuted round trip a little over four hours,” said Wapnick. “I thought, I’m either going to eat this time, which is unacceptable, or I’m going to bill $300 of my very expensive time to my client, and that’s also unacceptable. They don’t need a $300-an-hour person driving.” Wapnick got back to the office and started working on the feasibility of a teleconferencing system that could be adapted for court use, and about a year later, tested the first system in two Los Angeles courts. But CourtCall lost out in the bid for the court-wide system to another company, and, under the competitor, the system was confined to the downtown courtrooms. The contract went back out for bid in 2000 and this time, CourtCall won it. Expansion Bolstered by business the company had developed elsewhere in the country in the meantime, CourtCall proceeded to expand the system in L.A. County. CourtCall provides all of the required equipment, including phone lines, speakers and fax machines for each court room, but each individual judge determines whether he or she wishes to have the conferencing system. “We sign up the judge and the judge will say, ‘I’m willing to allow court calls for the following kinds of matters at the following times,'” said Wapnick. “We then contact the lawyers. We can get the court calendars and we know which cases are being heard, so we let them know CourtCall is available at a particular time.” Attorneys, who pay a fee for each use ranging from $25 to $60 depending on the county, can determine which meetings they wish to attend by conference. “Some cases I do want to go in person because I want to talk to the attorney to find out where he’s going or discuss ways of getting it resolved,” said Oberman. The system works this way: Attorneys receive a pass code and a toll free number to call into at the appointed time. The pass code is set up so that only the attorneys in a particular court room are plugged into the same call. If the judge is hearing many cases during a morning, for example, each attorney just waits on the conference line until his or her case comes up. “Lawyers will listen and wait until they call their case, and there’s a variety of different services,” said Wapnick. “Some judges handle certain hearings in chambers and only want lawyers on that case to hear what’s going on. In that case, the operator puts only those lawyers into the call. Others are just like what happens in the open courtroom the lawyer is given a toll-free number to dial into and pass code that will get them into that appearance on that day and time.” Besides the time and cost savings, the system has also been used to handle unexpected problems that come up in scheduling, Wapnick said. “We had a judge call us one day and say, I’m home with the flu and I have a whole courtroom,” Wapnick recalled. “We said, ‘Fine, dial into the court,’ and the judge used the service.” In the greater Valley area, the system is now available in courthouses in Van Nuys, San Fernando, Chatsworth, Glendale, Burbank and Palmdale. Privately-held CourtCall does not release revenues, but the company has grown to 70 employees and has operations in California, Florida, Georgia, Indiana, Louisiana, Maryland, Michigan, Mississippi, New Jersey, New Mexico, Texas, Utah, Washington and West Virginia. The company is set to expand into New York in the next few weeks. In addition, CourtCall operates in federal district and bankruptcy courts in California, New York, Hawaii, Illinois, New Jersey and Oregon. Both partners have since given up their law practices and devote themselves full time to CourtCall.

NEWSMAKERS Advertising Dan Meyers has been named account supervisor at Westlake Village-based Bear Advertising. He had previously served with Gateway computers and CompuCom Systems. Athletic Clubs Reseda-based Mid Valley Athletic Club has named Steve Wright general manager. He had served with a fitness chain and a non profit organization previously. The company also promoted Cindy Gironda marketing manager. She had held marketing and management positions with the Los Angeles Zoo Association, the Tony Fitzjohn African Wildlife Foundation and the Born Free Project. Boards The California Lutheran University Board of Regents has added five new members. They are: Michael Bradbury, Ojai resident and former Ventura County district attorney; Kate McLean, Thousand Oaks resident and former executive director of the Ventura County Community Foundation; Rod Gilbert, Santa Barbara resident and president of the TOLD Corp.; Sarah Heath, Santa Barbara resident and former international management consultant; and Yale Gieszl, Rolling Hills resident and senior advisor to Toyota Motor Sales USA. Re-elected to the board were: Randy Kohn, Pasadena resident and managing director of Western Asset Management; Bill Kane, Chatsworth resident and partner with Ernst & Young; and James D. “Jamey” Power IV & #184; a Westlake Village resident and executive vice president of international operations with J.D. Power & Associates. Dr. Joseph A. Bellanti has joined the board of directors of Woodland Hills-based Advanced Biotherapy Inc. He is a professor of pediatrics and microbiology-immunology and director of the International Center for Interdisciplinary Studies of Immunology at Georgetown University School of Medicine. Entertainment Universal Studios Hollywood has appointed Phil Costner to the newly created position of senior vice president of food service and retail. Brian Bacica was named vice president, food service operations. In his position, Costner will be responsible for all retail operations for Universal Studios Hollywood. He will retain responsibility for food service at the park’s 17 restaurants. He continues to report to Larry Kurzweil, president, COO for Universal Studios Hollywood. Brian Bacica will be responsible for all daily operations, budgeting, staff development and long term planning for Universal Studios retstaurants and outdoor vending locations. Bacica will report to Phil Costner. Costner has been with Universal since 1993 and has worked in the Universal City and the company’s Orlando locations. Bacica joined Universal in 2002 from Disneyland Parks. Touchstone Television, a unit of the Walt Disney Co., has promoted Jim Gaston, Brenda Kyle and Victoria Lafortune to vice president production posts. The company also promoted Michael Villegas and Paula Warner-Schlenker to vice president postproduction posts and Jean Hester to director of production operations. Foundations The Woodland Hills-based California Endowment has named Kim Belshe executive vice president. She has been the program director for James Irvine Foundation in San Francisco. Belshe had headed the California Department of Health Services, previously. Health Care Jay Gellert, president and CEO of Woodland Hills-based Health Net, has been re-appointed chairman of the Administrative Simplification Committee of the Council for Affordable Quality Healthcare, a non-profit alliance of health care networks. Real Estate Westlake Village-based Troop Real Estate has added Jan Bigotti to its staff of real estate professionals. She had served at Prudential California Realty previously. J. Tucker Brown has joined CB Richard Ellis’s Sherman Oaks office as a broker specializing in industrial properties and business development within the East and Central Valley markets. He was formerly with CB’s Anaheim office. Technology Voice Print International has named Darryl Corrigan vice president of enterprise support services. He had served for nearly 10 years as assistant vice president of information services at Liberty Funds Group in Colorado. Derrick Coppinger has been promoted to national sales manager at Calabasas-based National Technical Systems. He had been vice president of laboratory sales and will now report to President and Chief Operating Officer William C. McGinnis. Coppinger joined the company in 1998. Westlake Village-based CaminoSoft Corp. has appointed Paul Phillips as director of operations for its Europe-Middle East-Africa region. He will report directly to Stephen Crosson, company CEO.

Capitol Punishment: The Power of Voter Fear and Anger Guest Column by Gregory N. Lippe The voters have spoken. Governor-elect Schwarzenegger says “Politics as usual, are dead,” as he reaches out to both parties to repair the financial disaster that has befallen our state. There’s a general mood of excitement in the air. Legislators from both parties are speaking optimistically about working together to find compromise solutions. The scapegoat has been sacrificed. The impediment to effective solutions has been removed. Now there’s nowhere to go but up. Ah, how wonderful it will be. But wait. Aren’t the legislators that are now so willing to compromise the same legislators that were so unwilling before? What accounts for this dramatic change? What is this phenomenon? Is it Arnold Schwarzenegger? Surely, he appears to have the qualities necessary to be an effective leader. He is disciplined, strong, intelligent, willing to listen and learn, does not appear to have pre-conceived ideas of what can and cannot be done and owes nothing to special interests. I believe that Governor-elect Schwarzenegger can and will be a great leader. However, I believe that what changed the attitudes of our legislators is fear, the fear of losing their jobs. We have just experienced the first successful recall of an elected official in our state’s history. Alas, there is no sacred cow! The number of registered Democrats far exceeds the number of registered Republicans, yet in an election with a significantly larger voter turnout than usual, a Democrat incumbent was replaced by a Republican, having no previous political experience. For this to happen, a significant number of registered Democrats must have voted against their party. So what caused a significant number of registered Democrats to vote for an inexperienced Republican candidate? I submit that it had to be substantial anger, anger with the state of our economy, anger with the budget deficit and anger with politics. In a move reminiscent of the demonstrations of the ’60s, the people have taken control. The hippies and yippies of the ’60s are now “the establishment” and they wield a mighty sword. Their anger can just as easily be directed toward our legislators as it was toward Gov. Davis. I believe our legislators realize this, that they are fearful and that we, the people, will benefit. We have a new gatekeeper to help prevent anti-jobs/anti-business legislation from being enacted. Gov. Davis signed far too many job-killer/business-killer bills into law. Now that our legislators have had their security shaken, it is important to keep the pressure on to make sure that compromise and effective solutions remain at the top of their priority list. The following are the anti-business bills I have chosen to profile this month: – AB 196: Expands the prohibition on sexual discrimination and harassment by including gender, as defined, in the definition of sex. The bill would permit employers to require employees to comply with reasonable workplace appearance, grooming and dress standards consistent with state and federal law, provided that employees are allowed to appear or dress consistently with their gender identity. This bill creates a new basis for employment discrimination lawsuits under the Fair Employment and Housing Act. The potential additional costs of insurance and litigation are a disincentive for the creation of jobs and an incentive to utilize fewer employees. Status: Passed Assembly and Senate, approved by governor Aug. 2, 2003. Valley legislators voting for bill: Assembly, Frommer, Koretz, Levine, Montanez, Pavley; Senate, Alarcon, Kuehl, Scott. Valley legislators voting against bill: Assembly, Richman, Strickland; Senate, Knight, McClintock. – AB 944: Expands the authority of property and business improvement districts created under the Property and Business Improvement District Law of 1994, to levy assessments on businesses for the purpose of making improvements and promoting “activities of benefit” to the businesses within the district. These assessments will circumvent the protections afforded by Proposition 218, which requires that local governments’ authority to impose taxes, property-related assessments and fees be subject to voter approval. The result will be increased costs to businesses, increased costs to consumers and potential reduction in jobs. Status: Passed Assembly and Senate, approved by governor Oct. 10, 2003. Valley legislators voting for bill: Assembly, Frommer, Koretz, Levine, Montanez, Pavley; Senate, Alarcon, Kuehl. Valley legislators voting against bill: Assembly, Richman, Strickland; Senate, Knight, Margett, McClintock. – SB 103: Currently, in conformity with federal income tax treatment, regulated investment companies (RICs) pass ordinary income on to the shareholders without incurring any tax liability at the corporate (company) level. This bill eliminates the conformity with federal law and taxes RICs income both at the corporate level and again at the individual level (as dividends) when the income is passed on to the shareholders. Status: Passed by Senate and Assembly, approved by governor Oct. 2, 2003. Valley legislators voting for bill: Senate, Alarcon, Kuehl, Scott; Assembly, Koretz, Levine, Montanez, Pavley. Valley legislators voting against bill: Senate, Margett, McClintock; Assembly, Strickland Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA).

VALLEY FORUM – Close Call On Oct. 31, the Valley legal community and citizens in general were shocked when they watched the shooting of attorney Gerald Curry at the Van Nuys courthouse by a man whose legal financial trust Curry was representing. Curry survived the incident which was caught on videotape by camera crews at the courthouse for the Robert Blake case. So the Business Journal asks local attorneys: Does the assault make you feel more vulnerable, and/or will it change the way you deal with certain cases? Barry Harlan Lewitt, Hackman, Shapiro, Marshall, and Harlan Encino I just think it heightens the awareness that family law is an emotional field. It makes the issues more readily known. These kind of terrible incidents often happen in family law, and I certainly feel more vulnerable. Robert Alan Adelman Adelman and Seide LLP Encino I am a family law attorney like Gerald Curry and it is probably the most dangerous of all of the legal niches. Because of the high degree of emotion running through the field I’m already extremely vigilant. So no, it probably won’t change me at all. Stephen Beecher Beecher & Bowers Chatsworth It’s a very interesting question. Knowing that the attacker wasn’t fully competent, I’d say that overall I probably don’t feel more vulnerable. I don’t think that the assault will yield a plethora of assaults. You’ll always have disgruntled clients. I’ve received threats myself and I take them seriously, but I don’t think it will alter the way I live my life. Gary Barr Alpert & Barr Encino No, I don’t think it makes me feel more vulnerable. I think most attorneys have always been cautious. I think that if it does make me more cautious then I should probably get out of the business because I might not be representing my clients properly. Fred Gaines Gaines & Stacey Encino It absolutely makes me feel more vulnerable. It makes you consider certain people that you’ve had cases with and how heated they’ve gotten, to the point of where it raises worries. It might not change the way you deal with individual cases, but it will make you be cautious with those clients that clearly can’t contain their emotions.

Valley Theaters Get Some Movement in Pre-Show Ads By CARLOS MARTINEZ Staff Reporter Valley filmgoers may have noticed something new this past month at their local movie theater. Those once static slides accompanied by sound that pushed everything from cell phone service to newspapers shown just before film showings are now largely gone. Instead, they have been replaced by moving images powered by a new PC-based system being rolled out at a number of theaters in the Valley this month. “The San Fernando Valley is really one of the best locations to roll out this technology because of the number of theaters it has,” said Chuck Battey, president of Kansas City-based National Cinema Network, a unit of AMC Theaters Inc. The new system, dubbed “Digital Theatre Distribution System,” or DTDS is making its initial rollout in the Valley, parts of Los Angeles and 10 other major U.S. markets. Theater operators could purchase the system or rent it. But Battey would not say how much each system would cost theater owners or what the rental rate was. The change is meant to attract more business to local theaters which use the brief spots running usually 30 seconds to sell advertising. “We’ve already seen a jump of between 30 and 70 percent in business for the spots in our Kansas City test market,” Battey said. So far, the public response has been positive, said AMC spokesman Rick King. “Our guest reaction is much better to the DTDS programming than to the static slides we used to show,” he said. “The higher the quality of our pre-show materials, the better they are accepted by our moviegoers.” Under the new system, advertisers will have the chance to develop advertising programs featuring computer animated messages or specially-edited 60-second music videos and presentations animated via a system resembling flash animation. “The great thing about this system is that it’s much less expensive than video and can be put together quickly by our technicians,” Battey said. In development over the last five years, the system replaces a slide projector which was used to project advertising for local merchants and businesses, coupled with a soundtrack or music. The new system, however, uses a personal computer using an Adobe Photoshop-based program that is hooked up to a special projector that can show animated images of advertising content. The system was rolled out last week in a slew of Valley theaters, including AMC Promenade 16 in Woodland Hills, Burbank Media Center’s two theater complexes and scores of other Valley theaters operated by several chains, including Mann, Pacific Theaters, CinemaStar and Southern California Theaters. Nationwide rollout Altogether, the company plans to roll out the system in Chicago, Dallas, Philadelphia, Atlanta, Houston and New York to cover an estimated 1,200 screens or an estimated 80 million theatergoers annually. The system, aimed at improving revenue for a struggling industry, has been welcomed by theater operators. John Fithian, president of the National Association of Theater Owners, said the industry has been hurt by the popularity of home entertainment like video games, the Internet and DVDs and is only now beginning to rebound. Despite huge crowds jamming theaters showing such hits as “Pirates of the Caribbean,” in recent months, troubled theater chains like Regal Entertainment Group, Mann Theaters and AMC are still trying to recover from a down economy and overall decline in total theatergoers in the last few years. The construction boom of megaplexes of the late 1990s which resulted in a glut of movie theaters helped kick start the industry’s troubles today, said industry analyst Dennis McAlpine, who heads MacAlpine Associates. Many companies like Edwards Cinemas, Regal, United Artists and others were forced to file for bankruptcy protection in 2001 as they closed scores of underperforming theaters around the country. But the closures coupled with some solid performing films last year and so far this year, have helped improve the overall picture, said Bishop Cheen of Wachovia Securities. Efforts to improve theaters’ bottom line like discounted tickets or National Cinema’s advertising projection system are welcome, he said.

Zenith Soaring to New Highs Despite Industry Uncertainty By CARLOS MARTINEZ Staff Reporter Thanks to its workers compensation insurance business in California, Woodland Hills-based Zenith National Insurance Corp. is experiencing its biggest numbers ever. Because workers’ compensation represents about 90 percent of Zenith’s business with the bulk coming from California and Florida, the company’s latest revenue figures show a marked improvement over last year. For the quarter ending Sept. 30, Zenith reported a $16.1 million profit or $0.85 per share on revenue of $218.4 million, compared with $8.7 million profit or $0.46 per share on revenue of $163 million for the year-earlier period. During the quarter, workers’ compensation premiums written grew by 39 percent during the quarter compared to figures from a year earlier. In California alone, the number of workers compensation premiums written increased by 62 percent over the same period last year, the company said. Stanley Zax, company chairman and president, refused to comment. But in a statement, he said the company’s performance was due to “the favorable rate environment, increased cash flows and our focused service strategy.” With workers comp rates on the increase, the company’s numbers figure to continue to climb, say analysts like Ira Zuckerman of Connecticut-based Nutmeg Securities Inc. “They’re very competitive in pricing and they’re basically one of the few companies specializing in that that are left standing,” Zuckerman said. As workers’ comp rates began climbing, more companies left their longstanding insurance carriers to go with the state’s Insurance Fund which offered worker’s comp insurance at lower rates than many insurance carriers, Zuckerman said. This move, he said, forced many carriers out of business or away from the segment altogether. “They were able to survive because they were affordable and provided good customer service,” Zuckerman said. “Their strategy has been to focus on medium to small businesses instead of the big ones which change carriers a lot, and that’s helped them.” It was just a few years ago that Zenith was facing tough times as its market share declined and its revenue continued to drop. The company’s troubles began in the mid-1990s when laws were passed allowing insurers to set their own premium rates. Competition The deregulation, coupled with a drop in claims forced insurers to cut their rates to better compete. But in 2001, Zenith’s fortunes turned when state regulations required companies to have more workers’ comp coverage. This regulatory change set off a chain reaction in the market that pushed workers’ comp insurance to increase to increasingly unaffordable levels. The company managed to grow its business by consistently beating its competitors with lower rates. As the company’s finances improved its stock has continued to climb. So far this year, its shares have remained around its 52-week high of $30.90 reached on Nov. 3, closing last Thursday at $31.58. Zuckerman projects the stock will hit $45.12 by next year, but cautioned all could change, depending on whether the state legislature and Gov.-elect Arnold Schwarzenegger will be able to revamp the workers’ comp system. “It they force a rate cut and a cost cut on the industry at the same time, you can still make money, but costs need to be cut if that’s going to happen,” Zuckerman said. The trouble with the industry, he said, are regulations that allow seeming unlimited visits to chiropractors and doctors, increasing costs for insurers and employers. “There are just too many phony doctors and chiropractors out there that keep workers comp costs high,” he said. Today, the company’s cash flow has been improving, with about $179 million in cash set aside for future claims and a debt of $186 million. Zuckerman predicted costs of premiums will go down, but that Zenith will continue to grow its business albeit at a slower clip than this year.

Budget Cutting Disrupts Work At Courthouses By SHELLY GARCIA Senior Reporter Already crammed court calendars could be facing even greater pressure if another round of budget cuts hits California courtrooms as expected. So far, no one really knows how the revised mid-year budget due shortly will shake out, but with several anticipated sources of additional revenue for the state now in question, many think it’s a sure bet that the courts will be forced to make additional cutbacks in staffing and operations. If so, the civil courts will feel the greatest pain, perhaps facing fewer courtrooms for trials and longer waits for resolutions when the mid-year budget is revealed sometime in January. “I represent smaller companies and they’re impacted greatly because it’s money out of their pocket,” said Christine Lyden, a business and real estate litigation attorney in Woodland Hills. “If we lose judges, that’s obviously going to fall on clients. There’s nothing worse than waiting three or four hours to find out if there’s going to be a courtroom and finding out there’s not.” The courts recently moved to increase filing fees in an attempt to raise additional funds, but few think the move will be enough to cover the shortfall. “The news is more negative than positive,” said Larry Grassini, whose Woodland Hills firm, Grassini & Wrinkle, specializes in representing plaintiffs on major personal injury and product liability cases. “What’s happening is the budget compromises reached with the legislature and some of the fees that were supposed to be brought in are not covering, so there may be additional budgetary cuts that will need to be made by the courts.” Courthouses in the San Fernando Valley, including Van Nuys, Glendale, Burbank, Chatsworth, San Fernando and in Santa Clarita Valley, like many across the state, have already been strained by cuts made last year in anticipation of the 2003-2004 fiscal year budget. Countywide, some $57.3 million was sliced from the operating budget; 29 courtrooms were closed; 250 employees were pink slipped and another 300 to 400 jobs that became open were not replaced. About $20 million or $25 million alone came out of services and supplies, said Allan Parachini, a spokesman for the Los Angeles Superior Court. “Sometimes one wonders where the Post-its are,” Parachini said. “Toner cartridges are particularly precious.” Some courtrooms now share court reporters on Fridays, reducing the number of cases that can be heard, and judges in Van Nuys now share one research attorney. Painful as they were, the cuts were made with the hope that the courts could “avert catastrophic pain this year,” Parachini said. But developments since then may mean that all bets are off. Fund challenges A plan to raise funds to cover California’s deficit with a bond issue is under challenge in the courts and may not come to pass. Another challenge underway may reduce the property taxes the state collects. And Governor-elect Arnold Schwarzenegger is expected to repeal the car registration tax increases once he is sworn in on Nov. 17. “Regardless of what he may conclude about expenditure levels, when you throw in vehicle license taxes and the $12.9 billion at risk in these bond challenges, we’re talking about $16.5 billion,” said Parachini. “That’s a huge unknown to plan around.” Parachini said the court’s “worst case” scenario calls for additional cuts in the neighborhood of $27 million. But no one knows how Schwarzenegger, with no political history behind him, will rank the courts among the many pressing priorities, nor is it clear how the cuts would be apportioned to the L.A. courts, which account for about 40 percent of the statewide trial court expenditures with a total budget of about $670 million, including judges’ salaries. Complicating matters even more is that many of the court’s costs healthcare and retirement, for instance are fixed. The Los Angeles County Sheriff’s Department has already agreed to a $10 million reduction in its contract to supply bailiffs and other security personnel to the courts and negotiations with the other unions involved in the system are underway, but those contracts do not include clauses that allow wages re-opened. What’s especially troubling to attorneys and judges is that, with all the pressing needs throughout the state and the shortage of funds, politicians may find it easier to sacrifice the courts, said James R. Felton, president of the San Fernando Valley Bar Association, which has launched a letter-writing campaign. “It’s a whole lot easier to cut from the court system than from, say, parents of autistic children seeking more services, because the court system doesn’t have eyes and ears and a pretty smile,” Felton said. “I’m not suggesting that those services aren’t important. But it’s so easy to cut things that don’t have a face on them, and it doesn’t mean they’re any less important. So what we’re trying to do is make sure that the governor-elect and the legislature knows that they have to be careful.” If more cuts are in the offing, the likelihood is that the number of bailiffs, court reporters and a myriad of other support staff needed to run a courtroom will be reduced, in effect decreasing the number of courtrooms that can be utilized at any given time. The brunt of the pain will be felt by civil trial attorneys because the laws governing criminal actions lay down specific timetables for the process, and available manpower would have to be diverted to the criminal courts in order to meet those deadlines. Forcing settlements? Civil attorneys worry that the resulting delays would not only interfere with trials, they could also force more clients to settle their cases out of court. “Justice delayed is justice denied,” Grassini said. “When you start taking cases and changing the time from one year to two, three or four years, a lot of things happen. People die. Witnesses move away. It’s more difficult to move cases.” Attorneys say that the increased filing fees have already placed an additional burden on small businesses that are seeking redress through the courts. Effective in August, the cost to file a limited civil case seeking damages from $10,000 to $25,000, increased to $277.50 from $128 previously, for instance. Probate filings for estates valued between $250,000 and $499,999 increased to $316 from $224.50 previously. For estates between $1 million and $1,499,999, the fee rose to $1,141 from $224.50 previously. Motions, stipulations or requests for continuance will now cost attorneys $110, up from $23 previously. “That stuff adds up,” said Lyden. “If you have an electrician, and let’s say he’s owed $15,000 on a job and this happens a lot he’s out this big chunk of money and now he’s got to come up with two-hundred something dollars plus pay me to file a complaint. It makes it much more difficult for small business.” The end result, these attorneys say, is that more than ever clients with few financial resources will be forced to settle their cases out of court. That already happens in the majority of cases, but attorneys say they worry about those lawsuits that are brought, not because of the potential financial reward, but rather to prove a point. “Some people feel it’s critical to them psychologically that they have their day in court,” said Alan Oberman, a civil litigator with offices in Woodland Hills. Oberman and others say that, already, many clients are often forced to settle out of court for economic reasons, and the settlements are always far less than what these attorneys believe they would have received had the case proceeded to trial. That trend, they say, is likely to become more prevalent in the coming year. “They’re pushing more and more outside the courtroom, and trying to get more cases resolved outside the court,” said Oberman. “I think that’s more of what you’re going to see.”

Valley Outpaces City, County in Recovery By JACQUELINE FOX Staff Reporter Like most of Southern California, the Valley economy took a beating during the eight quarters between 2001 and 2002, hit particularly hard by job losses in the entertainment and manufacturing sectors. But by comparison, the Valley’s recovery from the recession seems to have outpaced that of the city and county throughout most of 2002, beating out projections for population growth and showing recovery, albeit modest recovery, across some business sectors, according to a report released Nov. 7 by the San Fernando Valley Economic Research Center at Cal State Northridge. Job growth in the Valley picked up steam in 2002, with private sector employment figures up by 2,000 jobs following a loss in 2001 of nearly 4,900 jobs. Although mild, the Valley’s 0.3 percent job growth in 2002 outperformed citywide figures of -1.6 percent and statewide job growth of -1.0 percent. CSUN officials who compiled the data for the report, called the San Fernando Valley Economic Report 2003-2004, are projecting the remainder of those Valley jobs will be recovered by 2005. “The Valley weathered the recession well and for the year 2002 we were definitely at a gaining point,” said Dr. Daniel Blake, the center’s director. Blake presented the report, which, for the last five years had been called the Report of Findings, during the Valley Industry and Commerce Association’s Annual Business Forecast Conference. “We project that the rest of those jobs previously lost will be recovered this next full year. Actually, predictions are for figures that will give us a few hundred more (jobs) than what we lost.” The report’s findings are based on a combination of data from Census 2000 figures as well as information provided by several local and state agencies, and reflects data available as late as August 2003. Valley private-sector payroll figures grew by 1.5 percent in 2002, according to the report, however, with adjustments for inflation those figures actually slipped by 1.2 percent over 2001. Nonetheless, there are contrasts: countywide, real private sector payroll dipped by 2.6 percent and, statewide, the figures fell by 4.5 percent. “It’s modest growth, but it’s better to grow slowly than not at all,” said Blake. Unemployment insurance claims for the Valley dipped slightly in 2002 after hitting an eight-year high in the second quarter, but according to the report, remain high and began climbing again during the first half of 2003. The number of claims shot up to nearly 34,000 in the first half of 2002, fell below 25,000 claims by the end of the year, but as of the first of this year shot back up to just under 30,000 claims. The 2003 spike, said Blake, could be due to a combination of seasonal unemployment patterns and unemployment insurance extensions offered in late 2002. Housing boost It should come as no surprise that the Valley’s housing market, fueled by record-low interest rates, helped prop up the local economy throughout the recovery. Median home prices in the Valley rose to $369,000, compared to a median price of $326,000 countywide. As a result of the strength of the market, housing inventories in the Valley declined in 2002 to a 2.1 months supply, down from 2.8 months in 2001. Despite the recession, home appreciation values kept notices of default and foreclosures on a downward trend, with the Valley’s share of countywide foreclosure figures down from the peak of 30 percent following the 1994 Northridge earthquake to between 13 and 15 percent in 2002 and holding steady. Rental vacancies in the Valley remained below 3 percent in 2002, sending average rents at large multi-family dwellings soaring by 6.3 percent. According to the report, rents are expected to increase by 8.0 percent for 2003, which could have an impact on consumer spending going into the following year. The Valley’s information industry, a new Census classification, now includes telecommunications, Internet service and other information processing sectors with entertainment, publishing and broadcasting. That sector emerged as the Valley’s largest employer with 92,500 jobs and 22 percent of the private sector payroll. But the industry also lost 6.0 percent of its jobs in 2002 as runaway production, a declining orders for upgrades by businesses in their information systems and other factors continued to come into play. “The Valley has and will continue to have significant exposure to the motion picture industry, and they are definitely being impacted by runaway production,” said Jack Kyser, chief economist for the Los Angeles Economic Development Corp. Kyser joined Blake as a speaker during VICA’s forecast conference. He said prior to the event that he intended to offer data at the event that backed up the Valley’s strength against the city and county as a whole, pointing out that the area has continued to see major expansions of $1 million or more for local businesses with 19 this year so far, down only two from 21 in 2002. “Basically what that shows is that business has been struggling with a difficult environment, but they have been and are still planning to expand,” said Kyser. “The real question is how many jobs will they add?” Local pressure Bill Powers, chairman of the United Chambers of Commerce of the San Fernando Valley said he wasn’t surprised the Valley showed stronger growth than the rest of the region. He also said he’s optimistic that Gov.-elect Arnold Schwarzenegger’s pro-business policies will spur further growth, but cautioned that, on the local level, more pressure must be put on elected officials if that recovery is to remain on track. “I think the Valley has been a mainstay of the local economy for many years and I think it’s a tribute to the strength of the economy as a whole that we have faired so well,” said Powers. “But the city fathers need to hunker down and realize that their decision making is the same kind of decision making that led to the recall of Gov. Davis. They need to think about businesses as an ally rather than an enemy.” According to the CSUN report, manufacturing was the second largest industry in 2002 with 82,900 jobs and 13 percent of the payroll. However, the recession did force job losses in the Valley of nearly 10 percent. Losses in information and manufacturing sectors were offset, however, by a 4.5 percent jump in the finance, insurance, real estate and leasing/rental industries, 3.5 percent growth in retail, 2.7 percent growth for biotech and 2.5 percent growth in the construction industry. The Valley population also outperformed previous projections in 2002 with growth averages of 1.8 percent, instead of a previously estimated 0.6 percent. The Valley gained 27,500 more people in 2002, with roughly 6 percent of those individuals coming from somewhere else in the state, 7 percent from outside California and 11 percent from another country. Passenger levels at Burbank Airport, according to the report, are back up to pre-9/11 levels. Hotel occupancies remain down, however, by about 5 points, but Blake pointed out that those losses reflect room-rate cuts of about 5 percent. Two quality of life issues reflected in the CSUN report show flat performance, which is both good news and bad, considering the categories: Crime remained stable in 2002 over 2001 levels in the Valley, but there are no indicators showing that freeway traffic improved.

New Challenges in Jury Selection By SHELLY GARCIA Senior Reporter Time was, a lawyer looking over the waiting jury pool found retirees, government employees and students. But today’s jurors are just as likely to be doctors, CEOs, even judges. The change in juror demographics has come as a result of a new system that seeks to grease the wheels of justice by casting a wider net for jurors and, in turn, limiting the time each is required to serve. But if the one-day, one-trial system has expedited much of the process, it has also changed it in ways that can be critical to a system where the outcome of a trial may depend as much on the jury selected as on the case presented. “The most noticeable effect is it’s much harder to get a jury now,” said Ann Marie Wise, a deputy district attorney assigned to the Van Nuys Court. “We get a lot more excuses because judges are not letting people out for hardship, so they’re getting a lot more creative.” Under the one day, one trial system, which has been phased into the Los Angeles court system over the last four years, jurors not selected for a trial after the first day or the completion of a jury selection are excused if they haven’t been selected. Before, a potential juror would have to remain available at the courthouse for a 10-day period. The system was put into place in response to criticism that so much time was wasted while jurors sat around in the courthouse for days or weeks, often without ever serving on a trial, and it has greatly reduced the time workers spend away from their jobs. It has also increased the pool of jurors because the courts contend that the new, less onerous system allows nearly everyone to be available for service. But implementing the one day, one trial system has also meant stricter rules about who can be excused from jury service because a smaller group of jurors is made available each day, and the courts must make certain they have enough bodies to fill the juries that are impaneled on that day. Judges are no longer willing to excuse the self-employed, those who are not reimbursed for service by their employers, or those who simply claim their absence would constitute a business, personal or financial hardship, for instance. Attorneys say that’s opened a whole Pandora’s Box of excuses during voir dire, a term which translates as “to speak the truth,” and refers to the process of questioning jurors to determine their suitability for a particular trial from the ridiculous to the self-righteous, Take the entertainment industry executive who insisted he would be unfair to the prosecution because he believed everyone was innocent. Or the defense attorney who used his moment of voir dire to expound on the inequities of the criminal justice system in Los Angeles. Under pressure Attorneys say they now have to sift through these and other excuses to determine whether a juror might do more harm than good to their case. And they have to do it under a time pressure that did not exist under the old system. “Especially under one day one trial, there’s an urge on the part of the court to get it done fast,” said Steve Meister, co-chair of the criminal law section of the San Fernando Valley Bar Association. “Depending on the case, depending on the panel, sometimes that benefits one side or the other. You might not win a case in argument, but you may win it in jury selection.” Under the old system, attorneys say they were able to use the challenges they have available in the selection process to dismiss jurors who, for instance, said they had to be home to shuttle their kids to soccer practice, if the judge was unwilling to do so. But now, there simply would not be enough jurors for the trials scheduled if attorneys were to indulge those who asked to be excused. Though attorneys stopped short of saying one day one trial has impacted the outcome of their cases, they do say it has presented some new challenges. Chief among them is the mindset of jurors they have available. With fewer jurors dismissed from duty, a panel is likely to include more jurors resentful over being in court, and attorneys are going to some lengths to make sure the resentment doesn’t spill over into the trial. A more diverse pool, with varied life experiences and high levels of responsibility in their jobs, can be a benefit, whether it’s the prosecution or the defense, attorneys said. “Plaintiffs always want jurors who want to be on the jury,” said Larry Grassini, a partner at Grassini & Wrinkle, a Woodland Hills firm that specializes in representing plaintiffs on personal injury and product liability cases. “The plaintiff brought the case. So if they start out with the feeling that they wish they weren’t there, the person who caused them to be there is likely to suffer.” Attorneys on either side of the table also say they now have to be more cognizant than ever of the need to acknowledge jurors’ time, particularly since jurors under the new system are more likely to have other pressures and responsibilities outside the courtroom. “Sometimes jurors appreciate it when your cross examination is brief. That may be because you don’t have anything to ask that will benefit you,” said attorney Steve Meister, co-chair of the criminal law section of the San Fernando Valley Bar Association. “But you can make it sound like you’re doing it for the benefit of the jury.” Taking over Another issue arising from the types of jurors who now serve is that a judge or another attorney or even a high-powered chief executive officer, now all the more likely to be on a panel under the revamped system, could take over the process because of their stature, and a deliberation that should involve 12 jurors boils down to the opinion of one. “If you’re going to take the case to one person, you may as well take it to the judge,” said Grassini. “It’s always something we’ve had to be aware of, it’s become a little more prevalent.” Under the old system, jurors often served over and over again because it was the same jurors who were willing to serve, often retirees, government employees or those employed by huge corporations with liberal payment policies for those on jury duty. That familiarity with the process was helpful, attorneys say, in speeding the process along. “People with experience doing jury service come back quicker,” said Maureen Green, a deputy district attorney assigned to the Van Nuys Court of the time it takes a jury to reach a verdict. “They pick the foreperson; they go over the instructions, they get it done. You’ll notice if the jurors you pick are inexperienced, they may be out longer.” But the old system also limited the range of experience of the jurors on any given panel, and attorneys agree that, more often than not, such a panel was not advantageous. “Don’t forget the cases that go to trial because the crime is so horrific, there’s no deal (possible) or it’s a weak case for the defense,” said James Blatt, a criminal defense attorney in Encino. “When you have try-able cases, most defense attorneys agree you would want the most educated, highly intelligent jurors you can find. They weigh the evidence, they look at reasonable doubt.” A more diverse pool, often with jobs that carry a high degree of responsibility, can be a benefit, whether it’s the prosecution or the defense, attorneys said. “From the prosecution standpoint, you want someone who is invested in the system,” said Deputy D.A. Green. “You want people who are pro-system, not anti-authoritarian, people who tend to trust the prosecution.” Indeed, when all is said and done, attorneys say they believe that jurors want to do the right thing, no matter their attitude coming in, and the new selection process has only served to renew their faith in the system overall. “Once you step inside the courtroom, most people rise to the occasion,” said Robert A. Schwartz, a criminal attorney and past president of the Los Angeles Criminal Courts Bar Association. “And they divorce themselves from their day-to-day concerns and give it their all.”