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Author: WorkCompAcademy

WCAB (En Banc) Limits Replacement QME Process

Abel Vazquez was employed as a seasonal agricultural worker by Inocensio Renteria on March 17, 2017, when he sustained an industrial injury to his left ankle and left calf, and claims to have sustained injury to his left lower extremity, psyche, and in the form of hypertension, diabetes, and hyperlipidemia.

Ira Fishman, M.D., was selected as a QME to evaluate the compensability of applicant’s internal complaints, and issued two reports. Dr. Fishman initially evaluated applicant on May 21, 2021. On May 31, 2022, he issued a supplemental report following his review of additional records.

On July 29, 2024, applicant requested a re-evaluation with Dr. Fishman.The next available evaluation date was for December 2, 2024, which was 127 days later.

On August 5, 2024, defendant requested a replacement panel pursuant to AD Rules 31.3(e) and 31.5(a)(2), because the re-evaluation appointment with Dr. Fishman was scheduled more than 120 days from the date of applicant’s request.

On August 15, 2024, applicant objected to the request for a replacement panel, arguing that the time limits only applied to initial evaluations and not to subsequent evaluations. Defendant responded to applicant’s letter by citing AD Rule 31.3(f) and arguing that the timeframes for QME appointments apply to both initial and subsequent evaluations.

The Division of Workers’ Compensation (DWC) Medical Unit issued a replacement panel on September 12, 2024. Applicant objected, and the issue of whether a replacement panel was appropriate was set for trial. The WCJ found that defendant was entitled to a replacement panel due to the QME’s inability to set an appointment within 120 days.

The WCAB sitting en banc (Lab. Code, § 115.) granted applicant’s petition for reconsideration in the case of Vazquez v Inocensio Renteria -ADJ11017003 90 Cal.Comp.Case ___ (May, 2025). It rescinded the March 11, 2025 F&O and return the matter to the trial level for further proceedings.

In doing so it held that:

1. Only the Appeals Board has jurisdiction to determine whether a replacement panel is valid or otherwise appropriate.
2. In a represented case, where a QME does not timely establish availability to set an appointment pursuant to AD Rule 31.3, a WCJ or the Appeals Board has discretion to order a replacement QME for good cause. The WCJ or the Appeals Board may consider the following:
a. The length of delay caused by the QME’s unavailability.
b. The amount of prejudice caused by the delay in availability versus the amount of prejudice caused by restarting the QME process.
c. What efforts, if any, have been made to remedy the QME’s availability.
d. Case specific factual reasons that justify replacing or keeping the current QME, including whether a party may have waived its objection.
e. The Appeals Board’s constitutional mandate to “accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character.” (Cal. Const., art. XIV, § 4.)

As explained in the decision, “when sections 4062.5 and 139.2(j)(1) are read together, a party’s statutory right to seek replacement of a QME in represented cases arises when the QME fails to timely issue a report following a medical evaluation. In represented cases, the determination of whether a QME should be replaced due to unavailability to set an evaluation is within the discretionary power of the Appeals Board, and a QME may be replaced where a party demonstrates good cause for the replacement.”

Application of this decision is prospective only.

SoCal Police Officer and Attorney Face $600K Comp Fraud Charges

A former Westminster police officer has been charged with 15 felonies for allegedly stealing more than $600,000 in fraudulent workers’ compensation payments after she was caught dancing and drinking at the Stagecoach country music festival, skiing, running 5k races, and going to Disneyland all while claiming to be completely disabled due to a head injury she said she suffered while handcuffing a suspect.

The former officer’s stepfather, a licensed attorney who practices workers’ compensation defense on behalf of insurance companies, has also been charged with two felonies for allegedly conspiring with his stepdaughter to orchestrate the fraudulent workers’ compensation scheme.

Nicole Brown, 39, of Riverside, has been charged with nine felony counts of making a fraudulent statement to obtain compensation, six felony counts of making a fraudulent insurance benefit claim, and one felony enhancement of committing an aggravated while collar crime over $100,000. She faces a maximum sentence of 22 years in state prison if convicted on all counts.

Brown’s stepfather, Peter Gregory Schuman, 57, of Buena Park, has been charged with one felony count of making a fraudulent insurance benefit claim and one felony count of assisting, abetting, conspiring with and soliciting a person in unlawful act. He faces a maximum sentence of eight years in state prison if convicted on all counts. As an attorney licensed by the State of California, he may also suffer discipline by the State Bar of California.

On March 21, 2022, Brown was employed as a police officer with the Westminster Police Department when she suffered a minor abrasion to her forehead while attempting to arrest and handcuff an uncooperative suspect. She complained to her watch commander that she had a headache and was feeling dizzy, but an emergency room doctor who examined her that same day released her back to work without restrictions.

After calling out sick for several days, on March 30, 2022, Brown was diagnosed with severe concussion syndrome and was taken off work by the doctor and placed on Total Temporary Disability (TTD).

When police officers are injured on the job and unable to work, they may be entitled to Total Temporary Disability benefits under the workers’ compensation system. When an officer is temporarily disabled due to a work-related injury, the officer will receive their full salary, not just a percentage, for up to one year. The full salary of the officer for the first year is paid by the city, county, or state agency that employs the officer.  If the officer is still temporarily disabled after the one-year period, they then transition to regular workers’ compensation TTD benefits and are paid at two-thirds of their average weekly wage, subject to a statewide maximum. These benefits can last up to 104 weeks within a five-year period.

While out on Total Temporary Disability, Brown cost the city of Westminster more than $600,000, which included Brown’s full salary – tax-free – and her medical expenses.

During her time on TTD Brown’s ongoing complaints were headaches, dizziness, sensitivity to light and noise, problems processing thoughts and words, and an inability to work on the computer or do any screentime.

Despite her representations to doctors and the City of Westminster regarding her inability to work as a police officer due to her injury, on April 29, 2023, Brown was seen by several people who knew she was off work on total disability as she was dancing and drinking at the Stagecoach Music Festival, with more than 75,000 people in attendance with loud music and bright lights everywhere and temperatures in excess of 100 degrees.

Her behavior was reported to the Westminster Police Department, which brought the case to the Orange County District Attorney’s Office, which launched an investigation into potential workers’ compensation fraud.

Three days after the festival, Brown attended an interactive process zoom meeting to discuss what duties she could perform as a police officer.  Brown’s stepfather, Peter Schuman, attended the meeting and advocated for Brown.

During the meeting Brown claimed she was unable to look at the screen.  Brown was sitting in a dark room.  Schuman did all of the talking for Brown with respect to what she could or could not do , and stated she was unable to do paperwork, and was uncertain that she could do phone calls due to her inability to process words or thoughts. Schuman spoke for Brown during this meeting. After the meeting with Schuman, Brown was admitted to an in-patient center for individuals who have a traumatic brain injury.

The investigation found that three days after the injury, when she called out sick, Brown allegedly went to an AYSO soccer conference, in San Diego, where she attended multiple sessions where PowerPoint presentations were utilized. While out on disability, Brown also ran in two 5K races, went snowboarding and/or skiing in Big Bear and Mammoth, went to three AYSO soccer conferences, attended baseball games, played golf, went to Disneyland, and took online courses with a local university.

If convicted of a felony, Brown will forfeit any pension credits she accrued back to the date the felony was committed. Deputy District Attorney Katie Lubinski of the Insurance Fraud Unit is prosecuting this case.

Admitting Evidence Not Listed at MSC Is Not “Harmless Error”

Alonzo McClanahan claimed workers’ compensation benefits for an alleged industrial injury to his right shoulder that occurred on July 25, 2017, while working at Employer DPR Construction (DPR). At the time its workers’ compensation carrier was National Union Fire Insurance Company. DPR’s claims administrator denied the claim a few months later.

The following year, McClanahan sought board adjudication of his claim. (§ 5500; Cal. Code Regs., tit. 8, § 10455.) Dr. Hanley was originally designated as the qualified medical evaluator and prepared two reports in that capacity in 2018 (the Hanley reports). He was later replaced as the qualified medical evaluator by Dr. Foglar and then by Dr. McGahan.

After engaging in discovery, the parties participated in a mandatory settlement conference (§ 5502, subd. (d)), which was unsuccessful, so the matter was set for trial. The pretrial conference statement stipulated to Dr. McGahan as the qualified medical evaluator (§ 4062.2) and provided a list of exhibits, including reports by Dr. McGahan, but the Hanley reports were not included.

At trial, McClanahan testified that his right shoulder was injured on the morning of July 25, 2017, while working for DPR (the 2017 injury). Specifically, he was “moving like 200 2-by-4s, 20-foot long, from one place to another” for four or five hours when the area between his shoulder and neck started to get stiff. He told his foreman that he couldn’t lift anymore with his shoulder hurting, and when he got off a few hours later, he told his superintendent that his “shoulder up in [his] neck” was sore. The superintendent asked him if he wanted to make a report, but McClanahan declined because he didn’t think it was that bad.

But when McClanahan woke up the next day, his arm and shoulder were stiff. He went to a doctor that night who advised taking a few days off work because his shoulder may be overworked. McClanahan reported this to DPR, but he did not see a workers’ compensation doctor until August 10, 2017. In his view, DPR caused the delay.

Three DPR employees disagreed with McClanahan’s account. Both the foreman and the superintendent stated that McClanahan did not report an injury to them on July 25, 2017. And the DPR safety manager who prepared the incident report testified that to his knowledge, McClanahan did not report an injury to anyone on July 25, 2017. DPR’s evidence included the employee sign out sheet for July 25, 2017, that indicated McClanahan signed out at 3:00 p.m. and checked the box indicating he was not injured.1 The safety manager also testified he made several attempts to take McClanahan to the workers’ compensation clinic between July 27, 2017, and August 7, 2017, in accordance with DPR policy, but McClanahan never showed up.

In a deposition, McClanahan testified DPR was the first place he ever had right shoulder pain, but at trial he admitted he suffered an industrial injury below his right elbow in 2013, a few years before working for DPR (the 2013 injury), and felt pain in his right shoulder as a result. He also testified he never went to a doctor for right shoulder pain before July 2017, but medical records showed that he sought or obtained care for shoulder pain or strain several times between 2013 and 2015, had an MRI of his right shoulder in 2014, and was diagnosed with a right shoulder condition in 2015. The records also indicated that he sought treatment for impingement in the right shoulder after a tree branch fell on it in 2015, but McClanahan could not remember a tree ever falling on his shoulder.

According to Dr. McGahan’s evaluation, McClanahan sustained “an industrial injury to his right shoulder arising out of and caused by the industrial exposure of July 25, 2017.” Dr. McGahan found it clear that McClanahan had preexisting right shoulder pathology but concluded it was “medically probable that [McClanahan’s] work duties on July 25, 2017, contributed to a worsening of his right shoulder pain.” In a supplemental report, Dr. McGahan stated that if “McClanahan is not a credible witness, then this certainly would call into question the credibility of his claim. Under this circumstance, the incident of July 25, 2017, may simply represent an exacerbation of his prior industrial injury rather than aggravation.

Over DPR’s objection, the workers’ compensation judge (WCJ) admitted the Hanley reports because DPR had received them before the mandatory settlement conference. In the first report, Dr. Hanley noted that some of McClanahan’s providers were suspicious about the validity of his complaints. In a supplemental report, Dr. Hanley concluded the “red flags” in McClanahan’s history were no longer of concern.

Based on McClanahan’s “credible testimony, the treatment records, and the findings by QME Dr. McGahan,” the WCJ concluded that McClanahan sustained an injury to his right shoulder arising out of and in the course of employment on July 25, 2017.

After reconsideration, the WCAB affirmed the WCJ’s determination on August 22, 2024 in a two-to-one decision. The affirming board members found that McClanahan erred by omitting the Hanley reports from the pretrial conference statement but concluded the error was harmless for two reasons: (1) the WCJ did not rely on the Hanley reports to find the industrial injury; and (2) the WCJ retains the discretion to determine if evidence should be admitted into the record as a matter of due process.

The Court of Appeal agreed to hear the case, and after it’s review annulled the board’s decision and remanded for further proceedings in the unpublished case of DPR Construction v. Workers’ Compensation Appeals Board CA3 – C100254- (May 2025).

On appeal, Petitioners contend the board exceeded its powers in two ways: (1) by failing to state the reasons for finding McClanahan credible and (2) by admitting two medical reports that were not listed in the pretrial conference statement. The Court of Appeal disagreed with petitioners as to the first contention but agreed as to the second.

In workers’ compensation proceedings, discovery closes on the date of the mandatory settlement conference. ( at p. 1164; § 5502, subd. (d)(3).) If the claim is not resolved at the conference, the parties must file a pretrial conference statement noting the specific issues in dispute, listing the exhibits, and disclosing witnesses. (§ 5502, subd. (d)(3); Cal. Code Regs., tit. 8, § 10759, subd. (b).) Evidence not disclosed or obtained thereafter is not admissible unless the proponent can demonstrate it was not available or could not have been discovered by the exercise of due diligence before the settlement conference. (§ 5502, subd. (d)(3).)

The purpose of this requirement is two-fold: (1) to “eliminate the element of surprise in workers’ compensation proceedings” and (2) “ ‘ “ ‘to guarantee a productive dialogue leading, if not to expeditious resolution of the whole dispute, to thorough and accurate framing of the stipulations and issues for hearing.’ ” ’ ” (Telles Transport, Inc. v. Workers’ Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, at pp. 1164, 1167.) The board abuses its discretion when it relieves a party from the sanctions of section 5502 without that party showing good cause. (San Bernardino Community Hospital v. Workers’ Comp. Appeals Bd. (1999) 74 Cal.App.4th 928, 938.

Section 5502 establishes the “bounds of discretion in the [WCJ] for keeping discovery open after the mandatory settlement conference.” (County of Sacramento v. Workers’ Comp. Appeals Bd. (1999) 68 Cal.App.4th 1429, 1433.) “[D]isregard for the statutory procedural mechanisms for resolving workers’ compensation cases is inappropriate.” (Ibid.) Such disregard is not subject to harmless error analysis. (San Bernardino, supra, 74 Cal.App.4th at p. 938.)

Tulare Doctor Pleads Guilty to Distributing Misbranded COVID Drugs

Stephen D. Meis, M.D., 73, formerly of Visalia, pleaded guilty to one count of introduction of misbranded drugs into interstate commerce.

According to court documents, Meis was the Medical Director of Golden Sunrise Pharmaceutical Inc. and Golden Sunrise Nutraceutical Inc. that manufactured, marketed, and sold products claiming to effectively treat a variety of medical conditions.

Beginning on March 30, 2020, Meis and Golden Sunrise’s Chief Executive Officer Huu Tieu, 62, of Porterville, began selling a set of herbal mixtures they called the “Emergency D-Virus Plan of Care” as a COVID-19 treatment. The treatment consisted of a box containing various vials of Golden Sunrise drug products, including one called “Imunstem,” together with an “Emergency D-Virus Plan of Care” information sheet. Meis and Tieu mailed the products to various practitioners, public officials, and other individuals both inside and outside of California.

The labeling for the drugs, including the information sheet that accompanied the drugs, was false and misleading and stated that ImunStem and other Golden Sunrise products were “uniquely qualified to treat and modify the course of the virus epidemic in China and other countries.”

Golden Sunrise falsely claimed the products had been the first dietary supplement in the United States to be approved as a prescription medicine by the U.S. Food and Drug Administration (FDA) to treat the COVID-19 virus. In fact, the drugs were not FDA approved, and no Golden Sunrise product had ever been approved by the FDA for any purpose.

On June 12, 2024, Tieu was sentenced to 18 months in prison for introduction of misbranded drugs into interstate commerce.

Meis is scheduled to be sentenced by U.S. District Judge Jennifer L. Thurston on July 14, 2025. Meis faces a maximum statutory penalty of 12 months in prison and a $100,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the FDA Office of Criminal Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation with assistance from the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Jeffrey A. Spivak and Emilia P.E. Morris are prosecuting the case.

May 12, 2025 – News Podcast


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PAGA Action Prevailing Employer May Not Recover Costs From LWDA

In March 2017, Kelly Rose, a former employee of Hobby Lobby Stores, Inc., notified the California Labor and Workforce Development Agency (LWDA) and Hobby Lobby that she intended to seek civil penalties under PAGA on behalf of herself, the State of California, and other hourly-paid individuals who were employed by Hobby Lobby in California as cashiers or who were assigned cashier duties. Rose’s claims were based on allegations that Hobby Lobby violated the so-called “suitable seating” provisions of Industrial Welfare Commission Wage Order No. 7-2001 by not providing seats for cashiers. (Cal. Code Regs., tit. 8, § 11070, subds. 1, 14.)

After the statutory deadline for the LWDA to respond to the notice had passed, Rose filed a civil action against Hobby Lobby alleging two causes of action based on the facts and theories alleged in her PAGA notice. The litigation proceeded for several years, and eventually a bench trial was held that resulted in a judgment for Hobby Lobby on both causes of action.

In a separate appeal, the Court of Appeal affirmed the judgment. (Rose v. Hobby Lobby Stores, Inc. (March 25, 2025, A168301) [nonpub. opn.].) After judgment was entered, Hobby Lobby filed a memorandum of costs totaling $474,707.80.

The trial court issued an order inviting the LWDA, which had not participated in the litigation, to file an amicus brief addressing its liability for an award of costs to a prevailing defendant in a PAGA action. At the trial court’s direction, Hobby Lobby served the order on the LWDA, at which point the LWDA first learned of Hobby Lobby’s attempt to recover its costs. The LWDA then filed a motion to intervene, which the trial court granted.

The trial court concluded that the LWDA is responsible for costs incurred by defendants who prevail on PAGA claims, but struck certain cost items that Rose had challenged, resulting in an award of costs against the LWDA in the amount of $124,585.24. The LWDA timely appealed from the costs order. The trial court did not award Hobby Lobby any costs against Rose, and Rose is not a party to this appeal.

The LWDA appealed, raising an issue of first impression: Is the LWDA liable for the litigation costs incurred by a prevailing defendant in an action filed under PAGA?

The Court of Appeal concluded that costs are not recoverable against the LWDA where it did not participate in the litigation. Accordingly, it reversed the trial court costs order in the published case of Rose v. Hobby Lobby Stores CA1/2 – A169640 (May 2025).

In seeking costs from the LWDA, Hobby Lobby relied on Code of Civil Procedure §1032(b), the general cost-recovery statute, which provides that a prevailing party is entitled to recover its costs “[e]xcept as otherwise expressly provided by statute,” and Code of Civil Procedure section 1028, which provides that when the State is a party to an action costs are “awarded against it on the same basis as against any other party.”

PAGA provides that “[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs” (Lab. Code, § 2699, subd. (k)(1)), but says nothing about prevailing employers. Hobby Lobby argues that in view of the guidance provided by our Supreme Court in Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 989 for interpreting so-called “one-way” fee and cost shifting statutes like the one in PAGA, the Court of Appeal should conclude that PAGA does not contain an express exception to section 1032(b) and therefore as a prevailing defendant Hobby Lobby is entitled to recover its costs.

In Murillo, the Supreme Court construed a fee and cost shifting provision in the Song-Beverly Act (Civ. Code, § 1790 et seq), California’s automobile “lemon law,” which expressly permits a prevailing plaintiff-buyer to recover costs and attorney fees but is silent with respect to a prevailing defendant-seller. Murillo held that silence does not create an express exception to section 1032(b); therefore, a prevailing defendant-seller in a case brought under the Song-Beverly Act is entitled to recover its costs under section 1032(b). (Id. at p. 991.)

The LWDA argues that legislative history shows that Labor Code section 2699, subdivision (k)(1) was intended to displace the general cost recovery rule of section 1032(b), and that Murillo, which concerns a consumer protection statute rather than a provision of the Labor Code, is inapposite.

Hobby Lobby argued unpersuasively that the LWDA was nevertheless a party to Rose’s action from its commencement because Rose filed her PAGA suit as the LWDA’s agent, and that under Civil Code section 2330 the LWDA, as principal, is responsible for the acts and liabilities of its agent.

The LWDA did not sue Hobby Lobby. The LWDA was not a party to Rose’s lawsuit, nor did it take any action in the lawsuit until it moved to intervene, which it did only after it got word that Hobby Lobby sought to impose its costs on the LWDA. Accordingly, Hobby Lobby cannot recover its costs from the LWDA.”

“Because we conclude that the LWDA was not a party to Rose’s PAGA action, Code of Civil Procedure section 1028, which provides that when the State is a party costs are to be awarded against it on the same basis as against any other party, has no application here.”

“Hobby Lobby also argues that even if the LWDA was not a party to Rose’s PAGA action, it is liable for costs as the real party in interest. This argument is unpersuasive because Hobby Lobby cites no case in which litigation costs were imposed against a real party in interest that did not participate in the litigation.”

Ninth Circuit Upholds AB 5 Against Independent Truckers’ Challenge

The California Trucking Association (CTA) filed a lawsuit in November 2019 in the U.S. District Court for the Southern District of California challenged the application of California’s Assembly Bill 5 (AB 5) to the trucking industry, specifically arguing that it violates the Dormant Commerce Clause of the U.S. Constitution, among other claims.

AB 5, enacted in 2019 and effective January 1, 2020, codified the “ABC test” to determine whether workers are classified as employees or independent contractors. The “B” prong of the test, which requires that a worker perform work outside the usual course of the hiring entity’s business to be considered an independent contractor, effectively prohibits the traditional leased owner-operator model in trucking, as owner-operators’ work (hauling freight) is central to a motor carrier’s business.

Plaintiffs argued that AB 5 was preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA), which prohibits states from enacting laws affecting a motor carrier’s prices, routes, or services. The Dormant Commerce Clause and Equal Protection Clause were also cited as grounds for challenge.

On December 31, 2019, District Judge Roger Benitez granted a preliminary injunction, halting AB 5’s enforcement against the trucking industry, finding that the law likely violated FAAAA preemption by restricting motor carriers’ ability to use independent contractors, a core component of interstate trucking. The Ninth Circuit Court of Appeals reversed this injunction in its April 2021 published opinion, ruling that AB 5 was a generally applicable labor law that did not sufficiently impact prices, routes, or services to be preempted by the FAAAA. The injunction remained in place pending further appeals. The U.S. Supreme Court declined to review the case in June 2022, returning it to the Southern District of California and dissolving the injunction.

The Owner-Operator Independent Drivers Association (“OOIDA”) is the international trade association representing the interests of independent owner-operators and professional drivers on all issues that affect truckers. More than 150,000 members of OOIDA are men and women in all 50 states and Canada who collectively own and/or operate more than 240,000 individual heavy-duty trucks and small truck fleets. Its national headquarters is located on the outskirts of Kansas City, in Grain Valley, MO.

OOIDA joined the litigation in 2022 as an intervenor, focusing on the interests of small-business truckers, particularly those operating interstate. After the Supreme Court’s denial, CTA and OOIDA filed renewed motions for a preliminary injunction, combining arguments on FAAAA preemption, the Dormant Commerce Clause, and Equal Protection. They contended that AB 5’s ABC test, by effectively banning leased owner-operators, imposed an undue burden on interstate commerce, violating the Dormant Commerce Clause. This clause, inferred from Article I, Section 8 of the U.S. Constitution, prohibits states from enacting laws that discriminate against or excessively burden interstate commerce.

On March 15, 2024, Judge Benitez rejected the renewed motions for a preliminary injunction, ruling against CTA and OOIDA on all claims. He concluded that AB 5 did not violate the Dormant Commerce Clause, as it lacked discriminatory intent or effect favoring California truckers over out-of-state truckers. Without such discrimination, the court declined to engage in Pike balancing, noting that only a “small number of cases” have found nondiscriminatory burdens substantial enough to violate the clause.

In August 2024, the CTA announced it would not pursue further appeals, ending its four-and-a-half-year legal battle. OOIDA continued the fight, filing an appeal with the Ninth Circuit in August 2024. Their brief focused on the Dormant Commerce Clause, arguing that AB 5’s ABC test “effectively prohibits an entire sector of small business truckers” from operating as independent contractors in California, creating a significant burden on interstate commerce. They also reiterated the Equal Protection claim, citing the B2B exemption’s incompatibility with federal regulations.

California’s Attorney General responded in November 2024, asserting that AB 5 does not prohibit owner-operators outright and that its regulatory costs do not trigger Pike balancing. The state argued that the law’s intent was to protect workers, not to discriminate against interstate commerce.

On May 16, 2025 the Court of Appeals for the 9th Circuit issued an unpublished Memorandum Opinion in the case of Owner-Operator Independent Drivers Association, Inc. v. Bonta – Case # 3:18-cv-02458-BEN-DEB. It concluded – among other findings – that “AB 5 does not violate the dormant Commerce Clause. “The dormant Commerce Clause is not a roving license for federal courts to decide what activities are appropriate for state and local government to undertake, and what activities must be the province of private market competition.” United Haulers Ass’n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 343 (2007). ”

May 5, 2025 – News Podcast


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Fresno Health System to Pay $31.5 M to Resolve Kickback Case

Community Health System and its affiliate Physician Network Advantage Inc. have agreed to pay $31.5 million to the United States to resolve allegations that they violated the False Claims Act based on financial benefits provided to referring physicians.  Community Health System operates in Fresno County and includes hospitals Community Regional Medical Center and Clovis Community Medical Center.

The civil settlement resolves allegations that Community Health System and Physician Network Advantage Inc. (PNA) provided several types of extravagant benefits to induce physicians in the Fresno area to refer their patients to Community facilities for medical services, in violation of the False Claims Act. PNA is a health care technology business formed and funded by Community to support Fresno-area physicians’ adoption of the electronic health records platform used by Community. The United States contends that PNA also played a key role in securing business for Community by unlawful means. In a custom-built lounge located on premises at PNA’s offices, known as HQ2, PNA provided expensive wine, liquor, cigars, and meals to referring physicians, with the knowledge and funding of Community.

The settlement also resolves allegations that Community and PNA provided financial subsidies for electronic health records technology and equipment used by certain physicians in their private offices in return for the referral of governmental health care program patients to Community. Further, the settlement resolves allegations that Community paid bonuses to certain physicians ostensibly for participation in clinical integration activities, when the real purpose of the bonuses was to reward referrals.

The United States contends that these financial benefits violated the federal Anti-Kickback Statute, resulting in false claims for the medical services referred by physicians receiving the benefits, that were submitted to governmental health care programs. The United States also contends that the conduct described above created financial relationships with referring physicians under the Physician Self-Referral Law (known as the “Stark Law”). The Stark Law seeks to safeguard the integrity of the Medicare program by prohibiting a hospital from billing for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions, which the United States contends were not met.

In connection with the settlement, Community entered into a five-year Corporate Integrity Agreement with HHS-OIG that requires, among other conditions, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks. The Corporate Integrity Agreement also requires an independent review organization to annually assess the policies and systems to track arrangements with some referral sources.

The settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by relator Michael Terpening. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery from that action. The qui tam case is captioned United States ex rel. Terpening v. Fresno Community Hospital and Medical Center, et al., 1:19-CV-01699 (E.D. Cal.). As part of the settlement announced today, Mr. Terpening will receive approximately $5 million.

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of California and HHS-OIG with assistance from the Federal Bureau of Investigation and the U.S. Postal Service Office of Inspector General. Assistant U.S. Attorney David Thiess handled the case for the U.S. Attorney’s Office.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Ventura County Unlicensed Physician Re-Arrested for Practicing

The Ventura County District Attorney Erik Nasarenko announced that Nitun “Nate” Dayalghai Ahir (DOB 06/17/81), of Thousand Oaks, was arraigned for practicing medicine without a license, in violation of Business and Professions Code section 2052.

Ahir was out on bail in case number 2024030574, in which he is alleged to have practiced medicine without a license and represented himself as a doctor at Regen Spine & Nerve, in Ventura, when the District Attorney’s Office received complaints that Ahir was continuing to practice medicine without a license.

In his new case, Ahir is alleged to have unlawfully provided medical services to victims only days after being arraigned in case 2024030574. He is further charged with using the term “Doctor” and the prefix “Dr.” to imply he is a licensed medical professional when he is not. Judge David Hirsch explicitly made a condition of Ahir’s bail that he may not practice medicine, solicit medical business, attempt to treat patients, or receive compensation for any form of medical work, or he faces remand into custody.

According to the California Department of Consumer Affairs, Ahir is not licensed in any capacity – as a doctor, surgeon, nurse, nurse practitioner, chiropractor, or otherwise – in the State of California, nor is he a licensed physician in any other state.

The District Attorney requests that any member of the public who Ahir has attempted to treat contact Investigator Eric Jensen at Eric.Jensen@ventura.org or by calling 805-662-1739. The public is urged to review the licensure status of any medical professionals they are considering seeing by visiting the Department of Consumer Affairs’ professional

This case was investigated by the Department of Consumer Affairs, Health Quality Investigations Unit. Both of Ahir’s cases are set for early disposition conference on June 25, 2025, at 1:30 p.m. in Courtroom 12 of the Ventura County Superior Court. He remains out of custody on $50,000 bail.