Author: WorkCompAcademy

Plaintiffs Joseph Davis and Shavonda Early brought a class action lawsuit against defendant CSAA Insurance Exchange (CSAA), an automobile insurance company, claiming that automobile insurance rates became excessive during the COVID-19 pandemic when there was less driving and fewer traffic accidents. Plaintiffs alleged that, in 2020 and 2021, CSAA was the fifth largest automobile insurance company in the state and insured over one million California drivers.

The complaint alleged two causes of action under California’s Unfair Competition Law (Bus. & Prof. Code § 17200 et seq.) (UCL) and a cause of action for unjust enrichment. The complaint alleged that, by not unilaterally refunding premiums, CSAA violated Insurance Code § 1861.05, subdivision (a) (section 1861.05(a)).2 This section, titled “Approval of Insurance Rates,” provides that “[n]o rate shall be approved or remain in effect which is excessive, inadequate, unfairly discriminatory or otherwise in violation of this chapter.”

CSAA filed a demurrer, which the trial court sustained with leave to amend. The court interpreted section 1861.05(a)’s language that no excessive rate shall “remain in effect” as applying to the insurance commissioner’s system of approving rates, and meant to “ensure that a previously approved rate does not ‘remain in effect’ if the circumstances have changed.” The court found that the statute allowed for prospective rate reductions when rates become excessive, but not retroactive modifications of previously approved rates.

In their first amended and consolidated complaint, plaintiffs reasserted the UCL claims, and reiterated that CSAA received an “unprecedented windfall” from the COVID-19 pandemic by continuing to charge preapproved rates as driving and traffic accidents decreased dramatically. At the same time, plaintiffs acknowledged that some refunds were given. They recognized that, in April 2020, the insurance commissioner issued a bulletin directing insurers to “make an initial premium” refund for the prior two months. Although CSAA gave a 20 percent refund to policyholders, plaintiffs alleged that this amount was inadequate and the approved rates for this period remained excessive. Plaintiffs also recognized that the commissioner sent additional bulletins extending the directive for refunds. Although CSAA subsequently gave a 10 percent refund for May and June 2020, plaintiffs alleged that the rates were still excessive. According to plaintiffs, in 2021 the commissioner described the premium returns by California insurance companies as “insufficient.”

Plaintiffs asserted that CSAA’s failure to provide sufficient refunds violated section 1861.05(a) and was unfair and unlawful. They sought restitution for the “unearned premiums acquired from [named plaintiffs] and the Class along with CSAA’s investment returns on those unearned premiums.” CSAA again demurred, and this time the trial court sustained the demurrer without leave to amend.

The Court of Appeal affirmed in the published case of Davis v. CSAA Ins. Exchange – A169729 (September 2025).

The central question in this appeal is whether Insurance Code § 1861.05(a) imposes an independent obligation on insurers to refund premiums that were collected under approved rates when those rates later become purportedly excessive.

Section 1861.05(a) was enacted through the passage of Proposition 103 in 1988. Its stated purpose was “to protect consumers from arbitrary insurance rates and practices, to encourage a competitive insurance marketplace, to provide for an accountable Insurance Commissioner, and to ensure that insurance is fair, available, and affordable for all Californians.” Proposition 103 was one of five competing insurance initiatives on the ballot, but the only one that passed.

Proposition 103 required automobile insurance rates to be determined by applying three factors – the insured’s driving safety record, the annual number of miles driven, and the years of driving experience – and it allowed the insurance commissioner to adopt additional factors. It prohibited rates that were “unfairly discriminatory” and specified that the business of insurance was subject to California’s unfair business practice laws. Proposition 103 also designated the insurance commissioner to be an elected official, no longer appointed by the governor.

In arguing that the section imposes an independent obligation on insurers to issue refunds when approved rates become excessive, plaintiffs focus on the language in the first sentence that no “excessive” rate shall “remain in effect.”

Plaintiffs contend that the term “approved” and the phrase “remain in effect” in section 1861.05(a) are two distinct directives, and the latter phrase would be surplusage if the statute were interpreted to impose no obligation on insurers to unilaterally refund previously approved rates when circumstances render them excessive.

After reviewing the parties arguments, and citations supporting these arguments, the Court of Appeal wrote that “we conclude that section 1861.05(a) does not impose an independent obligation on insurers to retroactively refund premiums, based on rates that were approved by the insurance commissioner, when those rates later become purportedly excessive.”

The judgment of the trial court was affirmed.

A man pleaded guilty in a federal court in Los Angeles to leading a long-running scheme in which dozens of medical doctors’ personal information was stolen and then used to create fraudulent e-prescribing accounts, which his accomplices then used to issue thousands of fraudulent prescriptions of controlled substances.

Benjamin Jamal Washington, 25, of Hyattsville, Maryland, pleaded guilty to one count of conspiracy to commit wire fraud, one count of aggravated identity theft, and one count of conspiracy to distribute controlled substances. Washington remains in federal custody.

According to his plea agreement, from September 2020 to May 2023, Washington and his co-conspirators obtained personal identifying information (PII) belonging to dozens of doctors, including their names, dates of birth, addresses, phone numbers, National Provider Identification number, and Drug Enforcement Administration (DEA) Registration Numbers.

After obtaining this information, the co-conspirators impersonated the victims by obtaining fake drivers’ licenses in their names. They also paid corrupt telephone company employees to perform illegal subscriber identity module (SIM) swaps – fraudulently inducing a phone carrier to reassign a cell phone number from the legitimate subscriber to a phone controlled by the co-conspirators – to gain access to the physicians’ phone numbers.

Washington and his co-conspirators then used the fraudulent drivers’ licenses and the stolen phone numbers to open fraudulent e-prescribing accounts in the physicians’ names. At least one co-conspirator spoke with a pharmacy technician to understand the patterns and practices of physicians submitting e-prescriptions so Washington and his co-conspirators could avoid detection and issue more fraudulent prescriptions.

Once the co-conspirators opened the fraudulent e-prescribing accounts, Washington and others used the accounts to submit at least 5,600 fraudulent prescriptions of controlled substances, including illegal prescriptions of oxycodone and promethazine with codeine.

The co-conspirators then traveled to pharmacies across the United States, including pharmacies within the Los Angeles and Orange county area, to pick up the illegally prescribed controlled substances, which they sold for a significant profit.

Washington has a criminal history in Maryland, including arrests for robbery-related probation violations in 2022 and 2024, as well as an escape from pre-trial release in St. Mary’s County in September 2022 after tampering with his GPS monitor.

United States District Judge Wesley L. Hsu scheduled a January 13, 2026, sentencing hearing, at which time Washington will face a statutory maximum sentence of 42 years in federal prison, including a mandatory two-year consecutive prison sentence for the aggravated identity theft count.

AstraZeneca is suing Hawaii over a state statute that requires pharmaceutical companies to offer discounted “340B” drugs to contract pharmacies. The company claims the statute is preempted by federal law and that federal appeals courts have made it clear that federal statute regulating such drugs does not require manufacturers to provide discounted drugs to “unlimited” contract pharmacies.

Hawaii is in the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit’s jurisdiction covers the western United States, including the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington, as well as the U.S. territories of Guam and the Northern Mariana Islands. Thus if this case is appealed, the outcome of the appeal will likely to some degree apply here in California, at least as to the preemption issue.

The 340B Drug Pricing Program, established under Section 340B of the Public Health Service Act (42 U.S.C. § 256b), requires pharmaceutical manufacturers participating in Medicaid to offer discounted outpatient drugs to qualifying “covered entities” such as safety-net hospitals, community health centers, and certain clinics serving low-income or underserved populations.

These entities can contract with external pharmacies (known as “contract pharmacies”) to dispense the discounted drugs to their patients, but the federal statute itself does not explicitly mandate that manufacturers provide these discounts through an unlimited number of such pharmacies.

Over the past few years, disputes have arisen as some manufacturers, including AstraZeneca, have imposed restrictions on contract pharmacy arrangements, citing concerns over program integrity, duplicate discounts, and diversion of drugs to ineligible patients. Federal appeals courts have largely sided with manufacturers on this point, ruling that the 340B statute does not prohibit such restrictions.

In response, several states have enacted laws to protect access to 340B discounts via contract pharmacies, effectively requiring manufacturers to honor unlimited arrangements. Hawaii joined this trend on May 30, 2025, when Governor Josh Green signed Act 143 (also known as Senate Bill 3202) into law, with an effective date of July 1, 2025.

The AstraZeneca complaint cites the Third Circuit’s decision in Sanofi Aventis U.S. LLC v. HHS (58 F.4th 696, 706 (3d Cir. 2023)), which held that restrictions on contract pharmacy discounts “do[es] not violate Section 340B” and enjoined HHS from enforcing a contrary interpretation. Similarly, the D.C. Circuit in Novartis Pharms. Corp. v. Johnson (102 F.4th 452, 459 (D.C. Cir. 2024)) rejected the idea that Section 340B prohibits manufacturers from imposing “any conditions” on discounts involving contract pharmacies. AstraZeneca notes that Hawaii submitted amicus briefs in both cases supporting unlimited access, but the courts ruled against that position.

Should this case be favorable to drug makers, and be successfully affirmed by the 9th Circuit Court of Appeals, it will become binding on California unless the U.S. Supreme Court hears the case.  It is therefore a case of interest to those states who are included in 9th Circuit jurisdiction.

At two years after diagnosis of COVID-19, employees who experience long COVID symptoms have substantially reduced work productivity, reports a study in the August issue of the Journal of Occupational and Environmental Medicine.

Led by Hiten Naik, MD, SM, of The University of British Columbia and the Post-COVID-19 Interdisciplinary Clinical Care Network, Vancouver, the online survey study included 908 employed patients diagnosed with COVID-19 between March 2020 and May 2021. Of these, 165 patients were classified as having long COVID, defined as continued symptoms three months after an initial positive COVID-19 test. Work productivity loss and work performance impairment were assessed using validated questionnaires.

About 75% of participants with ongoing long COVID symptoms reported any productivity loss within the last three months, compared to 47% of those without long COVID. After adjustment for other characteristics, employees in the long COVID group were about three times more likely to report lost productivity.

Average paid productivity loss over three months was about 62 hours, including 33 hours of absenteeism and 29 hours of presenteeism (decreased productivity at work). Long COVID was also associated with high unpaid productivity loss, including activities such as caregiving and household chores: about 37 hours, on average.

About 73% of participants with long COVID reported impaired work performance within the past week, compared to 39% of those without long COVID symptoms. On adjusted analysis, employees with long COVID were four times more likely to have work performance impairment. Based on average hourly wage, the economic impact of total productivity loss was estimated at nearly $14,000 CAD over a year.

Long COVID has been described as a “global public health crisis,” affecting over 400 million people worldwide. Although studies have shown that long COVID can impair health and occupational functioning, the overall impact on work productivity loss has been unclear.

Long COVID is “associated with substantial productivity loss, even two years after the onset of SARS-CoV-2 infection and even in individuals who have returned to work,” Dr. Naik and coauthors conclude. “Clinicians, health systems, and employers should understand that long COVID can have long-lasting impacts on occupational functioning and requires long-term support.”