Author: WorkCompAcademy

The U.S. Supreme Court denied an appeal by Johnson & Johnson of a ruling requiring the company to pay $302 million in penalties to California for deceptive marketing of pelvic mesh implants that can cause serious vaginal pain and physical damage.

Since the late 1990s, Ethicon has manufactured, marketed, and sold pelvic mesh products intended to treat two conditions that can affect women stress urinary incontinence (SUI) and pelvic organ prolapse (POP).

In 2008, the U.S. Food and Drug Administration (FDA) issued a public health notification alerting health care providers about complications from pelvic mesh implants used to treat SUI and POP. And in 2011, the FDA issued an update to its public health notification.

In 2012, the FDA ordered Ethicon to conduct postmarket surveillance studies for one of its SUI devices (TVT-Secur) and three of its POP devices (Prolift, Prolift-M, and Prosima). Instead of conducting these postmarket surveillance studies. Ethicon stopped selling the products commercially.Ethicon’s competitors continued to sell pelvic mesh products for transvaginal repair of POP, even after Ethicon stopped selling most of its POP devices.

However, in April 2019, the FDA concluded there was not a reasonable assurance of safety and effectiveness for any commercially available pelvic mesh products intended for transvaginal repair of POP. Therefore, the FDA ordered all remaining manufacturers of surgical mesh intended for transvaginal repair of POP to stop selling and distributing such products.

During the relevant timeframe, Ethicon disseminated three categories of communications giving rise to the violations at issue here: (1) instructions for use (IFUs); (2) marketing communications directed to California doctors; and (3) marketing communications directed to California patients.

In 2016, the California Attorney General filed an enforcement action against Johnson & Johnson on behalf of the People of the State of California. The case stemmed from a multistate investigation into J&J subsidiary Ethicon Inc’s marketing of pelvic mesh devices.

The operative complaint alleged Ethicon disseminated deceptive advertisements relating to its pelvic mesh products and violated the unfair competition law (UCL) (Bus. & Prof. Code,[1] § 17200 et seq.) and 121,844 violations of the false advertising law (FAL) (§ 17500 et seq.). It requested injunctive relief, civil penalties of $2,500 for each UCL violation occurring on or after October 17, 2008, and civil penalties of $2,500 for each FAL violation occurring on or after October 17, 2009.

After a nine-week bench trial, the trial court issued an extremely thorough, 128-page statement of decision finding Ethicon liable for 153,351 UCL violations and 121,844 FAL violations.

Johnson & Johnson, Ethicon, Inc., and Ethicon US, LLC (collectively, Ethicon), appealed an adverse judgment following a bench trial. The trial court levied nearly $344 million in civil penalties against Ethicon for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of Ethicon’s surgically implantable transvaginal pelvic mesh products.

Ethicon’s primary contention on appeal was that the trial court applied the wrong legal standards under the UCL and FAL Ultimately the California Court of Appeal decided that substantial evidence supported the findings regarding Ethicon’s written marketing communications, but not its oral marketing communications in the published decision of The People v Johnson and Johnson e.al. 77 Cal.App.5th 295 (April 2022).

The judgment was modified, and the civil penalties awarded to the People are reduced from $343,993,750 to $302,037,500. The judgment was affirmed as modified. The parties are to bear their own appellate costs.

The U.S. Supreme Court denied Johnson & Johnson’s Petition For a Writ Of Certiorari of this $302 million judgment on February 21, 2023. J&J had argued to the Supreme Court that state consumer protection laws like California’s are too vague, exposing companies to unpredictable state lawsuits.

JNJ said the Supreme Court’s rejection of the case will lead to continued “uneven, unclear, and unfair enforcement that harms consumers and businesses.”

State lawmakers proposed 500 new bills on Friday, the 2023 session’s introduction deadline, bringing the total to about 2,600.

According to a report by CalMatters, that’s the most in more than a decade, according to veteran Capitol lobbyist Chris Micheli. More than 1,000 are “placeholder” bills without specific language.

Last year, when about 2,000 bills were introduced, the Legislature passed almost 1,200 of them – and nearly 1,000 became law with Gov. Gavin Newsom’s signature.

Workers’ rights are the focus of several bills including:

– – SB 497, by Sen. Lola Smallwood-Cuevas, from Los Angeles: Strengthens protections for workers from retaliation by employers;
– – SB 525, by Sen. María Elena Durazo, also from Los Angeles: Revives the effort to increase the minimum wage for some healthcare workers to $25 an hour;
– – AB 1672 by San Francisco Assemblymember Matt Haney: Creates a framework to address labor disputes between employee organizations who represent independent in-home caregivers and the state.

Fast food fight: With a landmark law to regulate wages and working conditions in the fast food industry on hold until voters decide its fate in November 2024, California lawmakers will try again to hold franchise chains, including McDonald’s and Burger King, responsible for alleged labor violations in their restaurants.

Assemblymember Chris Holden, a Pasadena Democrat, introduced Assembly Bill 1228 to establish joint labor law liability for fast food franchise owners. Last year, he agreed to strip it out of his fast food bill to sway detractors in the Legislature. CalMatters found that joint liability in other industries – such as extending legal responsibility from janitorial and gardening contractors to the companies that hire them – has been a key part of California’s efforts to combat wage theft and other labor violations.

But fast food franchise corporations have long avoided liability in federal and state labor law. Labor advocates say the current business model allows these companies to squeeze profits from franchise locations while distancing themselves from how employees are treated. Franchise and business groups say extending liability would upend the franchise owners’ independence as employers. The International Franchise Association released a statement saying the bill would cause business opportunities to dry up in California.

Each year the California Chamber of Commerce releases a list of job killer bills to identify legislation that will decimate economic and job growth in California. The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state.

The California Chamber of Commerce announced the first job killer Bill for 2023 on February 14.

SBX1 2 (Skinner; D-Oakland). Windfall Profits Tax. Sets an arbitrary cap on the amount of profits that a refiner operating in the state of California can earn over a quarterly basis. According to the Chamber of Commerce “This measure would further diminish supply, discourages operational efficiencies, and would limit the amount of capital a refiner could reinvest into their infrastructure to support California’s long-term climate goals.”

In 2022, the California Chamber of Commerce identified 19 job killer bills, voicing concern that the bills reflected a lack of appreciation of the economic realities and regulatory challenges employers – and especially small business employers – face as they continue to emerge from the impacts of the pandemic.

Just two bills identified as job killers passed the Legislature in 2022. Both were signed by the Governor.  

Kaiser Health News reports that about 350 physicians came to Capitol Hill this week to lobby Congress on behalf of the American Medical Association. Although they left their white coats at home, they were still there as doctors.

Their goal was to build support for the organization’s “Recovery Plan for America’s Physicians” – a wish list that includes a pay raise, relief from insurance company prior-authorization demands, and more federally funded residency slots to train more physicians.

In a speech to physician and medical student leaders from across the country last year, American Medical Association President Gerald E. Harmon, M.D., unveiled the AMA Recovery Plan for America’s Physicians. It seeks fundamental changes to create a health system that better supports patients and physicians today and over the long run.

It outlines a five-point strategy to strengthen the physician workforce, recover from the trauma of the pandemic, and improve health care delivery by eliminating some of the most common pain points that threaten to drive physicians from practice.

The AMA’s comprehensive approach includes:

– – Supporting telehealth to maintain gains in coverage and payment.
– – Reforming Medicare payment to promote thriving physician practices and innovation.
– – Stopping scope creep that threatens patient safety.
– – Fixing prior authorization to reduce the burden on practices and minimize dangerous care delays for patients.
– – Reducing physician burnout and addressing the stigma around mental health.

Dr. Harmon noted that “Physician shortages, already projected to be severe before COVID, have almost become a public health emergency. If we aren’t successful with this Recovery Plan, it’ll be even more challenging to bring talented young people into medicine and fill that expected shortage.”

Thus he also proposed that the barriers that are keeping people out, particularly students from underrepresented communities be addressed.

– – We need to reduce the amount of debt medical students must carry to complete their educations, now over 200,000 dollars, especially as we attract physicians to rural America.
– – We need to expand the number of residency training slots and remove caps to Medicare-funded positions that Congress put in place long ago.
– – And we need to win funding from Congress to support the creation of new medical schools and residency programs at Historically Black Colleges and Universities, Hispanic-Serving Institutions, and Tribal Colleges and Universities.

The AMA represents about 250,000 doctors, roughly a quarter of the U.S. physician workforce. And sending its members in droves to Washington to make their case is nothing new. But this was the first organized group effort in more than three years, because of the covid-19 pandemic.

While the AMA has a full staff of lobbyists in Washington, association officials say their best weapon is often doctors themselves, who wrestle with insurance company red tape and bureaucratic reimbursement rules every day. “There is nothing quite like telling members of Congress how things work in their district,” said Dr. Jack Resneck Jr., AMA president and a dermatologist at the University of California-San Francisco.

3 Stonedeggs, Inc. – (DBA California Sandwich Company) business was to provide food service to firefighters and forestry workers at various locations. The employer won a contract to provide food service at a remote location near Happy Camp, California, and it was expected that the job would last 3 to 6 months.

The employer asked employees assigned to its Brownsville camp to volunteer to work at Happy Camp, a remote location without cellular telephone services where it was to serve meals for the three-to-six month period.

Braden Nanez and two other employees from the Brownsville camp agreed to travel to work providing food service at Happy Camp, and the employer authorized Nanez to drive his own car from Brownsville to his residence and then to Happy Camp.

On October 5, 2020, the day of the vehicular accident at State Highway 263/Shasta River Bridge, Nanez worked the breakfast shift and, afterwards, at about 9:00 a.m., commenced a seventy-mile drive to Yreka in his own car. He texted manager Brossard later that he would return for his next shift at about 4:00 p.m., a timeframe permitting daytime travel in his off hours.

The employer was not informed of his reasons for traveling to Yreka, but manager Todd surmised that it was to use his cellular telephone.

On April 26, 2022, the matter proceeded to trial as to the following issues: “Injury arising out of and in the course of employment per Labor Code section 3600(a), (the going and coming rule); and intoxication.”

The WCJ found that applicant (1) did not sustain injury arising out of and in the course of employment (AOE/COE); (2) violated company policy when he left the worksite without permission on the date of his injury; and (3) was engaged in a material deviation and complete departure from his employment at the time of injury. The WCJ ordered that Nanez take nothing on his workers’ compensation claim.

On reconsideration, Nanez contended that the evidence established that he was engaged in an activity reasonably expected to be incident to his employment at the time of his injury, and, therefore, that the commercial traveler rule applies to his accident.

The WCAB agreed, and rescinded the F&O, and substituted findings that the commercial traveler rule applies to his accident, that his claim is not barred by the going and coming rule and intoxication, and that he sustained injury AOE/COE in the form of a fracture to the right femur, and deferred his claim of injury to other body parts in the panel decision of Nanez v 3 Stonedeggs, Inc – ADJ14015513 (February 2023)

A commercial traveler is regarded as acting within the course of his employment during the entire period of his travel upon his employer’s business.” (Wiseman v. Industrial Acc. Comm.(1956) 46 Cal.2d 570, 572 [21 Cal.Comp.Cases 192].) The California Supreme Court made clear that, “[i]n the case of a commercial traveler, workers’ compensation coverage applies to the travel itself and also to other aspects of the trip reasonably necessary for the sustenance, comfort, and safety of the employee.”

As the Court of Appeal observed, an employee away on business can “hardly [be] expected to remain holed up in his hotel room.” (Fleetwood Enterprises, Inc. v. Workers’ Comp. Appeals Bd. (Moody) (2005) 134 Cal.App.4th 1316, 1327 [70 Cal.Comp.Cases 1659].)

The test is whether the activity during the injury is one “that an employer may reasonably expect to be incident to its requirement that an employee spend time away from home.” (IBM Corp. v. Workers’ Comp. Appeals Bd. (Korpela) (1978) 77 Cal.App.3d 279, 283 [43 Cal.Comp.Cases 161].)

In Korpela, the issue presented was whether an employee’s death from an automobile accident while on a weekend trip to visit relatives during the course of an out-of-town training program was compensable under the commercial traveler rule. Evaluating whether the weekend trip was within the course of employment or a non-compensable “distinct departure on a personal errand,” the court found that the weekend trip was a leisure time activity normally incident to an out-of-town temporary assignment, a conclusion further supported by the fact that the employee’s supervisor knew of the visit and encouraged it. (Korpela, supra, at p. 283.)

Because 3 Stonedeggs, Inc (1) allowed applicant to travel by his own car from the Brownsville camp to his Chico home and then return to continue his work there; (2) sought and obtained applicant’s agreement to travel to Happy Camp on its business; (3) authorized applicant to travel to Happy Camp using his own car; and (4) did not instruct applicant to refrain from using his own car during his off hours or for personal reasons, applicant’s conduct in using his own car during his off hours to drive from Happy Camp to Yreka was conduct reasonably expected by defendant to be incidental to its requirement that he spend time away from home.

A San Fernando Valley pharmacist who used forged prescriptions to illegally sell narcotics, including opioids, to phony “patients” has been sentenced to 24 months in federal prison, the Justice Department announced today.

Gevork Danielian, 41, of Granada Hills, was sentenced on Monday by United States District Judge Mark C. Scarsi, who also ordered him to pay a $100,000 fine.

Danielian pleaded guilty in November 2022 to one count of conspiracy to distributed controlled substances.

From December 2014 to July 2020, Danielian owned and operated the Winnetka-based A&G Vitalife Inc., which did business as A&G Care Pharmacy at 7235 Corbin Ave, Winnetka California, where he worked as the pharmacist-in-charge.

From April 2018 to December 2018, Danielian conspired with others to unlawfully sell narcotics, including hydrocodone, oxycodone, methamphetamine salts, and alprazolam, an anxiety medication sold under the brand name Xanax.

A co-conspirator would obtain blank prescription papers, Danielian would then provide – usually by text message – the names and dates of birth of individuals to be falsely identified as patients, which the co-conspirator would then use to fill in the falsified prescriptions.

The co-conspirator would bring the falsified prescriptions to Danielian, bearing the forged signatures of real physicians. Danielian would “fill” the prescriptions in exchange for money despite knowing the narcotics were not going to be used for a legitimate medical purpose, but rather were going to be illicitly sold by his co-conspirator.

Danielian filled prescriptions for hundreds of pills of opioids and other narcotics during the conspiracy.

For example, on October 29, 2018, Danielian filled prescriptions for approximately 120 pills of 30-milligram strength oxycodone each for two fictitious patients, using a forged prescription falsely purporting to have been written by a physician.

In November 2020, the California State Board of Pharmacy placed Danielian on probation for four years and discontinued his business after he was accused of record-keeping deficiencies and dispensing narcotics authorized by fraudulent prescriptions.

According to the Accusation made by the State Board of Pharmacy, “During the course of the investigation into A&G and Danielian, an investigator found A&G and Danielian failed to maintain records of acquisition and disposition of dangerous drugs; dispensed erroneous prescriptions; failed to complete a required pharmacy self-assessment, failed to comply with reporting requirements to the Department of Justice, and participated in unprofessional conduct.”

“Pharmacists, by training and education, should be gatekeepers to help prevent abuse, addiction, and overdose,” prosecutors argued in a sentencing memorandum. “[Danielian] flouted this responsibility and instead became an agent of addiction and abuse.”

The Drug Enforcement Administration investigated this matter. Assistant United States Attorney Maria Jhai of the Terrorism and Export Crimes Section prosecuted this case.