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Novartis Opens New Manufacturing Facility in Carlsbad

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Novartis announced the opening of a new 10,000-square-foot radioligand therapy (RLT) manufacturing facility in Carlsbad, California. This state-of-the-art site represents a key milestone in the company’s previously announced $23 billion investment in US infrastructure over the next five years.

The opening of the Carlsbad manufacturing facility allows Novartis to seamlessly meet future demand for RLT, adding additional capacity and augmenting the company’s world-class supply chain capabilities. The Carlsbad facility has been filed with the FDA as an additional US point of supply, and commercial manufacturing may begin once approval is granted.

RLTs are a form of precision medicine that combines a tumor-targeting molecule (ligand) with a therapeutic radioisotope, enabling the delivery of radiation to the tumor with the goal of limiting damage to the surrounding cells. Because each RLT dose is custom-made and time-sensitive, with a radioactive half-life measured in hours, proximity to treatment centers and transit hubs helps ensure patients receive their treatment when and where they need it.

Novartis is the only pharmaceutical company with a dedicated commercial RLT portfolio, and the Carlsbad facility is its third US RLT manufacturing site, reinforcing its global leadership in radioligand therapies with unmatched expertise in development, production, and delivery to patients worldwide. The Carlsbad facility is purpose-built to manufacture the company’s FDA-approved RLTs with capacity for future expansion.

“We commend Novartis for supporting our broader mission of bringing manufacturing capacity in the United States,” said FDA Commissioner Marty Makary, M.D., M.P.H.. “Our unique partnership approach is working.”

“Novartis is transforming the future of cancer care – and it’s happening right here in Carlsbad,” said Carlsbad City Council Member Melanie Burkholder. “This new advanced RLT production facility is a major milestone for our region, strengthening California’s position as a hub for life sciences innovation. It will bring exciting new opportunities for our community, including more engineering and manufacturing jobs. I’m proud our local community will be part of the future of cancer care.”

In addition to the Carlsbad opening, Novartis has announced multiple construction initiatives and future plans in the US, including:

– – Two additional RLT manufacturing facilities in Florida and Texas.
– – Expansion of existing sites in Durham, North Carolina, Indianapolis, Indiana, and Millburn, New Jersey.
– – Establishing its second global R&D hub in the US with a new state-of-the-art biomedical research innovation facility in San Diego, California.

These investments, enabled by a pro-innovation policy and regulatory environment in the US, reflect Novartis’ broad commitment to the market and building its infrastructure. Novartis expects to invest nearly $50 billion in its US operations over the next five years, including the $23 billion announced earlier this year, underscoring its long-term commitment to strengthening the US healthcare ecosystem.

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Cal Supreme Court Says Criminal Misgendering Law is Constitutional

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In 2017, the Legislature enacted the Lesbian, Gay, Bisexual, and Transgender Long-Term Care Facility Residents’ Bill of Rights. The legislation comprehensively addresses issues concerning lesbian, gay, bisexual, and transgender (LGBT) seniors’ access to, and treatment by, “[l]ong-term care facilit[ies] – an umbrella term covering entities that provide services ranging from skilled nursing to residential personal care for the elderly.

In December, just before the 2017 law went into effect, plaintiff Taking Offense (which describes itself as an entity dedicated to opposing efforts “to coerce society to accept [the] transgender fiction that a person can be whatever sex/gender s/he thinks s/he is, or chooses to be”) filed a petition for a writ of mandate in the superior court seeking to block enforcement of the pronouns provision as facially unconstitutional under the First Amendment to the United States Constitution. The lawsuit worked its way up to the California Supreme Court.

On November 6, 2025, the Supreme Court delivered a significant ruling in Taking Offense v. State of California (S270535), a case challenging a key provision of the 2017 Lesbian, Gay, Bisexual, and Transgender (LGBT) Long-Term Care Facility Residents’ Bill of Rights. This legislation aimed to fulfill existing anti-discrimination laws by explicitly prohibiting various forms of bias based on sexual orientation, gender identity, gender expression, or HIV status. The Legislature cited studies highlighting pervasive mistreatment of LGBT elders, including denial of admission, abrupt discharges, harassment, restrictions on visitation, and refusal to use preferred names or pronouns, often stemming from lifelong marginalization that left many without family support networks.

At the heart of the dispute was Health and Safety Code § 1439.51, subdivision (a)(5) – the “pronouns provision” – which makes it unlawful for facility staff to “[w]illfully and repeatedly fail to use a resident’s preferred name or pronouns after being clearly informed,” when motivated wholly or partially by the resident’s protected characteristics. Enforcement draws from pre-existing administrative, civil, and, in extreme cases, criminal penalties applicable to other violations in long-term care settings. Taking Offense, an unincorporated association of California taxpayers opposed to what it termed the “transgender fiction,” filed a pre-enforcement petition for writ of mandate in Sacramento County Superior Court in December 2017, seeking to block the provision as a facial violation of the First Amendment’s free speech protections.

The trial court denied the petition, upholding the provision against First Amendment challenges. On appeal, the Third District Court of Appeal partially reversed in 2021, deeming the pronouns provision overinclusive and insufficiently tailored to the state’s anti-discrimination interest, thus facially unconstitutional under heightened First Amendment scrutiny – whether viewed as content-based speech regulation or compelled speech. The appellate court emphasized that the law criminalized a viewpoint on gender identity without adequately advancing its goals.

The Supreme Court granted review. In a unanimous opinion the court first addressed standing, raised by the state for the first time on review. The justices agreed that the 2018 amendment to Code of Civil Procedure § 526a, which governs taxpayer standing, now limits such suits to local governments and excludes wholly state entities or officers. Tracing the evolution from common law taxpayer standing to the statute’s history, the court clarified that prior decisions blending the two doctrines no longer apply post-amendment. However, under the case’s unusual circumstances – including the state’s delayed objection, the parties’ full litigation of the merits, and the court’s own past expansive interpretations – the justices exercised discretion to reach the merits, avoiding an advisory opinion while deferring broader questions about common law or public interest standing.

On the substance, the court reversed the Court of Appeal, upholding the pronouns provision. Emphasizing the narrow context – vulnerable residents in a “captive audience” environment akin to their home, where staff provide intimate medical and personal care – the justices characterized the law as a regulation of discriminatory conduct that only incidentally burdens speech. Drawing on U.S. Supreme Court precedents like R.A.V. v. City of St. Paul (1992) and this court’s plurality in Aguilar v. Avis Rent A Car System, Inc. (1999), the opinion reasoned that anti-discrimination measures targeting hostile environments, such as workplace harassment, do not trigger First Amendment scrutiny merely because they involve words. The provision is carefully limited: it requires willful, repeated, knowing acts motivated by bias, exempts professionally reasonable clinical judgments, and does not bar staff from expressing gender views in other ways or contexts. Distinguishing cases like Reed v. Town of Gilbert (2015) and 303 Creative LLC v. Elenis (2023), which involved content-based restrictions in public forums or compelled expressive services, the court found no abridgment of free speech rights.

Even assuming intermediate scrutiny applied (as a content-neutral regulation), the provision was appropriate as it advances compelling state interests in protecting LGBT seniors’ dignity, access to care, and freedom from discrimination in a setting where avoidance is impractical, and it is narrowly tailored without restricting more speech than necessary. The court also rejected claims that potential criminal penalties – available only for egregious, unremedied violations after administrative processes – render the law facially invalid, noting their rarity and the Legislature’s intent to use them as a last resort.

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Inland Empire Hospice Operators Sentenced in Fraud Case

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Inland Empire Hospice operators, Ralph and Rochell Canales, were sentenced for submitting false claims to the Medicare and Medi-Cal programs. Ralph was sentenced by the San Bernardino County Court to seven years and four months in state prison and was jointly ordered to pay $1,455,233.

Rochelle was sentenced to one year in jail, and ordered to abstain from working with Medicare and Medi-Cal beneficiaries in a caregiver or fiduciary capacity and from working for any healthcare provider that receives funds from Medicare or Medi-Cal. The prosecution of these individuals was carried out by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse.

From 2013 through 2022, Ralph Canales and his wife Rochell Canales, along with brother Sherwin Canales and business partners Giovanni and wife Maureen Ibale, operated Sterling Hospice, New Hope Hospice, River of Light Hospice, and Mt Olive Hospice in the Inland Empire. Ralph Canales played a primary role as owner and operator of these companies while his wife played a supporting role at the direction of her husband. While running these companies, these individuals paid illegal kickbacks, in the form of cash and personal checks, to illicit marketers and two Inland Empire-area doctors, who certified patients for hospice services though the patients were not suffering from conditions likely to be terminal.

Between the four companies, at least 52 patients were identified as being ineligible to receive hospice care substantially defrauding the Medicare and Medi-Cal programs. In addition to committing fraud against the Medicare and Medi-Cal programs, Ralph and Rochell failed to pay corporate taxes to the Franchise Tax Board and California Employment Development Department.

Since taking office, the current Attorney General said that he has filed criminal charges against 109 individuals with hospice fraud-related offenses and conducted 24 civil investigations, which resulted in multiple civil filings. Building on his efforts to combat hospice fraud, this August, the Attorney General launched a new initiative aimed at educating the public and providing vital reporting resources to individuals and families who may have been impacted by hospice fraud.

DMFEA works to protect Californians by investigating and prosecuting those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state, and those who perpetrate fraud on the Medi-Cal program.

The Division of Medi-Cal Fraud and Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $77,652,892 for Federal Fiscal Year (FFY) 2026.  The remaining 25 percent, totaling $25,884,297 for FFY 2026, is funded by the California Attorney General’s Office.  FFY 2026 is from October 1, 2025 through September 30, 2026.  

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Uber/Lyft Sued for Passenger Gender Preference Programs

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On November 3, 2025, two nearly identical class action lawsuits were filed in the San Francisco Superior Court, targeting the ridesharing giants Uber and Lyft for alleged sex-based discrimination against male drivers through preferential matching programs designed to prioritize female and nonbinary drivers for certain passengers.

In the case of Almond and Ruud v. Uber Technologies, Inc., plaintiffs Andre Almond and Hans Ruud – both allegedly highly rated, long-term male independent contractors who have driven for Uber in California for over seven and ten years, respectively – accuse Uber of unlawfully implementing its “Women Preferences” program on August 13, 2025, in Los Angeles and San Francisco.

This initiative, which Uber had piloted globally since 2019 in over 40 countries and completed more than 100 million sex-segregated rides, allows female riders to request female drivers via in-app settings, effectively reserving access to roughly half the passenger pool (female riders) for the 20% of drivers who are women.

Male drivers like the plaintiffs, who represent about 80% of Uber’s workforce and allegedly have spotless safety records with female passengers, are systematically excluded from these matches, resulting in lost income, fewer ride opportunities, reputational harm from implied unsafety stereotypes, and strained rider relationships.

Despite alleged internal memos from 2022 highlighting “significant legal risk” under U.S. anti-discrimination laws – and delays in domestic rollout due to counsel’s warnings – Uber proceeded, promoting the feature for “safety and confidence.”

The suit claims this violates California’s Unruh Civil Rights Act, which broadly prohibits arbitrary sex discrimination in business establishments and entitles victims to at least $4,000 in statutory damages per violation. It is seeking class certification for over 80,000 affected male California drivers, the plaintiffs demand declaratory and injunctive relief to halt the program, plus actual, punitive, and compensatory damages, restitution, attorneys’ fees, and a jury trial.

Also on November 3, the same lawfirm filed Kennedy v. Lyft, Inc.- which brings forth plaintiffs William Kennedy and Louie Alatorre – fellow veteran male Lyft drivers from Los Angeles County allegedly with over eight years of service, thousands of five-star rides, and no incidents involving female passengers. They charge Lyft with perpetuating similar bias via its “Women+ Connect” program, launched nationwide on September 11, 2023, and expanded to over 240 markets by 2025.

According to the information on the Lyft website “Women+ Connect puts women and nonbinary people in the driver’s seat – literally – by letting them choose to match with more women and nonbinary riders. The feature offers the option to turn on a preference in the Lyft app to prioritize matches with other nearby women and nonbinary riders. If no women or nonbinary riders are nearby, drivers with the preference on will still be matched with men as Women+ Connect is a preference feature, not a guarantee.”

These plaintiffs allege Lyft “has facilitated “millions” of such sex-based assignments, openly advertising the tool for enhanced “comfort” and “peace of mind” despite knowing it disadvantages the 77% male driver majority.”

The Lyft case is proposing a class of hundreds of thousands of impacted male California drivers (potentially over 80,000), they seek the same sweeping remedies: program termination through injunctions, statutory damages starting at $4,000 per violation, disgorgement of profits, punitive awards, interest, costs, and a jury trial.

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Aetna Resolves SoCal Denial of Disc Surgery Class Action

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A consolidated class action lawsuit has been pending in the U.S. District Court for the Central District of California for about six years. It challenged Aetna Life Insurance Company’s longstanding policy of classifying single-level lumbar artificial disc replacement (L-ADR) surgery as “experimental and investigational,” leading to systematic denials of coverage for plan members seeking this treatment for degenerative disc disease or related spinal conditions.

The consolidated action, In re Aetna Lumbar Artificial Disc Replacement Coverage Litigation, stems from two primary complaints:

– – Hendricks v. Aetna Life Insurance Co. (filed August 2019) Case No.2:19-cv-6840-AB (MAAx): A proposed class action by plaintiffs Brian Hendricks and Andrew Sagalongos, alleging systematic ERISA violations for denying L-ADR coverage to 239 class members from 2014 onward. This case was certified in June 2021 for claims under the “abuse of discretion” review standard.
– – Howard v. Aetna Life Insurance Co. (filed March 2022) Case No. 2:22-CV-01505-AB (MAAx): A separate proposed class action by plaintiff Andrew Howard, alleging similar ERISA breaches for denials under the “de novo” review standard (affecting 43 class members from 2019–2023). Certified in February 2024.

Artificial disc replacement (ADR) is newer type of spinal disc procedure that utilizes an anterior (front – through the abdominal region) approach to replace a painful, arthritic, worn-out intervertebral disc of the lumbar spine with a metal and plastic prosthesis (artificial disc). It is an alternative to traditional spinal fusion.

The suit alleged violations of the Employee Retirement Income Security Act (ERISA), claiming Aetna’s denials were arbitrary, not based on credible evidence, and inconsistent with FDA approvals (e.g., for devices like the ProDisc-L since 2006) and medical guidelines from organizations like the North American Spine Society (NASS). Plaintiffs argued this practice caused financial harm, forcing patients to pay out-of-pocket or forgo treatment.

At At the time of settlement, Aetna had produced nearly 30,000 pages of information concerning the class and merits issues in the consolidated cases. For their part, Plaintiffs produced nearly 1,500 pages of information supportive of their position that Aetna’s policies and practices are amenable to class treatment and that L-ADR is a safe and effective treatment for degenerative disc disease.

The parties participated in multiple days of mediation before Edwin Oster, Esq., an experienced and well-respected private mediator with Judicate West over a three-year period. The parties first participated in mediations and negotiations between July 2022 and April 2023. After these negotiations failed, the parties engaged in further vigorous litigation, merits discovery and expert discovery before participating in an additional mediation and arm’s-length negotiations between March 2025 and May 2025. The parties notified the Court that they reached a settlement in principle on May 16, 2025, two weeks before the final pre-trial conference and six weeks before trial. (

According to the Motion for Preliminary Approval of Class Action Settlement filed on October 8, 2025 by plaintiff attorneys, “After nearly six years of vigorous litigation, investigation, and discovery, multiple mediations, and only six weeks before the scheduled trial in this matter, Plaintiffs Brian Hendricks, Andrew Sagalongos, and Andrew Howard (collectively, “Plaintiffs” or “Class Representatives”) and Defendant Aetna Life Insurance Company (“Aetna”) agreed to settle this class action on the terms set forth in the Settlement Agreement “

The Settlement provides that all Class Members who paid out-of-pocket for Single-Level L-ADR will be reimbursed up to $55,000. In addition, the Settlement provides that Class Members who have not yet the L-ADR are entitled to surgery or reimbursement for a future surgery. Class Members who are current Aetna members will be authorized for a future Single-Level L-ADR so long as their surgeon attests that the surgery is medically necessary for them, without any review by Aetna using Aetna’s own internal medically necessity criteria.

Several other major insurance companies have faced class action or ERISA-based lawsuits challenging their systematic denials of coverage for single-level lumbar artificial disc replacement (L-ADR) surgery, often labeling it as “experimental,” “investigational,” or “unproven” despite FDA approvals dating back to 2004 (e.g., for devices like the ProDisc-L). These cases mirror the Aetna litigation in alleging violations of the Employee Retirement Income Security Act (ERISA) for arbitrary denials that force patients to pay out-of-pocket or opt for less effective alternatives like spinal fusion.

As in the Aetna case, most suits have been filed in the U.S. District Court for the Central District of California, with some settlements achieved. However, coverage has improved industry-wide – now about 90% of private insurers cover single-level L-ADR, up from near-zero in the early 2000s.

Aetna revised its policy in February 2023 to cover single-level L-ADR as medically necessary under certain criteria. These suits have driven policy changes. For instance, post-settlement, UnitedHealthcare and Anthem now cover L-ADR for eligible patients, reducing denials to <10% industry-wide.

Litigation continues in a case pending in the Central District of California which was filed in 2021 against Blue Shield of California. (Torres v. California Physicians’ Service d/b/a Blue Shield of California Case No. 2:21-cv-08942-FMO-JEM filed October 29, 2021).

This suit, led by the same firm (Gianelli & Morris), alleges similar ERISA violations for BSC’s continued blanket denials of L-ADR coverage as “experimental/investigational” post-2017 settlement, particularly for patients not fitting narrow post-policy criteria or under self-funded plans. It claims BSC failed to fully implement the injunctive relief from Escalante v. California Physicians’ Service d/b/a Blue Shield of California (Case No. 2:14-cv-03021-DDP-PJW), leading to renewed harms (e.g., out-of-pocket costs exceeding $40,000 per patient).

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October 27, 2025 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: DIR, Uber and Lyft Battle About Cal/OSHA Jurisdiction Over Drivers. Marin County Woman Sentenced for Insurance Fraud. Recruiters & Fraud Discovered in LA County $4B Sexual Abuse Case. DOJ and Kaiser Permanente Near Settlement of $1B Fraud Case. New Law Prohibits ‘Stay or Pay’ Employment Contracts. Congress Set to Review Another Lawsuit Abuse Reduction Act. Federal Judiciary Limiting Operations As Funding Ran Out Monday. Sutter Health Use of AI Improves Cancer Detection Rates.

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NYT: “California Promised Insurance Relief, But Delivered Loopholes”

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California has been grappling with a severe homeowners insurance crisis for several years, driven primarily by escalating wildfire risks amid climate change, rising rebuilding costs due to inflation, and high reinsurance expenses for insurers. Major companies like State Farm, Allstate, and Farmers have restricted new policies, non-renewed existing ones in high-risk areas, or limited coverage, leaving hundreds of thousands of homeowners reliant on the California’s FAIR Plan – the state’s insurer of last resort. The FAIR Plan offers bare-bones coverage at higher premiums and has grown exponentially, doubling in size in recent years, raising concerns about its sustainability.

The California Insurance Commissioner introduced the Sustainable Insurance Strategy in 2023, with key reforms finalized in late 2024 and taking effect in 2025. These include:

– – Allowing insurers to use forward-looking catastrophe models (incorporating climate projections) when setting rates.
– – Permitting insurers to factor in reinsurance costs.
– – In exchange, requiring insurers to write new policies in “distressed” (high-risk) areas proportional to their statewide market share – specifically, at least 85% of their overall policies must be in these areas to qualify for rate hikes.
– – Designating 662 ZIP codes and entire counties as “distressed” based on criteria like high non-renewal rates and FAIR Plan dependency.
– – Options for smaller insurers or those claiming hardship to increase policies in distressed areas by just 5% year-over-year.

The goal: Provide and incentive for private insurers to return to the market, reduce FAIR Plan reliance, and stabilize availability while approving necessary rate increases.

In a November 1, 2025, investigative article titled “California Promised Insurance Relief, But Delivered Loopholes,” The New York Times (NYT) argued that these reforms have failed to deliver meaningful relief for homeowners in fire-prone areas. Through data analysis (cross-referencing state fire hazard maps, FEMA building data, and Department of Insurance designations), interviews, and document review, the NYT highlighted several loopholes allegedly negotiated by the insurance industry. While intended for high-risk zones, many of the 662 distressed ZIP codes and all 58 counties include large low-risk areas. For example:

– – In over 100 distressed ZIP codes, fewer than one-third of homes are in high/very high fire hazard zones.
– – Some ZIP codes (e.g., urban East Los Angeles) have no homes in high-risk zones despite designation.
– – Insurers can meet the 85% requirement by insuring safer homes within these broad areas, avoiding truly vulnerable foothills.

The NYT quoted Commissioner Lara admitting the state negotiated from a “crisis” position and felt “bullied” by the industry. Experts like former commissioner Dave Jones called it marching toward an “uninsurable future.” The article portrayed the reforms as a windfall for insurers, undermining consumer protections under Proposition 103 (California’s rate-regulation law).

According to the NY Times “In the six months after the deal was announced, California’s three largest insurance groups informed the state of their plans to dump nearly 50,000 existing policies, five times the number filed by those companies in the 20 months preceding the deal. And the new regulations will effectively reward them for doing it. More than a fifth of the nonrenewals – about 11,000 policies in total – were in ZIP codes within or adjacent to areas that would burn in the January fires, the Times analysis found. The vast majority of those were in and around Pacific Palisades, where fire later destroyed more than 6,800 structures.”

“Vast swaths of the designated areas where insurers must write new policies do not in fact overlap with areas that California’s state fire marshal deems to be the most fire-prone, the investigation found, meaning that insurers can load up on coverage in areas the state considers to be safer and still qualify to charge higher rates.”

“And while the regulations were billed as an attempt to get homeowners off the state’s overburdened last-resort insurance program, FAIR, the number of residential FAIR policies has nearly doubled since the new insurance deal was announced, rising to 625,033 from 320,581, the Times review found.”

The APCIA (American Property Casualty Insurance Association), representing major home, auto, and business insurers, issued a press release pushing back strongly against the NYT piece, calling it a “misleading narrative” on California’s insurance market. APCIA argues that the suggestion of insurer control over “distressed” area designations is factually wrong -these are determined independently by the California Department of Insurance (CDI) based on data like non-renewal rates, FAIR Plan enrollment, and risk assessments, not by industry lobbying or input.

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12,500 Attend World’s Largest Annual Safety Event

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The National Safety Council welcomed more than 12,500 attendees and 1,000 exhibitors for the 2025 NSC Safety Congress & Expo, held Sept. 12-18 at the Colorado Convention Center in Denver. The event marked the 113th edition of the world’s largest annual safety gathering.

The Safety Congress & Expo brought together safety professionals, thought leaders and exhibitors from across the globe. Across 217,000 net square feet of exhibit space, companies showcased innovative safety technology and solutions designed to protect workers and save lives.

Keynote speakers included Amanda Wood Laihow, then-acting assistant secretary of the Occupational Safety and Health Administration, four-time Olympian Chaunté Lowe and Shazam founder Chris Barton, among others.

The 11th annual Best in Show – New Product Showcase Awards recognized 67 safety products from 43 different companies. This year’s winners were:

– – First place: Elmridge Protection Productions – iEvac E500 Escape Hood, an escape hood that provides rapid protection from toxic gases, vapors and particulates in industrial environments.

– – Second place: PIP Global Safety – Traverse™ Type ll Safety Helmet with Quin and Mips® 280-HP1491RM-QPOD, a state-of-the-art helmet that protects from various types of impacts in occupational settings.

– – Third place: Werner – Cable Grab, a premium grade cable grab device that allows smooth climbing operations equipped with a self-closing and auto-locking carabiner.

“The 2025 NSC Safety Congress & Expo brought together safety professionals from around the world ready to drive change,” said Lorraine Martin, NSC CEO. “Attendees explored cutting-edge innovations, learned about fresh solutions and connected with peers facing similar challenges. The insights and tools gained will help them champion meaningful change to save lives in our workplaces and in our communities.”

The 2026 NSC Safety Congress & Expo will take place Sept. 11-17, 2026, in Indianapolis. For more information, please visit congress.nsc.org.

The National Safety Council is America’s leading nonprofit safety advocate – and has been for over 110 years. As a mission-based organization, we work to eliminate the leading causes of preventable death and injury, focusing our efforts on the workplace and roadways. We create a culture of safety to not only keep people safer at work, but also beyond the workplace so they can live their fullest lives.

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Costco, Ryder Last Mile, Mega Nice Trucking Cited for Misclassification

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The California Labor Commissioner’s Office cited Costco Wholesale Corporation, Ryder Last Mile Inc., and Mega Nice Trucking LLC for misclassification and labor law violations affecting 58 delivery drivers.

Mega Nice Trucking, based in Chula Vista, served as a subcontractor for third-party logistics companies, including Ryder Last Mile, which contracted with drivers to deliver large items from big box retailers across the San Diego region.

An investigation by the LCO’s Bureau of Field Enforcement (BOFE) determined that drivers working under Mega Nice Trucking were systematically misclassified as independent contractors, depriving them of basic workplace protections such as minimum wage, overtime pay, and legally mandated meal and rest breaks.

Although the drivers were reclassified as employees in 2023, the violations persisted. Workers continued to receive a flat daily rate without proper compensation for overtime hours or missed meal breaks. Investigators also uncovered falsified payroll records, suggesting deliberate efforts to conceal these ongoing labor law violations.

The LCO also found that Costco and Ryder Last Mile exercised both direct and indirect control over the delivery drivers. They scheduled deliveries, mandated uniforms, enforced specific protocols, and closely monitored driver performance. These actions establish a joint employer relationship with Mega Nice Trucking and make Costco and Ryder Last Mile equally liable for the misclassification and resulting wage theft.

The investigation began in July 2024 after two former Mega Nice Trucking employees filed complaints alleging wage theft and misclassification. During the investigation, Mega Nice Trucking admitted to misclassifying its drivers. Investigators also discovered that the company had previously been penalized by the California Employment Development Department for similar violations, indicating a repeated pattern of noncompliance.

Costco, Ryder Last Mile, and Mega Nice Trucking have been jointly cited by the LCO for a total of $868,128, of which $662,978 is payable to the affected workers. All three employers have appealed the citations.

The Bureau of Field Enforcement (BOFE) is a unit within the LCO enforcing key labor laws through on-site investigations and strategic enforcement actions.

BOFE targets industries with high rates of labor violations, conducting workplace inspections to uncover wage theft, child labor violations, failure to carry workers’ compensation insurance, and other unlawful employment practices. Its work helps ensure fair treatment for workers while promoting a level playing field for responsible employers.

BOFE has issued more than 2,200 citations against employers for labor law violations between January 2022 and October 2025, recovering over $48.4 million in stolen wages, damages, and interest on behalf of workers.

This comes on top of multiple announcements this year highlighting a range of violations, including a settlement of $431,601 to return unpaid wages and damages to 86 carpenters, $1.1 Million in penalties issued to a Buena Park restaurant over wage and sick leave violations, and a citation of over $2 million for another case of misclassifying workers.

BOFE has also issued more than 3,100 notices to discontinue labor law violations in the past year, and corrected violations that collectively impacted more than 40,000 California workers.

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NCCI Publishes 3rd Quarter Medical Inflation Insights Report

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The NCCI Medical Inflation Insights report provides a quarterly overview of the latest insights and analysis into what is driving changes in claim costs, and how these changes may or may not impact workers compensation. NCCI released its latest quarterly edition on October 30, 2025.

The Workers Compensation Weighted Medical Price Index (WCWMI) is a composition of medical cost components from the Producer Price Index and the Consumer Price Index, reweighted using our Medical Call data to better match the mix of spend in workers compensation.

In the third quarter of 2025, the average medical cost for a lost-time workers-compensation claim climbed 3.8 % compared with the same quarter a year earlier – noticeably above the 2.4 % rise in the Consumer Price Index for Medical Care yet only half the 7–8 % jumps seen in group-health plans.

Physician services, which make up four out of every ten medical dollars, rose 4.2 %, pushed higher by more office visits and pricier evaluation-and-management codes. Hospital outpatient payments jumped 5.1 % as facilities layered on extra facility fees and shifted routine injections into hospital-owned clinics. Inpatient hospital costs stayed nearly flat, gaining just 0.8 %, thanks to fixed per-diem schedules in many states. Prescription-drug spend held steady at 0.0 % change, the eighth straight quarter of no inflation, as generics now fill 93 % of scripts and opioid volume has fallen 45 % in five years.

Zoom out and the picture softens: the one-year rolling average sits at +3.5 %, the three-year average at +2.9 %, and the five-year average at +2.4 % – all comfortably below the 4–6 % medical inflation that carriers baked into 2025 rate filings.

However, based on historical trends and the broader economic backdrop, NCCI believe this softening is more likely to be temporary than a new emerging trend. Should hospital services price growth rise back into the 4% to 5% range next year and other categories remain constant, overall price growth would be closer to 3% rather than the current 2.5%

Looking ahead, early 2026 claim data show physician and outpatient prices still accelerating, but a wave of new generic launches and tighter hospital networks should keep the full-year increase under 4 %. For the first time in three years, workers-comp medical trend is once again tracking below both Medicare and group-health benchmarks, giving underwriting teams breathing room on loss costs and reserves.

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