Author: WorkCompAcademy

Drs. William Longton, Ruben Kalra, and Richard Shinaman have agreed to collectively pay $260,000 to settle allegations by the U.S. Department of Justice that they failed to keep and maintain adequate records and other allegations pertaining to controlled substances at their Novato, Pleasant Hill, and Pleasanton offices.

The physicians operate under the name Pain Medicine Consultants, Inc., with offices in multiple Bay Area locations.

The settlement agreement resolves allegations by the government that a January 2014 DEA inspection uncovered multiple violations by Longton, Kalra, and Shinaman of the Controlled Substances Act, 21 U.S.C. § 801.

In the agreement, the physicians acknowledge that they each, at the relevant time, were registered with the DEA as Practitioners, providing them with authorizations to handle Schedules II through V controlled substances. They also acknowledge they had an obligation to “keep and maintain” records related to their receipt and distribution of controlled substances in connection with their practices.

According to the agreement, following the DEA’s inspection, the government concluded that between January 10, 2012, through January 17, 2014, Shinaman, Longton, and Kalra failed to keep and maintain adequate records pertaining to controlled substances, as required by 21 C.F.R. § 1304, et seq.; failed to include the address of the patient on controlled substance prescriptions that they each issued as required by 21 C.F.R. § 1306.05(a); and exceeded the authority of their registrations by filling a prescription for a controlled substance, in violation of 21 C.F.R. § 1306.06.

According to the terms of the agreement, Longton, Kalra, and Shinaman will collectively pay the government $260,000 to resolve all civil claims related to the violations identified in the investigation.

Assistant U.S. Attorney Rebecca A. Falk is handling the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance from the DEA San Francisco Field Division, Oakland Resident Office Diversion Group.

The California Court of Appeal affirmed the rule that after discovery of undocumented worker status by an employer, the workers are entitled to most of the legal rights and remedies provided to employees by state and federal laws. This includes wage and hour laws.

Juan Luis Lepe, Virgilio Flores-Juarez, and Berna Vargas filed a lawsuit against their former employer, Luft Enterprises, a California Corporation, doing business as Inn-Decor and Otmar Luft, alleging unpaid overtime wages, failure to provide meal and rest periods, and other Labor Code violations and unfair business practices

The Company manufactures furniture for businesses such as restaurants and casinos. Plaintiffs worked 10 or more hours per day without an afternoon or second meal break. The Company failed to pay overtime wages or provide meal and rest periods. Prior to May 2010, defendants were aware that plaintiffs were not authorized to work in the United States due to their immigration status. This was the agreed upon claim period in this case.

The trial court entered judgment in favor of plaintiffs in the total amount of $140,016 (Lepe – $59,776; Flores-Juarez -$59,776; and Vargas – $20,464) and against all defendants jointly and severally. Plaintiffs were also awarded their attorney’s fees and costs.

Defendants appealed and challenge the judgment, contending (1) they may not be compelled, as a matter of law, to pay past wages allegedly due because plaintiffs were not legally authorized to work in the United States; (2) there is insufficient evidence that defendants issued inaccurate wage statements; (3) the trial court erroneously granted plaintiffs’ attorney’s fees motion; and (4) the trial court abused its discretion in awarding certain costs.

The Court of Appeal found merit in defendants’ challenge to the award of costs but otherwise affirmed in the unpublished case of Lepe v. Luft Enterprises, Calif. Ct. App., No. E067382 (May 10, 2018).

In support of their contention, defendants rely on the holding in Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407, 414, 424-425 (Salas). The Court of Appeal found such reliance to be misplaced.

In Salas, the plaintiff sued his former employer under the California Fair Employment and Housing Act (FEHA) alleging defendant employer failed to reasonably accommodate his physical disability and refused to rehire him in retaliation for filing a worker’s compensation claim. After the complaint was filed in Salas, the defendant learned that the plaintiff may have used another man’s Social Security number in order to gain employment. Defendant successfully moved for summary judgment.

The California Supreme Court reversed, holding that the federal Immigration Reform and Control Act of 1986 (8 U.S.C. § 1101 et seq.) did not preempt application of the antidiscrimination provisions of California’s FEHA to workers who are unauthorized aliens, but that “federal preemption does bar an award of lost pay damages under the FEHA for any period of time after an employer’s discovery of the employee’s ineligibility under federal law to work in the United States.”

In reaching this holding, the Salas court noted that its “preemption analysis for the postdiscovery period is limited to employers who discover the plaintiff employee’s unauthorized status after the employee has been discharged or not rehired. . . . Because imposing full liability for lost wages would provide a disincentive for such immigration law violations, thereby furthering the goals of federal immigration law, in these situations arguably federal law would not preempt lost wages remedies for violations of state laws like California’s FEHA.”

Here, defendants concede knowledge of plaintiffs’ unauthorized work status during the “agreed-upon claim period in this case.”

“Since defendants were aware of plaintiffs’ unauthorized work status during the time of their employment, defendants actively joined in the violation of federal immigration law. Under this circumstance, the Salas court holding does not apply, and plaintiffs are not barred from recovering their lost wages.”

The U.S. House of Representatives passed “right to try” legislation that would allow people with life-threatening illnesses to bypass the Food and Drug Administration to obtain experimental medications, ending a drawn-out battle over access to unapproved therapies.

Now the legislation needs approval from the Senate. If so, President Trump is expected to quickly sign the measure, which was praised by supporters as a lifeline for desperate patients but denounced by scores of medical and consumer groups as unnecessary and dangerous.

The FDA would be largely left out of the equation under the new legislation and would not oversee the right-to-try process.  Drug manufacturers would have to report “adverse events” — safety problems, including premature deaths — only once a year. The agency also would be restricted in how it used such information when considering the experimental treatments for approval.

Patients would be eligible for right-to-try if they had a “life-threatening illness” and had exhausted all available treatment options. The medication itself must have completed early-stage safety testing, called Phase 1 trials, and be in active development with the goal of FDA approval.

One Congressman opposing the bill argued that eliminating FDA oversight would “provide fly-by-night physicians and clinics the opportunity to peddle false hope and ineffective drugs to desperate patients,” noting that the bill is opposed by over 100 patient advocacy and consumer groups.

Right-to-try laws exist in 40 states — including California. But this federal bill would introduce legislation across state lines. Right To Try was signed into law in California (Assembly Bill No. 1668) by Governor Jerry Brown on September 27, 2016. It allows very sick patients to plea for experimental treatments directly from drug companies, instead of waiting for years for drugs to hit the market or asking the Food and Drug Administration for early access.

But patients and advocates said the California law does not function well without a federal counterpart. As it stands, if someone experiences adverse effects while taking a drug acquired through California’s Right to Try policy, the FDA can pull the treatment from the clinical trial process. The mismatch has made drug companies reluctant to participate.

The federal right to try law would make California law more effective, or eliminate the need for the California law altogether

This month, the California Supreme Court issued an order approving 69 new Rules of Professional Conduct, which will go into effect for California attorneys on Nov. 1, 2018. The current rules remain in effect until then.

The court approved 27 amended rules as a state bar committee submitted them. Justices modified and authorized 42 more. And they rejected entirely one proposed rule on a lawyer’s obligations to clients “with diminished capacity”

The California Rules of Professional Conduct are intended to regulate professional conduct of attorneys licensed by the State Bar through discipline. They have been adopted by the Board of Trustees and approved by the California Supreme Court pursuant to statute to protect the public and to promote respect and confidence in the legal profession. The rules and any related standards adopted by the Board are binding on all members of the State Bar.

The new rules are the first comprehensive changes to the rulebook in 29 years. The ethical roadmap for California’s 250,000 attorneys covers 112 pages. It was approved by all seven justices. Here are five things lawyers should know about the new rules according to the summary on law.com.

➤➤ Conflict of interest rules are broader and less case-specific. For example, a new definition of what constitutes a legal “matter” covered by conflict disclosure and non-representation requirements is more expansive now. The changes are much more conforming and much more inclusive of how lawyers nationally understand conflicts of interest.

➤➤ Prohibitions on harassment, discrimination and retaliation by lawyers, both in the workplace and in the practice of law, have been expanded. The rule, the subject of intense debate during drafting, requires “all law firm lawyers the responsibility to advocate corrective action to address known harassing or discriminatory conduct by the firm or any of its lawyers or nonlawyer personnel.”

The state bar can now open an investigation into alleged harassment or discrimination without a triggering civil finding by another agency. Lawyers who receive a related disciplinary charge from the bar will be required to notify state and federal workplace-fairness agencies. One observer said “It’s frankly as broad as about any rule in the country.”

➤➤ The rules don’t specifically mention lawyers serving clients in the marijuana industry. The rules-writing committee sent the Supreme Court a proposed rule “Rule 1.2.1” that would allow lawyers to “discuss the legal consequences of any proposed course of conduct with a client” so long as they don’t counsel that client to break the law. Tuft said the high court sent the rule back about a month ago for more work on some accompanying comments but not the language of the rule itself. Tuft said the rule should be applicable to various topics, such as immigration, where federal and state laws conflict.

➤➤ In most cases, lawyers can’t have sexual contact with their clients. This rule has received a lot of public attention. Currently, the rules bar lawyers from having sex with clients if the act is coerced or considered a form of payment for services rendered. The new rule forbids lawyer-client sex unless there was a previous consensual relationship.

➤➤ The court nixed a rule laying out a lawyer’s responsibilities in representing clients with “diminished capacities.” The justices did not explain the deletion, although they may have decided language dealing with client confidentiality and privacy may have stepped too far into the Legislature’s purview. The California Lawyers Association’s trusts and estates section had sought more clarity in the rules for attorneys practicing in this field.

Attorneys have about six months to become familiar with the rest of the 69 new rules. Ethics is a mandated continuing education topic, and this MCLE cycle will no doubt cover these new rules.

The Division of Workers’ Compensation has suspended three more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended to 245.

The most well know on the new list is Ronald Grusd MD who was convicted in federal court in 2017 for his involvement in a complex illegal referral scheme with suspended providers Steven Rigler, Carlos Arguello, Fermin Iglesias and Alexander Kiev Martinez to defraud the California workers’ compensation system by recruiting patients, paying illegal referral fees, and fraudulently submitting misleading documentation to insurers.

Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were convicted by a federal jury of fraud and bribery charges in connection with a massive health care-fraud scheme.

After a seven-day trial, the jury found Grusd and his companies guilty on all charges facing them, including Conspiracy, Honest Services Mail and Wire Fraud, Health Care Fraud, and Travel Act violations, based on their years-long bribery and fraud scheme.

According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $25 million for medical services. Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications.

After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over one hundred thousand dollars in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.

Grusd and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from “Operation Back Lash” – a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system that is continuing.

Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

Also on the new suspension list is Toros Yeranosian of Encino, co-owner of Mauran Ambulance Service, and Aharon Krkasharyan of Los Angeles, manager of Mauran, were convicted in federal court in 2017 of conspiracy to commit healthcare fraud for their involvement in an illegal scheme of providing unnecessary ambulance transportation services to Medicare beneficiaries and creating fraudulent reasons that justified the services. Yeranosian, Krkasharyan and their co-conspirators submitted over $1 million in false and fraudulent claims to Medicare.