Author: WorkCompAcademy

In November 2010, Brad Culpepper filed a claim for workers’ compensation benefits for injuries he allegedly suffered playing professional football. In 2000, Culpepper played six games in California while a member of the Chicago Bears, making him eligible for California benefits.

Fairmont Premier Insurance Company settled with Culpepper for $175,000 by way of an Order Approving  Compromise and Release.

Shortly after the settlement Culpepper became a contestant on the reality television show Survivor, a show which can be physically demanding on its contestants.Fairmont alleges in its subsequent civil action against him, that during the pendency of Culpepper’s workers’ compensation claim, he engaged in activities such as running and kickboxing that were inconsistent with his claimed disability. Fairmont also alleges Culpepper misled the medical examiners hired as part of the claim process to evaluate his condition.

On December 21, 2015 Fairmont filed the instant qui tam action in California state court under California’s Insurance Fraud Prevention Act (IFPA) § 1871.7(e)(1). Culpepper removed the case to federal court on the basis of diversity,and moved to dismiss under Fed. R. Civ. P. 12(b)(1).

Culpepper argued that California Labor Code § 5901 divests the court of jurisdiction to hear this case. CLC § 5901 divests courts of jurisdiction to consider causes of action “arising out of any final order, decision or award” of the WCAB until after the WCAB has had an opportunity to reconsider its prior ruling. The district court granted Culpepper’s motion and dismissed the suit because it concluded that the instant qui tam suit “arises out of” the OACR, which is a “final order” per § 5901, and because Fairmont had not asked the WCAB to reconsider the OACR prior to filing this suit.

The United States Court of Appeals for the 9th Circuit reversed in the unpublished case of People of the State of California ex rel. TIG Insurance Co. v Culpepper.

IFPA § 1871.7(b) authorizes a relator to bring a qui tam claim on behalf of the State of California when the relator discovers violations of, inter alia, CPC § 550.3 CPC § 550 in turn prohibits “knowingly present[ing] or caus[ing] to be presented any false or fraudulent claim” for insurance.

Fairmont alleges Culpepper violated CPC § 550 when he “presented” a fraudulent claim for insurance. Its claim therefore arises from Culpepper’s allegedly fraudulent presentation of his claim for insurance benefits, not from the settlement of that claim or from the WCAB’s approval of that settlement. Even if no settlement had ever been reached, a suit under CPC § 550 may still be available so long as the relator has discovered the presentation of a fraudulent claim. This suit therefore does not arise from the OACR, and the trial court has subject matter jurisdiction to hear it. The Court said it will not construe the term “arising out of” beyond its plain meaning as Culpepper suggests.

The WCAB also does not have exclusive jurisdiction over this appeal because this is an action on behalf of the State of California, not an action for benefits against an employer. People ex rel. Alzayat v. Hebb, 18 Cal. App. 5th 801, 830 (Cal. Ct. App. 2017).

The federal courtroom battle over the survival of the new automatic stay law governing liens filed by indicted medical providers has been more than one year of mostly unsuccessful litigation.

Dr. Eduardo Anguizola, while facing multiple counts of insurance fraud filed by Orange County prosecutors, is one the plaintiffs who claims Labor Code 4615 – the automatic lien stay law – violates the procedural component of the due process clause because it immediately stays all liens without notice or a hearing.

Soon after this suit was filed, Governor Brown signed AB 1422 into law which was adverse to his federal claim. AB 1422 contains a new LC 4615 subsection (e) which reads “The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers’ compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider.”

Last December the federal court issued a restraining order against the DIR. It limited stays to instances where the lien claimant was given proper notice, and required a hearing before the WCAB should any of them claim they should not be subject to a stay. It was a partial victory for plaintiffs who sought more restraint.

In February 2018, the plaintiffs filed two new motions, one asking the court to hold the DWC in contempt, and the other, alternatively to reconsider its December 2017 ruling. The court just denied both motions.

The defendants also filed a new motion to dismiss certain claims in the First Amended Complaint. The court granted the motion, and dismissed the first, second, third, fourth, and fifth claims (except for the facial due process component of the fourth claim for relief) without prejudice. As to the sixth and seventh claims for relief (the Supremacy Clause claim and the Takings Clause claim), the Court dismissed those claims with prejudice. The plaintiffs have until May 17 to file a Second Amended Complaint.

In support of the motion for contempt the plaintiffs argued that defendants have “employed new, bizarre, and unprecedented procedures, which they recently manufactured to continue the farce that the Section 4615 provides due process to aggrieved lien claimants.” They cited as examples that procedures used at lien conferences are not within WCAB’s usual procedures and are thus violate the injunction. The Court responded by noting “that WCAB judges have a wide latitude to develop the record and obtain evidence.”

After reviewing other arguments based upon claims of ex-parte communications, and illegal regulations the court concluded “In sum, the Court does not find clear and convincing evidence to hold Defendants in contempt of the December 22, 2017 Order.”

The California Supreme Court ruled that companies that want to classify their workers as independent contractors must prove the workers are running their own businesses. The ruling could help thousands of drivers for ride-hailing companies like Uber and Lyft, as well as other gig economy workers. The case is Dynamex Operations West vs. Superior Court,.

Dynamex is a nationwide same-day courier and delivery service that operates a number of business centers in California. Dynamex offers on-demand, same-day pickup and delivery services to the public generally and also has a number of large business customers – including Office Depot and Home Depot.

Prior to 2004, Dynamex classified its California drivers as employees and compensated them pursuant to this state’s wage and hour laws. In 2004, Dynamex converted all of its drivers to independent contractors after management concluded that such a conversion would generate economic savings for the company.

Under the current policy, all drivers are treated as independent contractors and are required to provide their own vehicles and pay for all of their transportation expenses, including fuel, tolls, vehicle maintenance, and vehicle liability insurance, as well as all taxes and workers’ compensation insurance.

Two individual delivery drivers, suing on their own behalf and on behalf of a class of allegedly similarly situated drivers, filed a complaint against Dynamex Operations West, Inc. alleging that Dynamex had misclassified its delivery drivers as independent contractors rather than employees.

After an earlier round of litigation in which the trial court’s initial order denying class certification was reversed by the Court of Appeal (Lee v. Dynamex, Inc. (2008) 166 Cal.App.4th 1325), the trial court ultimately certified a class action.

In response to the trial court’s later denial of Dynamex’s subsequent motion to decertify the class, Dynamex filed the current writ proceeding in the Court of Appeal which rejected its arguments.

Dynamex filed a petition for review in the Supreme Court, challenging only the Court of Appeal’s conclusion that the wage order definitions of “employ” and “employer” discussed in Martinez v. Combs (2010) 49 Cal.4th 35, 64, are applicable to the question whether a worker is properly considered an employee or an independent contractor for purposes of the obligations imposed by an applicable wage order.

The Supreme Court affirmed the Court of Appeal and concluded it is appropriate to look to a standard, commonly referred to as the “ABC” test, And it agreed that the standard for determining the employee or independent contractor question set forth in this court’s decision in Borello, (48 Cal.3d 341) is not the sole applicable standard.

Under this test, a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

The ABC test presumptively considers all workers to be employees, and permits workers to be classified as independent contractors only if the hiring business demonstrates that the worker in question satisfies each of three conditions.

The ruling did not address other issues, such as payment of work expenses, workers’ compensation and unemployment benefits, which are covered by separate laws.

An amended complaint naming additional drug firms believed to have helped fuel West Virginia’s opioid epidemic has been filed in federal court after attorneys for by Cabell County received drug distribution data from the federal government last week.

The drug-reporting database, ARCOS, is a comprehensive drug reporting system that monitors the flow of the DEA-controlled substances from the time they are created to when they get into the hands of patients. The data were ordered to be turned over to the case’s complainants under seal and none of the information has been made public.

Paul T. Farrell Jr., who is a co-leader in an opioid litigation case involving hundreds of cities nationwide that started in Cabell County, said the disclosure of this information, which includes 27 gigabyte of raw data, not only allows him to see the transactions between manufacturers and wholesalers, but also the transactions between the wholesalers and the pharmacies in Cabell County.

“We are going to be able to track pills and figure out how it is we got the volume of pills that came flooding into our hometown,” he said. “If this were the Daytona 500 … this is the green flag.”

The companies added in the amended complaint are seven manufacturers as well as companies associated with them, including Purdue Pharma, Actavis, Cephalon, Janssen, Endo, Insys Therapeutics and Mallinckrodt, because of their alleged improper marketing of the opioids they manufactured.

Although the Drug Enforcement Administration highly objected to releasing the information, plaintiffs in the national prescription opiate litigation won their request that ARCOS data for years 2006 to 2015 for any type of transactions involving the drugs oxycodone, hydrocodone, hydromorphone and fentanyl be made available to them for the litigation.

The documents and court orders relate to 500 civil complaints, according to Farrell, filed in federal courts across the nation alleging drug firms, manufacturers and distributors breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into West Virginia over the past several years – a duty the lawsuit claims companies had under the Controlled Substance Act of 1970.

Cabell County was among the first to file a lawsuit against the “Big Three” distributors -McKesson Corp., Cardinal Health and AmerisourceBergen Drug Corp., and several other pharmacy companies, which are named in a majority of the lawsuits.

The filings started in West Virginia after a 2016 Charleston Gazette-Mail investigation revealed similar data, stating between 2007 and 2012 that the “Big Three” shipped 423 million pain pills to West Virginia, which has about 1.8 million citizens, before the number of pills started to decrease.

The information Farrell and other plaintiffs’ attorneys have would expand on that data.

Some of that data could have been revealed Wednesday in seven amended complaints filed by Farrell, but Dan Polster, the U.S. district judge in Cleveland overseeing the case, agreed the complaints could be filed under seal, meaning out of the public’s view.

The motion to file under seal, filed by plaintiffs in the case, stated the seal was necessary to ensure compliance with previous court orders requiring the Drug Enforcement Administration drug-reporting database data to be sealed.

After receiving the DEA data last week, Farrell said he filed an order Wednesday amending the Cabell County civil complaint to include additional manufacturers and distributors they did not initially name due to the data not being made available.

A Modesto physician, Sawtantra Kumar Chopra, 71, was arrested and charged with prescribing opioids to patients outside the usual course of professional practice and not for a legitimate medical purpose.

On April 19, 2018, a federal grand jury in Fresno brought a 22-count indictment against Chopra. He was arrested at his home in Modesto.

According to the indictment, between March 2017 and March 2018, on 22 occasions Chopra prescribed highly addictive, commonly abused prescription drugs, including hydrocodone, alprazolam (Xanax), and Promethazine with codeine syrup – outside the usual course of professional practice and not for a legitimate medical purpose.

These controlled substances affect the central nervous system and may only be prescribed when medically required.

If convicted, Chopra faces a maximum statutory penalty of 20 years in prison. Any sentence, however, would 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 is Dr. Chopra’s second run-in with the law.

In 2002, he was charged with violating federal kickback law in the United States District Court, for the Eastern District of California. Prosecutors claimed he knowingly solicited and received kickbacks for referring some of his patients to Family Medical Home. He was paid $2,500 per month plus a percentage of Family Home profits. He also received basketball tickets to the Sacramento Kings games. On May 28, 2002 he plead guilty to the one count filed against him.

Disciplinary charges were filed against him by the California Medical Board on July 12, 2002 as a result of his conviction. He entered into a Stipulated Settlement and Disciplinary Order in May 2003.

This new case is the product of an investigation by the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse Drug Diversion Team, the Drug Enforcement Administration, the Federal Bureau of Investigation, and the IRS Criminal Investigation. Assistant U.S. Attorney Vincenza Rabenn is prosecuting the case.