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Late Payment Ends Employee Arbitration – Justice Wiley Dissents

On November 25, 2020, Dana Hohenshelt filed a complaint against his former employer Golden State Foods Corp.. She alleged four causes of action: retaliation under the California Fair Employment and Housing Act (FEHA); failure to prevent retaliation under FEHA; violation of Labor Code section 226, subdivision (c), failure to timely provide copies of wage statements; and violation of Labor Code section 1198.5, subdivision (b), failure to timely provide copies of personnel records.

Golden State moved to compel arbitration according to the parties’ arbitration agreement. On April 1, 2021, the trial court granted the motion and stayed court proceedings pending binding arbitration.

On August 3, 2021, arbitration commenced via Judicial Arbitration and Mediation Services (JAMS). An arbitrator was appointed on August 16, 2021. Per the arbitrator’s fee schedule, “All fees are due and payable in advance of services rendered.” On July 29, 2022 JAMS sent an invoice to Golden State for $32,300. On August 29, 2022, JAMS sent another invoice for $11,760. Both invoices were due to be paid within 30 days of their respective due dates; both invoices provide that payment is “due upon receipt.”

On September 30, 2022, JAMS sent a letter stating: “Pursuant to our fee and cancellation policy, all fees must be paid in full by October 28, 2022, or your [arbitration] hearing may be subject to cancellation.”

Later that same day, on September 30, 2022, Hohenshelt notified JAMS and the court that because Golden State did not pay within 30 days of the due date, he was “unilaterally elect[ing]” to withdraw his claims from arbitration and to proceed in court pursuant to Code of Civil Procedure section 1281.98, subdivision (b)(1).

On October 5, 2022, Golden State confirmed via email to Hohenshelt that “all outstanding fees have been paid in full.” On October 6, 2022, Hohenshelt filed a motion to lift the litigation stay pending arbitration.

On February 2, 2023, the court denied the motion. It deemed Golden State’s payment timely based on the September 30, 2022 letter providing a new due date of October 28, 2022 for payment. The court held that “the arbitrator seemingly set a new due date of October 28, 2022.”

The Court of Appeal granted Hohenshelt’s petition for writ of mandate and directed the trial court to vacate its order denying the motion to lift the stay of litigation and to enter an order lifting the stay in the published case of Hohenshelt v. Superior Court -B327524 (February 2024).

The trial court’s ruling was inconsistent with statutory mandate as well as recent appellate opinions. First, the trial court’s ruling ignored the clear language of Code of Civil Procedure.section 1281.98, subdivision (a)(2), which expressly provides that “[a]ny extension of time for the due date shall be agreed upon by all parties.” Here, there is no evidence that Hohenshelt agreed to any extension.

Secondly, the Second District Court of Appeal dealt with this exact same situation in Cvejic v. Skyview Capital, LLC (2023) 92 Cal.App.5th 1073. As did their colleagues in Gallo v. Wood Ranch USA, Inc. (2022) 81 Cal.App.5th 621.

“The same logic applies in the case before us. Golden State’s arbitration fees were due to be paid within 30 days of the two invoices.” Payment was not paid on time. “Section 1281.98 entitled Hohenshelt to withdraw from the arbitration. Section 1281.98 does not allow for any extension of time for the due date absent an agreement ‘by all parties.’ “

Golden State argues for the first time via its supplemental brief that section 1281.98 is preempted by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) and that the Court of Appeal should uphold the trial court’s order to allow the parties to return to arbitration.

The question of whether section 1281.98, as well as sections 1281.97 and 1281.99, are preempted by the FAA was addressed and answered in Gallo and followed thereafter by other courts. (See Suarez v. Superior Court (2024) 99 Cal.App.5th 32, 41-42; Espinoza v. Superior Court (2022) 83 Cal.App.5th 761, 783-784; De Leon v. Juanita’s Foods (2022) 85 Cal.App.5th 740, 753-754.)”

However, on this last point, Justice John Shepard Wiley Jr. wrote a dissenting opinion which began by noting “What preempts this statute is the decision to make arbitration the hostage of delay.”

“Delaying contract performance in bad faith is an odious tactic. Employers pursuing this tactic may deserve sanction. But sanctions like damages, a statutory fine of a motivating magnitude, and attorney fees would amply deter delay. Why abolish the arbitration itself?”

“One answer is that California state law disagrees, strongly and persistently, with federal law about whether arbitration is desirable.”

By again putting arbitration on the chopping block, this statute invites a seventh reprimand from the Supreme Court of the United States.

Recall the past six. Over and over again, with determined but unavailing persistence, the Supreme Court of the United States has rebuked California state law that continues to find new ways to disfavor arbitration.”

WCRI Publishes “Medical Cost Containment: A National Inventory, 2024”

With medical benefits representing the single largest cost component for many state workers’ compensation systems, the Workers Compensation Research Institute (WCRI) released a new study today that provides a basic understanding of the cost containment strategies used in all 50 states and 3 federal workers’ compensation programs as of January 1, 2024.

The study, Workers’ Compensation Medical Cost Containment: A National Inventory, 2024, includes tables of statutory provisions, administrative rules, and processes used by states, which come from surveys completed by state and federal administrators. One of the most popular tables compares fee schedule allowances for eight of the most common medical procedures (e.g., knee arthroscopy, lumbar surgery) in states that regulate fees. New to the report are more details about fee regulations for paying hospitals and ambulatory surgical centers.

The following are among the regulations that the study tracks:

– – ;Professional and facility fee regulations covering different providers
– – Limitation of some types of medical services
– – Choice of initial treating provider and change of provider regulations
– – Regulations covering managed care and use of treatment guidelines
– – Rules covering timely payments to providers, fines, and dispute resolution

“Medical cost containment strategies fall into the categories of price management and utilization management – with a goal of either curbing the cost of a particular service or reducing the number of services provided,” said Ramona Tanabe, president and CEO of WCRI. “Cost containment regulatory initiatives usually entail a balancing act of limiting the cost of services and inappropriate or unnecessary treatment without negatively affecting the quality of treatment or access to care for workers.”

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI’s diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand.

For more information on this study or to download a copy, visit the WCRI website. Karen Rothkin is the author of the study.

Two Former U.S. Marines and Nurse Practitioner Sentenced in $65M Fraud

Three members of a massive conspiracy to defraud the military’s healthcare program known as TRICARE out of more than $65 million have been sentenced in federal court.

Former U.S. Marines, Daniel Castro and Jeremy Syto, were sentenced to 21 months and 15 months, respectively; Nurse Practitioner Candace Craven was sentenced to serve three months in home confinement. Castro and Syto recruited fellow Marines to receive expensive compounded drugs; Craven and others wrote bogus prescriptions and filled out fraudulent paperwork to process the insurance reimbursements. All told, tens of millions of dollars in false claims were submitted; everyone got kickbacks.

All of the defendants were working for Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, who quarterbacked the scheme. Two weeks ago, Jimmy Collins received a 10-year prison sentence; Ashley Collins was sentenced to 18 months in home confinement. To account for all the fraud, the couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE.

According to plea agreements, the Marines who Castro and Syto recruited agreed to receive the pricey compounded medications in return for a monthly kickback of approximately $300. For young Marines-turned-straw-beneficiaries, this money significantly augmented their monthly paycheck. One defendant noted “it took very little work to sign people up to receive free money.”

For recruiting bogus patients, Castro and Syto were paid a commission – somewhere between 3 to7 percent of the total TRICARE reimbursement paid to the pharmacy for the drugs sent to their recruits. By the time this fraud scheme was in full swing, the average cost for these compounded drugs was more than $13,000 for a 30-day supply, peaking at around $25,000 for certain individual drugs. Over the course of the conspiracy, the illegal kickbacks amounted to at least $1,013,450.36 for Castro and $264,000 for Syto.

In total, TRICARE paid at least $11,949,710.15 in insurance reimbursements for compounded medications prescribed to straw beneficiaries directly recruited by Castro. During the same period, TRICARE paid at least $8,620,215.83 for compounded medications prescribed to straw beneficiaries directly recruited by Syto.

Nurse Practitioner Craven admitted that her primary role was to write and process fraudulent prescriptions and fill out other fraudulent paperwork for compounded drugs for the straw beneficiaries.

According to the pleadings, the sharp increase in the number of bogus prescriptions for compounded drugs was the result of multiple fraud schemes, including this one, that popped up around the country. As a result, the TRICARE program faced a $2 billion explosion in liability for compounded prescription drugs.

“This outrageous scheme undermined health services for those who risk their lives to serve our country,” said U.S. Attorney Tara McGrath. “Our military members and taxpayers deserve so much better. This case reflects our dedication to the well-being of our armed forces and our steadfast protection of the U.S. taxpayer.”

During the course of the investigation, authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud: an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.

Gig Hospitality Company to Reclassify Workers in $2.1M Agreement

Qwick Inc.,is an Arizona-based hospitality staffing company that has been operating in California since 2019. It has active markets in the Bay Area, Los Angeles, and San Diego. Through its mobile app, Qwick provides restaurants, caterers, and event production companies with on-demand workers to fill empty shifts. Qwick workers fill many different front-of-house and back-of-house roles, including shifts for servers, bussers, bartenders, baristas, dishwashers, cooks, barbacks, event staff, and concession workers. When Qwick workers fill a shift, they work alongside and perform the same functions as hotel and restaurant employees.

San Francisco City Attorney David Chiu announced that he has reached an agreement with Qwick that requires the company to convert all of its misclassified California workers to employees, ensuring they are eligible for the full range of employee benefits and protections. In 2023, Chiu sued Qwick, a gig economy company that provides on-demand staffing to the hospitality industry, for depriving workers of critical employment protections by misclassifying them as independent contractors instead of employees.

Qwick classified these workers as independent contractors, as though each waiter and dishwasher operated an independent business as a sole proprietor. As a result of this misclassification, Qwick’s workers were denied a wide range of state and local employee rights, including overtime pay, paid sick leave, heath care expenditures, and paid family leave.

In August 2023, the City Attorney’s Office’s Worker Protection Team filed a lawsuit to stop to these practices and recover civil penalties and restitution for workers who have been harmed. The lawsuit alleged that the misclassification of Qwick’s workforce violated a host of state and local labor laws and denied workers the protections, wages, and benefits guaranteed under law. In doing so, the City alleged Qwick gained an unfair business advantage over other law-abiding businesses, constituting a violation of California’s Unfair Competition Law.

Under the proposed judgment, Qwick must treat all of its existing and future California hospitality workers as employees, rather than independent contractors. Qwick will pay $1.5 million in restitution to thousands of hospitality workers who worked shifts for the company between 2019 and 2024. Additionally, Qwick is required to provide each converted employee a sick leave bank to be calculated based on the hours worked for Qwick between 2019 and the present day. Qwick must pay the City $250,000 in civil penalties to be used for the enforcement of consumer and worker protection laws. The judgment provides that the City Attorney’s Office will actively monitor Qwick’s compliance with the agreement through August 1, 2026, and the Court will retain permanent jurisdiction over Qwick’s obligation to treat its hospitality workers as employees. Qwick stipulated to this judgment after the City filed a motion requesting that the court issue a preliminary injunction against the company.

Anand Singh, president of the labor union Unite Here Local 2, said the settlement was “a huge victory for Qwick workers who are entitled to the same protections, wages, and benefits as their peers employed at hotels and restaurants.”

The company applauded the settlement. “We’re excited to announce that our California markets will be the first to experience our enhanced, compliance …. focused” model,” Dana Barbeau, Qwick’s chief people officer, said in a statement. “The future of work is evolving, and our goal is to lead that evolution by providing innovative opportunities that empower our freelancers.”

Former California legislator Lorna Gonzalez also weighed in on the lawsuit. Gonzalez had authored California’s AB 5 law aimed at getting tough on independent contractor misclassification. Gonzalez said the “settlement with Qwick embodies everything we want to see in enforcement efforts: a permanent injunction to reclassify workers as employees, restitution of wages to the workers and penalties to reimburse the costs of enforcement.”

The case is City and County of San Francisco and the People of the State of California v. Qwick Inc, San Francisco Superior Court, Case No. CGC-23-608756.

Exclusive Remedy Ends Injured Worker’s Lawsuit Against QME

Samreen Riaz began practicing dentistry in the Central Valley in approximately 2013. In 2018, she was terminated from a position of employment with Altura Centers for Health.

In January 2019, Riaz sued Altura for wrongful and retaliatory discharge. That same month, she obtained employment with Family HealthCare Network. Soon thereafter, Riaz was allegedly subjected to “whistleblower retaliation” in the form of a “[p]lanned organized covert stalking and harassment campaign” at Family HealthCare Network. The alleged mistreatment at Family HealthCare Network allegedly occurred because of plaintiff’s “whistleblowing” while employed at Altura, and due to her lawsuit against Altura, but the pleadings in her civil action do not otherwise explain the supposed connection between the two employers.

In March 2019 (about two months into her employment at Family HealthCare Network), Riaz began seeing a psychiatrist (Dr. Sievert) “due to ongoing stress related to [the] serious harassment campaign at work.” She sought and received treatment from Dr. Sievert in a “private capacity,” i.e., outside of the workers’ compensation process. According to plaintiff’s own allegations, Dr. Sievert diagnosed her with having “[d]elusional disorders.”

In approximately September 2019, Riaz sought workers’ compensation benefits for a psychiatric injury allegedly sustained “at work – due to unlawful covert harassment, discrimination and [r]etaliation.” Exhibits to the pleadings list the alleged date of injury as “9/24/19,” but the record is silent as to what occurred on that date.

Psychiatrist Micah Hoffman, M.D.acting in the capacity of a QME, evaluated Riaz and concluded her mental health issues were attributable to a “chronic psychotic illness, [which is] not industrial in nature in any way.” The QME findings and conclusions were documented in a 71-page QME report, which was later relied upon by a workers’ compensation administrative law judge (ALJ). The ALJ found there was no industrial causation for her claimed psychiatric injury.

Approximately three months after being evaluated by QME Micah Hoffman, M.D., in September 2020, Riaz underwent a psychological evaluation performed by Bradley A. Schuyler, Ph.D. This was done in connection with her lawsuit against Altura.

On December 15, 2021, Ruaz filed a pro se complaint against QME Micah Hoffman, M.D., in the Tulare Superior Court. The complaint purported to assert six causes of action labeled as follows: (1) “Medical Malpractice”; (2) “Unprofessional Conduct (Violation of Business and Professional [sic] Code)”; (3) “Professional Negligence”; (4) “Fraud and Misrepresentation”; (5) “Civil RICO 18 U.S.C. § 1964”; and (6) “Vicarious Liability.”

On February 18, 2022, defendant demurred to the complaint which was sustained with leave to amend. The same ruling was made to her second amended complaint, however the trial court sustained defendant’s third demurrer without leave to amend.

The Court of Appeal affirmed in the unpublished case of Riaz v Hoffman – -F085321 (February 2024)

Notwithstanding the issues of forfeiture and inadequate briefing, the Court of Appeal noted that “the trial court’s analysis appears correct.

In King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, the exclusivity rule was held to apply to claims against physicians who render services in the worker’s compensation utilization review process, “under which a [reviewing physician] assesses a treating physician’s recommendation according to a schedule that establishes uniform guidelines for evaluating treatment requests.” (Id. at p. 1047.)

If an alleged injury “arose out of and in the course of utilization review – a statutorily required part of the workers’ compensation claims process [-] to which [the claimant] would not have been subject had he [or she] not suffered a work-related …. injury,” related claims fall within the workers’ compensation exclusivity rule. (Id. at p. 1053.) In other words, “the workers’ compensation system provides the exclusive remedy for otherwise compensable injuries stemming from alleged mistakes in the utilization review process.” (Id. at p. 1060.)

As for the 12th cause of action (mislabeled as a second 11th cause of action in the operative pleading), the FEHA component of plaintiff’s disability claim is meritless since no employment relationship is alleged or suggested as between her and defendant.

Change Healthcare Cyberattack Disruption Continues for Sixth Day

UnitedHealth Group (UHG) is a multinational health insurance and services company based in Minnetonka, Minnesota. They are the largest health care company in the world by revenue and hold the 11th position globally in terms of total revenue.

Change Healthcare is a healthcare technology and business solutions company based in Nashville, Tennessee. They operate the largest financial and administrative information exchange in the United States, connecting payers, providers, and patients within the healthcare system.

Change Healthcare in 2022 merged with Optum, which is a major provider of services in technology, data, pharmacy care and direct health care. UnitedHealth Group acquired Change Healthcare in 2022 in a $13B transaction and is now its parent company.

A cyberattack which began on February 21st, disrupted several Change Healthcare systems and services, leading to a nationwide prescription processing outage and impacting healthcare providers across the country. UHG believes a state-sponsored threat actor is responsible for the attack.

As of today, Change Healthcare is still working to recover impacted applications, and no specific timeframe has been provided for full restoration.

The American Hospital Association (AHA) recommends that healthcare organizations using Change Healthcare services prepare for continued disruption and consider disconnecting from unavailable applications.

A report by SC Media says that security experts have warned for the past couple of days that the two flaws recently uncovered in ConnectWise’s ScreenConnect app could become the major cybersecurity story of 2024 – and that the healthcare and critical infrastructure sectors were especially vulnerable. They believe that the slowdowns at pharmacies was caused by a strain of LockBit malware that was used to exploit the vulnerabilities in ConnectWise ScreenConnect.

News of a cyberattack on the healthcare company broke on Feb. 21 when United Healthcare reported the incident in an 8-K filing with the Security Exchange Commission. In the filing, United Healthcare said they “identified a suspected nation-state associated cyber threat actor” had gained access to some of Change Healthcare’s IT systems.

Pharmacies across the country posted on Facebook last week that they’re still unable to process prescriptions due to the Change Healthcare outages. As of Monday, February 26 FastCompany reports that more than 100 health-related services were impacted by the attack, and there’s still no word on when things will be back to normal.

The Department of Health and Human Services said Wednesday ransomware and hacking are “the primary cyber-threats in health care.” In 2023, large healthcare breaches impacted more than 134 million people – up 141% from the year before – and hacking was the cause of 79% of breaches reported to the HHS Office of Civil Rights.

Healthcare breaches have become more common in the last five years, with breaches involving hacking and ransomware increasing more than 250% each, according to HHS. Last July, America’s largest healthcare system announced a security breach in which personal information like names and contact information were posted online and the breach impacted 11 million people across 20 states, according to HealthcareDive.

Despite the widespread disruption, including prescription delays and frozen services at numerous pharmacies across the United States, the media response to the news has been noticeably low-key.

February 19, 2024 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: One Call Accused of Using Interpreters With Fake Names & Badges. Whistleblower Cases Accuse Kaiser of Massive Billing Fraud. Quest Diagnostics Pays $5M for Illegal Hazardous Waste Disposal. Solana Beach Pharmaceutical Company Resolves Kickback Case for $750K. North Hills Family Arraigned in $192K Auto Insurance Fraud Scheme. Insurance Commissioner Publishes “First Wave” of Insurance Market Reforms. FTC and HHS Probe the Role of Pharmaceutical Middlemen. Cal/OSHA Toughens Rules On Workplace Lead Exposure. FDA Grants Priority Review of Psychedelic Drug for PTSD. APCIA Announces Award Winners Among 2024 Class of Emerging Leaders.

Fake Doctor Attempts to Open New Practice 2 Weeks After Prison Release

An Anaheim man who plead guilty to multiple felonies for impersonating a medical doctor and performing medical procedures including Botox injections, lip and face fillers, and thread-lift procedures on numerous unsuspecting victims has been charged with attempting to start another Botox and thread lift business less than two weeks after he was released from prison.

The fake doctor targeted Spanish-speaking women to perform the unlicensed procedures.

Elias Segoviano, 63, of Brea, pleaded guilty in April 2023 to 13 felony counts of the unauthorized practice of medicine, one felony count of false indication of a medical license, and one felony count of perjury. He also pled guilty to one misdemeanor count of misrepresenting himself as a licensed medical practitioner, one misdemeanor count of representation of license not issued to him or her, one misdemeanor count of misrepresentation of qualifications, and one misdemeanor count of impersonating a professional nurse or pretending to be licensed to practice nursing.

Segoviano was arrested on July 19, 2022 at his business, Botox in Anaheim, within the Phenix Salon Suites, located at 935 S. Brookhurst St. in Anaheim, California. Segoviano used various social media platforms to advertise his services to potential clients, including videos and postings on Facebook, Tiktok, and other social media platforms.  Segoviano used various aliases including “Dr. Elias”, “Dr. Elias Renteria”, “Dr. Elias Renteria M.D.” and used “ELIASMD” on his vehicle license plate.

Segoviano is believed to have utilized other locations for his unlawful medical practice since 2019 including 339 La Habra Blvd, La Habra, CA.  Various business names were used for his unlicensed practice including “Botox in Anaheim,” “Botox in Anaheim- Health and Beauty,” “Neurotoxina Botulinica- Massage Service,” “Threads in Anaheim, -Threads La Habra”, “Botox La Habra,” and “OC Threads, Botox & Fillers.”

Segoviano admitted performing invasive procedures and injecting victims with potentially counterfeit Botox, fillers, anesthetics, and other medical drugs that placed the public at extreme risk.

The charges involved the illegal practice of medicine involving 28 victims. He was sentenced to four years in state prison, but served just one year and four months before being released on December 22, 2023.

Less than two weeks later, on January 4, 2024, while on Post-Release Community Supervision following his release from prison, Segoviano is accused of attempting to sublet a space at the Phenix Salon in Brea. He also applied for a business license in the city of Brea, but his application was rejected.  Based on a tip from the Probation Department about Segoviano’s attempt to rent the space in Brea, investigators with the Orange County District Attorney’s Office immediately opened an investigation.  OCDA investigators interviewed multiple witnesses and located the rejected business license application, substantiating the charges filed in this case.

Segoviano is accused of providing the two suite owners with a fake name and stating that he performs Botox injections and face thread lifting procedures, both of which require valid medical authorizations which Segoviano doesn’t have.

One of the suite owners initially entered into a sublease agreement with Segoviano, but after learning of news coverage about his prior criminal conduct the owner cancelled the agreement and demanded the keys be returned.

Segoviano has been charged with two felony counts of the unauthorized practice of medicine and one misdemeanor count of falsely representing himself as a licensed medical practitioner.

“This man walked the walk and talked the talk of being a licensed medical professional, but he was anything but what he pretended to be,” said Orange County District Attorney Todd Spitzer. “These women trusted this individual to have the training and the expertise required to perform these medical procedures, and instead they unknowingly put their very lives in the hands of someone who was never licensed to perform the kind of work he was doing. The fact that he was out of prison less than two weeks – and while under supervision – when he returned right back to a life of crime makes it painfully obvious that he has no intention of changing his behavior and he will continue to try to make money off unsuspecting women every chance that he gets.”

Anyone who was treated by Elias Renteria Segoviano is encouraged to report those procedures to the Orange County District Attorney’s Bureau of Investigation by contacting Investigator Jesse Alfonzo at 714-834-6538.

Deputy District Attorney Michael Chay of the Consumer and Environmental Protection Unit is prosecuting this case.

UCSF Launches Comprehensive Study of Long COVID

UC San Francisco will launch the world’s first tissue bank with samples donated by patients with long COVID. The move follows research indicating that the virus can continue to linger throughout the body and may hold the key to understanding the cause of the debilitating disorder and lead to effective treatments.

By October 2023, an estimated 14% of Americans had or had had long COVID, according to the Centers for Disease Control and Prevention. The disorder may appear as a continuation of the original COVID symptoms or manifest as new symptoms affecting any part of the body. In serious cases multiple body systems are affected, including the brain, heart, lungs, kidneys and skin.

Recent studies have shown that in patients with long COVID, the SARS-CoV-2 virus may not fully clear after the initial infection. Instead, the virus remains in what scientists have termed “viral reservoirs,” identified in patient tissue months or even years later. These reservoirs are now believed to be a primary driver of long COVID, provoking the immune system to respond by prompting conditions like blood clotting disorders and inflammation and cognition dysfunction.

“Based on our work so far, we believe that long COVID is a tissue-based disease,” said Michael Peluso, MD, principal investigator of the UCSF Long COVID Tissue Program and an infectious disease physician-scientist in the UCSF School of Medicine.

“This program will allow us to comprehensively study the biological processes occurring across tissue compartments – in the blood, gut, lymph nodes, spinal fluid and bone marrow – in people living with long COVID. This will help us better understand the underlying mechanisms of long COVID,” said Peluso, who co-led recent research with Timothy Hendrich, MD, a UCSF physician-scientist, that showed the virus was present in colon tissue up to 676 days following infection.

Tissue specimens will be acquired from existing and future participants enrolled in UCSF’s LIINC study, and shared with non-UCSF scientists conducting complementary research. The study, which was launched in April 2020 before long COVID was recognized, is open to all adults who have ever tested positive for COVID-19.

“The persistence of SARS-CoV-2 in tissue is a major target for our rapid research and clinical trials,” said Steven Deeks, MD, co-principal investigator of LIINC, professor of medicine in residence at UCSF and an internationally recognized HIV expert. Current clinical trials include a monoclonal antibody – a lab-made protein that effectively attacks viruses – and an antiviral therapy that blocks viral replication.

The UCSF Long COVID Tissue Program is supported by a $3 million grant from the Long Covid Research Consortium of the PolyBio Research Foundation, a nonprofit dedicated to complex chronic conditions, which also funded for the LIINC study.

“The UCSF team includes people who helped make HIV and AIDS a treatable disease,” said Amy Proal, PhD, president of PolyBio. “These researchers rapidly pivoted into long COVID research at the outset of the pandemic, leveraging years of experience performing similar research with patients with HIV and AIDS.”

An additional $1.7 million funding from PolyBio will also enable Henrich, and UCSF cardiologist Zian Tseng, MD, to expand their study of sudden cardiac death. Advanced technologies will be used to examine traces of SARS-CoV-2 and related immune changes in tissue samples. Findings may result in recommendations for antiviral treatments for patients who have been exposed to the COVID virus and are at risk for sudden cardiac death.

Injured Worker’s $8.2M Verdict Against Alleged Employer Reversed

Edward Younan began working in the food truck business in 1975 as a driver. He and his wife eventually owned between 50 and 60 trucks. Younan acquired Avalon Foods, Inc, a food truck commissary, in 1999.

Food trucks are required to park at a “certified commissary,” such as Avalon, and Avalon charges its customers for “housing space” (i.e., a parking spot), electricity, security, and ice. At the time of trial, Avalon owned only “maybe a couple” food trucks, which were not usually on the road, but served as spares.

Jorge GuzmanJr. began working on food trucks in approximately 1992. He was the driver and cashier. His job duties included “driv[ing to] the stops where they go, sell[ing] food, . . . tak[ing] the money, get[ting] change” and “driv[ing] to the next stop.”

At the time of the accident, Guzman drove a food truck owned by Philma Alvarez. Philma parked her trucks at Avalon during the relevant time period.

On January 11, 2014, after the truck completed its business at one of its stops, the cook on the truck asked Guzman to retrieve a table from outside. When Guzman stepped outside, a car hit him, resulting in serious injuries.

Following the accident, Guzman filed a civil complaint against Philma and Hector Chavez. Guzman later named Avalon and Younan as defendants. The operative complaint alleged that, on January 11, 2014, while Guzman was employed by “defendants,” “[t]he employee manager negligently instructed [Guzman] to retrieve a serving table in a manner that subjected [Guzman] to extreme danger of, and resulted in, [Guzman] being struck by a car and severely injured.”

Guzman brought the lawsuit under Labor Code section 3706, which permits an injured employee to file a civil complaint for damages against an employer who “fails to secure the payment of compensation” to the injured employee. Avalon and Younan answered the complaint, and, as relevant here, asserted no employment relationship existed between them and Guzman.

At the close of plaintiff’s case-in-chief, defendants orally moved for nonsuit and the court took the motion “under advisement”. On October 24, 2019, the jury returned a verdict finding both Younan and Avalon were Guzman’s employers at the time of the accident. Phase 2 of the trial was for damages, and a second jury awarded Guzman $8,245,034.00. Following trial, Avalon and Younan moved for JNOV and a new trial, and the trial court denied the JNOV, and granted a new trial on allocation of damages between defendants.

The Court of Appeal reversed the order denying Avalon and Younan’s JNOV motion, and direct the trial court to enter judgment in favor of Avalon and Younan in the unpublished case of Guzman v Younan -B317573 (February 2024).

During trial, Guzman repeatedly and unambiguously testified he worked exclusively for Philma at the time of the accident. For example, in response to defendants’ counsel’s question, “But you stopped ” at least your testimony is you stopped working for [Younan] in 2013 and worked exclusively with Philma, is that not correct?” Guzman replied that was correct. Guzman testified that, before the accident, in 2013, he worked for Younan doing the “same thing I did with Philma.”

When Guzman worked for Philma at the end of 2013 through the time of his injury in 2014, Philma told Guzman what to do and where to go. If the truck broke down, or Guzman was sick and he could not work, he called Philma. Neither Avalon nor Younan paid Guzman when he worked for Philma, and he never reported to anyone at Avalon while working for Philma. Guzman further testified that he did not wear a uniform when he worked for Philma, but when he worked for Younan he was required to wear a shirt Younan provided him.

The Court of Appeal concluded that “the record contains no evidence that Guzman was employed by Avalon or Younan on the date of the accident; rather, the evidence merely demonstrates that Guzman may have driven a truck for Avalon and Younan at some point in 2013, before the accident occurred.”