Category: Daily News

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.

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.

On September 25, 2019, at a Trader Joe’s store where Ortiz and her brother, Noe Ortiz, were employed, Noe was knocked to the ground when another employee, Alex Salas, slammed a U-boat cart loaded with produce into Noe’s flatbed cart.

Noe appeared visibly injured and upset, though he stated he was okay. Ortiz expressed concern about the incident to a supervisor, who allegedly disciplined her verbally and told her to mind her own business. Ortiz was terminated a few days later for purportedly unprofessional conduct, which she claimed was pretextual retaliation for reporting unsafe workplace conditions.

Ortiz filed a lawsuit alleging breach of contract, tortious breach of the implied covenant of good faith and fair dealing, retaliation under Labor Code section 6310 (prohibiting discharge for reporting work-related injuries or unsafe conditions), and wrongful termination in violation of public policy based on Labor Code § 6310 and 132a (barring retaliation for workers’ compensation claims).

Trader Joe’s demurred to the contract and implied covenant claims and the trial court sustained the demurrer without leave to amend as to the implied covenant claim but overruled it as to the breach of contract claim. Ortiz did not appear at the demurrer hearing, and the record on appeal lacked a transcript or the court’s written ruling on this matter.

Trader Joe’s subsequently moved for summary judgment on the remaining claims, arguing that Ortiz could not establish protected activity under Labor Code § 6310, as there was no evidence of a work-related injury to Noe (e.g., no broken bones, medical treatment, or workers’ compensation claim) or an unsafe working condition (the incident was described as an isolated accident without malice or prior similar occurrences).

Trader Joe’s also presented evidence that Ortiz was terminated for repeated violations of its Crew Member Conduct Policy, including prior performance reviews documenting unprofessional behavior and a statement from Salas describing Ortiz’s combative response to him. Additionally, Trader Joe’s contended that Ortiz was an at-will employee, defeating her breach of contract claim, and that there was no link between her 2012 workers’ compensation application and her 2019 termination, undermining her Labor Code § 132a-based claim.

Ortiz opposed the motion focusing on her retaliation claim and submitting a declaration asserting that Noe appeared hurt, that she reported the incident because he was injured, and that it involved unsafe work practices. Following a hearing, the trial court granted summary judgment finding no triable issues: no evidence of injury or unsafe conditions under Labor Code § 6310, at-will employment status barring the contract claim, and no retaliation linked to section 132a.

On appeal, Ortiz challenged the demurrer ruling on her implied covenant claim and the summary judgment grant. The judgment was affirmed by the Court of Appeal in the unpublished case of Ortiz v. Trader Joe’s Co., -B329657.PDF (October 2025).The opinion emphasized that isolated accidents without harm or systemic risks do not constitute protected reports under Labor Code § 6310.

The appellate court held that Ortiz forfeited her demurrer challenge due to an inadequate record (lacking the trial court’s ruling or hearing transcript) and insufficient briefing, which failed to articulate the claim’s elements or explain why the allegations sufficed, violating California Rules of Court and established precedents emphasizing the appellant’s burden to provide reasoned argument and authority.

“[I]t is a fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment.” (Jameson v. Desta (2018) 5 Cal.5th 594, 608–609 (Jameson).) “ ‘ “A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed.” ’ ” [Citation.] ‘Consequently, [the appellant] has the burden of providing an adequate record.’ ” (Id. at p. 609.)

Regarding summary judgment, reviewed de novo, the court applied the McDonnell Douglas burden-shifting framework to Ortiz’s Labor Code § 6310 retaliation claim, requiring a prima facie showing of protected activity, adverse action, and causation.

Trader Joe’s met its initial burden by citing Ortiz’s deposition testimony confirming no injury (e.g., no medical treatment or lost time) and describing the incident as an isolated accident. The burden then shifted to Ortiz, who failed to raise a triable issue. Her declaration was deemed speculative, conclusory, and self-serving, contradicted by her own testimony and other evidence (e.g., Noe’s statement that he was “good,” and no corroboration of injury).

The court interpreted “work-related injury” under Labor Code § 6310 by analogy to reportable occupational injuries under section Labor Code § 6409.1, requiring lost time or medical treatment beyond first-aid criteria unmet here.

Similarly, no evidence supported a reasonable belief in an unsafe working condition or practice. As Ortiz’s wrongful termination claim depended on violations of Labor Code § 6310 or 132a, it failed accordingly.

The California Department of Insurance will conduct a prenotice public discussion regarding contemplated adoption of California Code of Regulations, Title 10, Chapter 5, Subchapter 3, Article 4.7 (commencing with section 2319.7). The proposed regulations aim to clarify the information related to emerging risks faced by insurance companies that the Department will consider during future financial examinations.

Participation in this prenotice public discussion will be in addition to, and not in substitution for, any participation in any formal rulemaking process that may follow. This invitation to the prenotice public discussion does not constitute a Notice of Proposed Action. Consequently, comments (oral or written) received in connection with these prenotice public discussions will not be included in any record of rulemaking that may follow. Similarly, the Department is not required to respond to comments received in connection with the prenotice public discussion. For this reason, if you wish to have comments included in any rulemaking file that may follow, or if you wish for the Department to respond to your comments as part of the process by which it adopts this regulation, you must present your comments during the public comment period according to the procedures outlined in any Notice of Proposed Action.

To increase public participation and improve the quality of regulations, interested parties are invited to attend the virtual meeting and offer comment, if they so choose. In connection with this prenotice public discussion, the Department hereby seeks public input regarding alternatives to the contemplated regulations.

This meeting is scheduled for November 14, 2025 at 10:30 a.m. The virtual workshop shall continue until all in attendance wishing to provide comments have commented, or 12:00 p.m., whichever is earlier. The link to register for the Web-based Virtual Format is https://us06web.zoom.us/webinar/register/WN_8L5R7ixrQK-e5QiKOTReig. Other methods of submitting comments are contained in the Prenotice Public Discussion Invitation.

The Long-Term Solvency Regulation aligns with the Commissioner’s work as a member of the International Association of Insurance Supervisors (IAIS), where he contributed to the development of guidance for insurance supervisors on climate risks, as well as various reports and standards. The regulation focuses on solvency strategies and leverages the growing implementation of standardized climate risk disclosures by regulators worldwide, alongside UN-led efforts to establish the Principles for Sustainable Insurance and the Sustainable Development Goals.

Topics of Interest Include:

– – Using global tools to safeguard Californians: Financial regulators from the Banque de France, the Bank of England, the Bank of the Netherlands, Canada’s chief insurance regulator, and the Monetary Authority of Singapore have participated in scenario analysis exercises. This presents an opportunity for enhanced collaboration among regulators to promote sustainability in insurance markets and to develop frameworks for addressing emerging risks. As the largest sub-national insurance market in the world, California’s regulator must actively engage and secure a seat at the table in global discussions on long-term risk analysis and solvency.

– – Robust financial oversight is essential for the security of Californians: The Department of Insurance supervises California-based insurance companies to ensure their stability and capacity to meet future obligations. According to the draft regulatory text released today, these companies must provide information to the Department to strengthen consumer protection against unforeseen challenges. Over the past three years, The Commissioner has contributed to the technical guidance of the IAIS climate risk framework, which has informed this proposed regulation as well as existing regulations in Europe for the banking industry.

– – New information on impact of climate and technology: Insurance companies are significant institutional investors in the U.S., with approximately $8.2 trillion in assets reported in 2022. Their investment performance directly influences their capacity to underwrite new policies. The Long-Term Solvency Regulation requires documentation of risks and opportunities projected for 2030, 2040, and 2050, which could impact underwriting, investments, or operations.

– – Addressing cybersecurity and artificial intelligence: The regulation will also address the evolving landscape of cybersecurity, focusing on data quality, the use of large datasets, and artificial intelligence.

– – Mitigating catastrophic risk: Companies will be required to share information on strategies to mitigate climate-related risks, such as extreme weather patterns and gradual market shifts expected to become pronounced by 2050. These risks include sea-level rise, changes in land use, and variations in water availability and agricultural productivity.

– – Enhancing stability amid transitions: The regulation will require information on transition risks associated with new technologies, particularly regarding the reduction of reliance on greenhouse gas-emitting technologies. Central to this effort are “stress tests” of climate risk scenarios for 2030, 2040, and 2050.

“Scenario analysis is a critical risk management tool for navigating uncertainty,” said Dr. Sean Carmody, Executive Director, Policy and Advice Division of the Australian Prudential Regulation Authority, the country’s insurance regulator. “It helps institutions anticipate and prepare for emerging risks—such as the impact of a changing climate and rapid technological innovation—by exploring a range of plausible futures and identifying areas of vulnerability and strategies that can strengthen resilience in the financial system.”

Darren Gilbert, who had lost part of his left leg and some toes on his right foot, relied on a prosthetic leg and wheelchair to get around. In August 2021, he pulled his wheelchair-accessible van into a 7-Eleven in Rio Linda, California.

The van-accessible parking spot was taken, so he parked in a regular space, climbed out on his prosthetic, and made his way across the lot. The curb ramp to the sidewalk was steep and uneven; he struggled to keep his balance and felt exhausted by the effort just to reach the door. Inside, he bought a few items and left.

Two months later, Gilbert sued 7-Eleven under the Americans with Disabilities Act (ADA) and California’s Unruh Civil Rights Act. He claimed the store’s parking lot and entryway violated federal accessibility standards and denied him equal access because of his disability. He wanted the barriers fixed and statutory damages under state law.

While the case was pending, 7-Eleven quietly remodeled the parking lot and entrance. By the time the case went to trial, the store had a fully compliant van-accessible stall, access aisle, curb ramp, and walkway.

The district judge ruled that the ADA claim for an injunction was now moot – there was nothing left to fix. But the violations had existed when Gilbert visited, and because any ADA violation automatically triggers liability under the Unruh Act, the judge awarded Gilbert $4,000 in statutory damages.

7-Eleven appealed, making three main arguments.First, it said Gilbert hadn’t proven that removing the barriers was “readily achievable” under the ADA – after all, he hadn’t submitted cost estimates or design plans. The Ninth Circuit disagreed. Yes, plaintiffs typically have to propose a plausible fix whose benefits seem to outweigh the costs. But 7-Eleven had already fixed everything voluntarily, without claiming it was burdensome. That alone proved removal was feasible. The company could not meet its own burden to show otherwise.

Secondly, 7-Eleven argued that Gilbert needed to prove his experience was worse than an able-bodied person’s – that the barriers affected him specifically because of his disability. The court rejected that argument also. If a physical barrier violates the ADA’s technical standards and relates to the plaintiff’s type of disability (here, mobility impairment), and the plaintiff personally encounters it, that’s discrimination. No side-by-side comparison is required.

Finally, 7-Eleven attacked Gilbert’s standing under the Unruh Act. The district judge had found that Gilbert’s real reason for visiting was to build a lawsuit – he’d filed about 70 similar cases – and that his purchase was just a pretext. 7-Eleven insisted that without a “bona fide” intent to be a genuine customer, he could not recover.

The Ninth Circuit Court of Appeals affirmed the district court’s award of statutory damages for Gilbert’s claim that 7-Eleven violated § 51(f) of the Unruh Act in the published case of Gilbert v. 7-Eleven, Inc. 23-4045 (October 2025).

California law is clear: if you walk (or roll) into a store, encounter discrimination, and transact business, you have been injured under the Unruh Act. Motivation to sue is irrelevant. The California Supreme Court had already said so in earlier cases: even “professional plaintiffs” who pay a discriminatory fee or face a real barrier have standing. And for construction-related accessibility claims like this one, state law spells out exactly what’s needed: personal encounter plus some difficulty, discomfort, or embarrassment. Intent to return or shop again is not on the list.

The court distinguished a recent California Supreme Court case involving online terms of service in White v. Square, Inc., 7 Cal.5th 1019 (2019) 250 Cal.Rptr.3d 770 446 P.3d 276, where intent did matter – because the plaintiff never transacted at all. Here, Gilbert bought something from the store at the time of his visit. That was enough.

Darren Gilbert passed away in July 2024, before the appeal was decided. His successors stepped in. The Ninth Circuit affirmed the $4,000 award in full and sent the case back only to sort out the substitution formalities.

In the end, a voluntary fix helped prove the violation, a completed purchase established standing, and a litigation motive changed nothing. The barriers were real, the injury was personal, and California law demanded accountability.