Category: Daily News

Twanda Bailey began working at the District Attorney’s Office in 2001 as a clerk in the records department. The office promoted her in 2011 to an investigative assistant position. Bailey worked alongside Saras Larkin, another investigative assistant. The two sat next to each other in the records room. Bailey is African-American. Larkin is Fijian/East Indian.

On January 22, 2015, while in the records room, Larkin told Bailey that she saw a mouse run under Bailey’s desk. Bailey was startled and jumped out of her chair. Larkin walked up to Bailey and quietly said, “You [N-words] is so scary.” Immediately following this incident, Bailey left her office and told three coworkers what Larkin had said. Bailey was crying and upset. Although Bailey was offended by Larkin’s use of the racial slur, she did not immediately complain to human resources because she feared harassment and retaliation.

This fear was based on Bailey’s understanding that other employees had been harassed and discriminated against following incidents with Larkin. Specifically, Bailey understood that Larkin was best friends with the office’s department personnel officer, Evette Taylor-Monachino, and that Larkin’s actions against other African-American women, Davonne Mark and Sydney Fisher, caused them to be reassigned or to separate from the District Attorney’s Office. In a declaration, Mark attested to the close friendship between Taylor-Monachino and Larkin. Mark had worked in the records room with Bailey and Larkin but stated that she was reassigned after Larkin made false accusations against her.

Nontheless, information about the event was relayed to Sheila Arcelona, the assistant chief of finance and administration. Arcelona and Taylor-Monachino met with Bailey on January 29. Bailey reiterated that Larkin had used an offensive racial slur and confirmed that this was the only time she had heard Larkin use such language. Arcelona informed Bailey that “management would address the issue” and that Bailey should report any inappropriate behavior directly to management.

Arcelona and Taylor-Monachino then met with Larkin, who “did not admit to making the alleged remark.” Arcelona counseled Larkin on the city’s “Harassment-Free Workplace Policy” and informed her that use of the alleged language was “unacceptable.”

Although Taylor-Monachino was the HR representative charged with reporting incidents of workplace harassment to the city’s Department of Human Resources (DHR), she did not file a formal complaint as city policy required. Bailey claimed that that Taylor-Monachino’s conduct towards her had changed after March 23. As a result, Bailey felt she needed to avoid walking past Taylor-Monachino’s office, which was next to the records room where Bailey worked.

On December 30, Bailey filed suit against the City for racial discrimination, racial harassment, retaliation, and failure to prevent discrimination in violation of FEHA. The City moved for summary judgment and the trial court granted that motion and concluded that no trier of fact could find severe or pervasive racial harassment based on being “called a ‘[N-word]’ by a co-worker on one occasion.” In an unpublished opinion, the Court of Appeal affirmed the trial court’s grant of summary judgment. (Bailey v. San Francisco District Attorney’s Office (Sept. 16, 2020, A153520) [nonpub. opn.], as mod. on denial of rehg. Oct. 6, 2020) The California Supreme Court granted review.

The California Supreme Court reversed the judgment of the Court of Appeal in the case of Bailey v. S.F. Dist. Attorney’s Office -S265223 (July 2024)

To prevail on a claim that a workplace is racially hostile under FEHA, an employee must show she was subjected to harassing conduct that was (1) unwelcome; (2) because of race; and (3) sufficiently severe or pervasive to alter the conditions of her employment and create an abusive work environment.. The parties did not dispute that Larkin’s conduct was unwelcome and because of race. The case therefore considered its severity and the City’s liability.

The standard for workplace harassment claims strikes a “middle path between making actionable any conduct that is merely offensive and requiring the conduct to cause a tangible psychological injury.” (Harris v. Forklift Systems, Inc. (1993) 510 U.S. 17, 21 (Harris).) The United States Supreme Court has held: “Conduct that is not severe or pervasive enough to create an objectively hostile or abusive work environment – an environment that a reasonable person would find hostile or abusive – is beyond Title VII’s purview.”

The Court also noted that the “same standard applies to FEHA. (See Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 130 (plur. opn. of George, C. J.)  ; Miller v. Department of Corrections (2005) 36 Cal.4th 446, 462.)” Whether a work environment is reasonably perceived as hostile or abusive “is not, and by its nature cannot be, a mathematically precise test.” (Harris, supra, 510 U.S. at p. 22.) “The working environment must be evaluated in light of the totality of the circumstances.”

The City argued that “[a] single race-based comment by a coworker – even when involving a categorically offensive and impermissible term – over a fourteen year period” can be considered neither “pervasive” nor “severe.” Bailey responded that, under prevailing FEHA principles and standards, the Court of Appeal’s holding “that a co-worker’s, as opposed to a supervisor’s, one-time infliction of [a] slur is categorically non-actionable under FEHA . . . is neither compelled nor warranted.” The California Supreme Court agreed with Bailey that “that the Court of Appeal placed undue emphasis on the speaker’s status as a coworker.” Instead it said the “objective severity of harassment should be judged from the perspective of a reasonable person in the plaintiff’s position.”

“This standard allows that ‘an isolated incident of harassment, if extremely serious, can create a hostile work environment.‘ (Boyer-Liberto v. Fontainebleau Corp. (4th Cir. 2015) 786 F.3d 264, at p. 268, citing Faragher v. Boca Raton (1998) 524 U.S. 775 at p. 788; see U.S. Equal Employment Opportunity Commission, Section 15: Race & Color Discrimination (Apr. 19, 2006) 15-VII Equal Opportunity for Job Success, p. 15-37 (EEOC Compliance Manual) [‘a single, extremely serious incident of harassment may be sufficient to constitute a Title VII violation’]; ibid. [‘The more severe the harassment, the less pervasive it needs to be, and vice versa’].).”

The California Supreme Court when on to say in this Opinion “We join the chorus of other courts in acknowledging the odious and injurious nature of the N-word in particular, as well as other unambiguous racial epithets.” “Far from ‘a mere offensive utterance” (Harris, supra, 510 U.S. at p. 23), this slur may be intrinsically ‘humiliating’ depending on the totality of the circumstances (ibid.).”

“We therefore reverse the judgment of the Court of Appeal and remand the cause to that court for further proceedings consistent with this opinion.”

The California Supreme Court ruled last week that app-based ride-hailing and delivery services like Uber and Lyft can continue treating their drivers as independent contractors rather than employees. The unanimous decision by the state’s top court is a big win for tech giants.

In 2019, the Legislature enacted Assembly Bill No. 5 to address what it claimed was the misclassification of workers as independent contractors. Assembly Bill 5 took effect in January 2020. In October 2020, the Court of Appeal in People v. Uber Technologies, Inc. (2020) 56 Cal.App.5th 266, 273, prohibited Uber and Lyft from misclassifying their drivers as independent contractors under Assembly Bill 5.

In November 2020, Protect App-Based Drivers and Services supported Davis White and Keith Yandell in placing Proposition 22 on the general election ballot. Proposition 22 states that its purposes are to “protect the basic legal right of Californians to choose to work as independent contractors with rideshare and delivery network companies,” “protect the individual right of every app-based rideshare and delivery driver to have the flexibility to set their own hours for when, where, and how they work,” and “require rideshare and delivery network companies to offer new protections and benefits for app-based rideshare and delivery drivers, including minimum compensation levels, insurance to cover on-the-job injuries, automobile accident insurance, health care subsidies for qualifying drivers, protection against harassment and discrimination, and mandatory contractual rights and appeal processes.”

Proposition 22 passed with the support of 58.6 percent of the voters and enacted sections 7448 to 7467 of the Business and Professions Code.

Shortly afterwards, Hector Castellanos, Joseph Delgado, Saori Okawa, Michael Robinson, Service Employees International Union California State Council, and Service Employees International Union filed a petition for writ of mandate seeking a declaration that Proposition 22 is invalid because it violates the California Constitution.

The trial court granted the petition, ruling that the proposition (1) is invalid in its entirety because it intrudes on the Legislature’s exclusive authority to create workers’ compensation laws; (2) is invalid to the extent that it limits the Legislature’s authority to enact legislation that would not constitute an amendment to Proposition 22, and (3) is invalid in its entirety because it violates the single-subject rule for initiative statutes.

Proposition 22’s proponents and the state appealed, arguing the trial court was mistaken on all three points.

The Court of Appeal in a divided opinion agreed that Proposition 22 does not intrude on the Legislature’s workers’ compensation authority or violate the single-subject rule. But it concluded that the initiative’s definition of what constitutes an amendment violates separation of powers principles. Because the unconstitutional provisions can be severed from the rest of the initiative, it affirmed the judgment insofar as it declares those provisions invalid and to the extent the trial court retained jurisdiction to consider an award of attorney’s fees, and otherwise reversed in the published case of Castellanos v. State of California – A163655 (March 2023).

The California Supreme Court agreed to review the case limited to the issue to be argued and briefed as follows: “Does Business and Professions Code section 7451, which was enacted by Proposition 22 (the ‘Protect App-Based Drivers and Services Act’), conflict with article XIV, section 4 of the California Constitution and therefore require that Proposition 22, by its own terms, be deemed invalid in its entirety?”

The California Supreme Court affirmed the judgment of the Court of Appeal insofar as it held that Business and Professions Code section 7451 does not conflict with article XIV, section 4 of the California Constitution in the case of Castellanos et al. v. State of California et al. – S279622 (July 2024).

Under section 7465, the Legislature may amend provisions of Proposition 22 other than section 7451 as long as such an amendment “is consistent with, and furthers the purpose of, this chapter” and obtains a seven-eighths majority vote in each house of the Legislature. Plaintiffs and the Attorney General contend that section 7465’s supermajority requirement may conflict with article XIV, section 4 of the California Constitution

“We reserve these issues until we are presented with an actual challenge to an act of the Legislature providing workers’ compensation to app-based drivers. To resolve the question presented, it suffices to conclude that section 7451 does not itself restrict the Legislature’s authority to enact workers’ compensation legislation or otherwise conflict with article XIV, section 4.”

Admera Health LLC has agreed to pay the United States $5,389,648 to resolve allegations that it violated the False Claims Act by paying commissions to third party independent contractor marketers in violation of the Anti-Kickback Statute (AKS). Admera will pay an additional $147,851 to individual states for claims paid to Admera by state Medicaid programs.

Admera is a New Jersey-based company that provides biopharmaceutical research services for health care institutions and provided clinical laboratory testing services to health care providers relating to pharmacogenetics until 2021. Pharmacogenetics analyzes how a patient’s genetic attributes affect their response to therapeutic drugs.

The settlement resolves allegations that, from Sept. 1, 2014, through May 21, 2021, Admera made commission-based payments to independent contractor marketers in return for recommending or arranging for the ordering of genetic testing services in violation of the AKS. The AKS prohibits offering or paying remuneration in return for arranging or recommending items or services covered by Medicare and other federally funded programs.

As part of the settlement, Admera has admitted that it made millions of dollars of commission payments to independent-contractor marketers to induce them to arrange for or recommend that health care providers order and refer clinical laboratory services to Admera, including genetic tests, that were reimbursable by Medicare and/or Medicaid, that it paid marketers through arrangements that took into account the volume and value of genetic testing referrals, and that Admera was informed that the payment of commissions to independent contractors did not comply with the AKS but continued to enter into such contracts.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by relators, Sunil Wadhwa and Ken Newton, co-founders of Financial Halo LLC/MedXPrime, a former third-party marketer for Admera.

Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Wadhwa and Newton v. Admera Health, LLC et al (E.D. Cal.). Relators will receive $862,343 of the proceeds from the settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Office for the Eastern District of California, with substantial investigative assistance from HHS-OIG, the Federal Bureau of Investigation, and the Department of Veterans Affairs, Office of Inspector General. The matter was handled by Assistant U.S. Attorney Colleen Kennedy for the Eastern District of California and Civil Division Fraud Section Trial Attorney Elizabeth J. Kappakas.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The claims resolved by the settlement are allegations only and there has been no determination of liability.

DaVita Inc. provides kidney dialysis services through a network of 2,816 outpatient dialysis centers in the United States, serving 204,200 patients, and 321 outpatient dialysis centers in 10 other countries serving 3,200 patients. The company primarily treats end-stage renal disease (ESRD), which requires patients to undergo dialysis 3 times per week for the rest of their lives unless they receive a donor kidney. The company has a 37% market share in the U.S. dialysis market. It is organized in Delaware and based in Denver.

DaVita has agreed to pay $34,487,390 to resolve allegations that it violated the False Claims Act by paying kickbacks to induce referrals to DaVita Rx, a former subsidiary that provided pharmacy services for dialysis patients, and by paying kickbacks to nephrologists and vascular access physicians to induce the referral of patients to DaVita’s dialysis centers.

The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce referrals of patients or of items or services covered by Medicare, Medicaid and other federally funded programs.

The United States alleges that DaVita paid kickbacks to a competitor to induce referrals to DaVita Rx to serve as a “central fill pharmacy,” or prescription fulfillment provider, for that competitor’s Medicare patients’ prescriptions. In exchange, DaVita paid to acquire certain European dialysis clinics and agreed to extend a prior commitment to purchase dialysis products from the competitor. DaVita would not have paid the price that it did for these deals without the competitor’s commitment to refer its Medicare patients’ prescriptions to DaVita Rx in return.

The United States further alleges that DaVita provided management services to vascular access centers owned by physicians in a position to refer patients to DaVita’s dialysis clinics. DaVita paid improper remuneration to these physician-owners in the form of uncollected management fees to induce referrals to DaVita’s dialysis centers.

Finally, the United States alleges that DaVita paid improper remuneration to a large nephrology practice to induce referrals to DaVita’s dialysis clinics. DaVita gave the practice a right of refusal to staff the medical director position at any new dialysis center that opened near the nephrology practice and paid the practice $50,000 despite the practice’s decision not to staff the medical director position for those clinics.  

“Illegal kickback payments corrupt the market for health care services and cause harm and financial loss to Medicare and other federally funded health care programs,” said Special Agent in Charge Linda Hanley of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our ongoing enforcement efforts aim to safeguard the integrity of taxpayer-funded health care programs, like Medicare and Medicaid, while curbing schemes that unduly influence patients’ and doctors’ health care options.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Dennis Kogod, a former Chief Operating Officer of DaVita Kidney Care. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Kogod v. DaVita, Inc., et al., No. 17-cv-02611-PAB (D. Colo.). Kogod will receive $6,370,000 of the proceeds from the settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Colorado with assistance from HHS-OIG.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

In January 2019 Waliullah Nazari fell off a ladder at work rendering him unconscious. Hospital records indicated he suffered a broad-based disc herniation between vertebrae 4 and 5, with resulting bilateral/lateral recess stenosis, and sciatica. Nazari submitted a workers’ compensation claim to Liberty Mutual Insurance (Liberty Mutual) and received benefits between January 5 and July 19 totaling $99,656.96.

During the course of his treatment for this injury, Nazari told an orthopedic surgeon that he needed a walker to stand and could not walk without using a walker.

On April 11, a private investigator working for Liberty Mutual conducted a recorded surveillance session and saw Nazari enter his car and drive away. He saw Nazari return in the car, exit the car, and walk without using a walker and with a normal gait. Later that day, he saw Nazari walk unassisted to a car, remove a folding aluminum walker from the trunk, assemble the walker, and then carry the walker out of view. A few minutes later, he observed Nazari walking slowly with a walker for support to a medical transport van where the driver assisted him into the van. When the van returned to the residence, the investigator watched as Nazari used the walker to slowly ambulate up the driveway and out of view.

During another surveillance session Nazari was videotaped carrying a small child in his arms, assisting the child into a vehicle, and driving away.

Liberty Mutual deposed Nazari during the time between the video surveillance sessions. At the first deposition, the attorney representing Liberty Mutual observed Nazari enter the room using a walker, move very slowly while standing, and take “quite a bit of time” to sit into his chair. During his second deposition, Nazari claimed, among other things, that he has been unable to carry his child and could not drive because he used a walker. Liberty Mutual closed the investigation in August and reported the matter to the local District Attorney’s Office and California Department of Insurance.

A criminal case was filed, and a jury found Nazari guilty of two counts of making false and fraudulent statements for the purpose of obtaining workers’ compensation benefits (Ins. Code, § 1871.4, subd. (a)(1)) and seven counts of attempted perjury under oath (Pen. Code, §§ 118, subd. (a) & 664). The trial court suspended imposition of sentence and placed Nazari on probation for two years, sentenced him to 365 days in jail as a condition of probation, stayed pending successful completion of probation, and ordered him to pay restitution totaling $53,879.44 at $100 per month. Nazari appealed his conviction.

The Court of Appeal affirmed the trial court in the unpublished case of People v Nazari -D081940 (July 2024).

The sole issue raised on appeal was the sufficiency of the evidence. Nazari contended the evidence was insufficient to show the statements he made to the orthopedic surgeon (1) were false and (2) made for the purposes of obtaining workers’ compensation benefits.

Nazari contends the sub rosa videos of him walking and standing without the use of a walker after his April 1 visit do not show the falsity of his statements on April 1 because the orthopedic surgeon observed symptoms consistent with a back injury and he presumably received relief from the epidural injection.

However the Court of Appeal noted that “there is no evidence in the record to support Nazari’s contention he received an epidural injection before he was subject to surveillance” And from the “videos, the jury could reasonably conclude Nazari misrepresented his pain level, faked reliance on the walker during his physical examination, and falsely told the orthopedic surgeon that he required a walker to stand or walk”.

Nazari next contends that his statements to the orthopedic surgeon were not made for the purposes of obtaining workers’ compensation benefits but for treatment. “However, a claims specialist at Liberty Mutual testified he ‘very much’ relies on statements a workers’ compensation claimant makes to medical professionals, as well as the claimant’s deposition testimony and medical records to determine what benefits will be paid to the claimant. Thus, Nazari’s statements to the orthopedic surgeon influenced the surgeon’s opinion that Nazari required further treatment and influenced Liberty Mutual’s decision to pay Nazari’s medical bills – a form of benefits.”