Category: Daily News

On October 7, 2019, California Governor Gavin Newsom signed Assembly Bill 824 (“AB 824”) into law. AB 824 creates a presumption that “reverse payment” settlement agreements regarding patent infringement claims between brand-name and generic pharmaceutical companies are anticompetitive and unlawful.

Reverse payment settlement agreements arise primarily – if not exclusively – in the context of pharmaceutical drug regulations and suits brought under the statutory provisions of the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act.

Under the Hatch-Waxman Act, once a brand-name company has submitted a new prescription drug to the U.S. Food and Drug Administration (“FDA”) and gained approval to market it, a manufacturer of a generic drug with the same active ingredients that is biologically equivalent to the approved brand-name drug can gain approval to market the generic through an abbreviated FDA process.

The New Drug Application (“NDA”) process to which new prescription drugs are subject is long, comprehensive, and expensive, whereas the Abbreviated New Drug Application (“ANDA”) process to which generic drugs are subject is substantially less expensive and requires far less testing.

In order to gain approval through the FDA, the generic company must file an ANDA. As part of this application, the generic company must assure the FDA that its drug will not infringe on any patents owned by the brand-name company. The brand-name company can and often does bring suit against the generic drug manufacturer over patent rights.

Settlements of the resulting lawsuits sometimes include reverse payments in which the plaintiff, the brand-name company, pays the defendant, the infringing generic company, a sum of money for the promise that the generic company will keep its drug off the market for an agreed-upon length of time. These have become known as “pay-for-delay” agreements in the drug industry.

AB 824 targets these types of settlements. According to the State, AB 824 closes this loophole in the Hatch-Waxman Act and ensures a brand-name company cannot continue to enforce an otherwise weak patent against generic companies through these reverse payment settlement agreements. AB 824 imposes a presumption that a settlement agreement involving a brand-name company compensating the generic company for keeping its drug off the market is anticompetitive under California antitrust law.

A nonprofit, voluntary association comprised of the leading manufacturers and distributors of generic and biosimilar medicines, manufacturers and distributors of bulk active pharmaceutical ingredients, and suppliers of other goods and services to the generic and biosimilar pharmaceutical industry, filed a federal lawsuit in an attempt to invalidate AB 824 in the case of Association for Accessible Medicines v Bonta – 2:20-cv-01708-TLN-SCR.

On September 15, 2023, the State of California and Plaintiff Association-for-Accessible-Medicines filed motions for summary judgment. The State argued the participation of each of Plaintiff’s members is necessary to establish associational standing and all of Plaintiff’s claims fail on the merits. Plaintiff argued there are no genuine disputes of fact regarding its standing and that it succeeds on the merits of its dormant Commerce Clause claim.

On February 12, 2025 the motions were granted in part and denied in part. The Court converted “the current preliminary injunction into a permanent injunction. The State may enforce the provisions of AB 824 with respect to settlement agreements negotiated, completed, or entered into within California’s borders. The injunction bars the Attorney General of the State of California, as well as the Attorney General’s officers, agents, employees, attorneys, and all persons in active concert or participation with them from implementing or enforcing AB 824 against Plaintiff, its member entities, or their agents and licensees, with the exception of settlement agreements negotiated, completed, or entered into within California’s borders.”

Ordering the insurance companies’ FAIR Plan to continue swiftly paying claims to Southern California wildfire survivors, Insurance Commissioner Ricardo Lara today took action to maintain its solid financial footing. The FAIR Plan, an insurance safety net that the state requires insurance companies to operate, requested the Commissioner’s approval for $1 billion in additional funds from its member companies and also released detailed data about its claims paid to wildfire survivors.

Commissioner Lara approved the FAIR Plan’s request – known as an “assessment” – for the funding necessary to continue meeting its obligations to Californians. The fee will be divided among insurers based on their market share. The $1 billion assessment is the largest since the FAIR Plan was created in 1968, and the first time since the 1994 Northridge earthquake. State regulations allow insurers to pass along as much as half the cost of the assessment to customers, in the form of higher charges. Insurers must absorb the other half.

Additional key actions include:

– – Directing the FAIR Plan to hire additional staff needed to process and pay claims fairly, fully, and quickly.
– – Requiring the FAIR Plan to utilize all available funds, including reserves and reinsurance funds.
– – Protecting consumers from bearing the full cost of an assessment, with insurance companies responsible for half the assessment under an agreement reached last year. Subject to the Commissioner’s prior approval under Proposition 103, insurance companies may issue a temporary supplemental fee as a percentage of the policy premium and cannot pass assessment costs on to consumers in future rates.
– – Maintaining a healthy FAIR Plan reserve fund for future claims as the summer wildfire season approaches.
– – Requiring the FAIR Plan to comply with all laws applicable to other insurance companies, including advance payments for living expenses and personal property without the need for an inventory.

Commissioner Lara claims he finalized the Sustainable Insurance Strategy in 2024 – the largest insurance reform in 30 years – aimed at increasing the issuance of regular insurance policies in higher-risk areas and reducing reliance on the FAIR Plan.

Further underscoring the need for this reform, the most recent FAIR Plan assessments followed the 1993 Kinneloa Fire in Altadena and the Old Topanga Fire in Malibu and Topanga, which affected some of the same areas as the 2025 fires – claiming three lives and destroying nearly 550 structures in those devastating incidents. Previous insurance commissioners approved $260 million, or approximately $563 million in today’s dollars, in assessments for those fires and for the fires following the 1994 Northridge Earthquake.

Commissioner Lara expects to file the Department’s Report of Examination for an ongoing financial examination of the FAIR Plan, including its compliance with recommendations from the Department’s 2022 Operational Assessment Report in coming months. The report called for significant changes in the FAIR Plan’s governance, operations, underwriting and claims handling, risk management, customer service, and financial planning strategies and policies.

Using FAIR Plan data from the Property Insurance Plans Service Office (PIPSO), the AM Best Commentary titled, “California Wildfires: Multiple Credit Negative Impacts for Insurers,” reveals that the number of California FAIR Plan policies rose by 276 percent from 2018 through 2024 (based on fiscal years ending September 30). And the premium attributable to these policies jumped to $1.4 billion in 2024, up more than 15-times higher than the $87.2 million recorded for the California FAIR plan in 2018.

Dario Morales Dominguez was employed by Shield Platinum Protection LLC when he claimed industrial injuries as a result of a cumulative trauma during the period January 1, 2020 through September 1, 2020 to multiple parts of body. His claim was resolved by Compromise and Release and WCJ Joy issued an Order approving the C&R on May 12, 2022.

On December 15, 2022, lien claimant ABC International (ABC) filed a lien for interpreting services rendered to applicant as a result of his claimed injuries.

After several lien conferences, the case was set for lien trial on April 24, 2024 before WCJ Joy. At the lien trial of April 24, 2024, the WCJ continued the matter to another trial date, and issued the following comments and Order on the Minutes:

– – “[P]arties appear unable to resolve lien and as of this dispo, LC’s exhibits are pending population in EAMS.
– – WCJ has concerns re: Defendant and CCR 10880(a)(3)1. Defendant’s claim adjuster and adjuster’s supervisor are to appear in person at next trial to discuss. IT IS SO ORDERED.”

The Defendant Petitioned Removal of the case to the WCAB in response to the Order issued by the workers compensation administrative law judge (WCJ) on April 24, 2024. In that petition the Defendant argued that no good cause exists to compel the personal appearance of the adjuster and the adjuster’s supervisor at an in person trial.

The WCAB granted removal, and rescinded the Order of the WCJ to appear in person, and substitute a new order stating that the claims adjuster and the adjuster’s supervisor must be available by virtual or telephonic appearance at the upcoming trial of this matter in the case of Morales-Dominguez v Shield Platinum Protection LLC -ADJ14175141 (February 2025).

The Petitioner claimed that that an order to appear in person constitutes an undue burden on the adjuster, as it causes a practical hardship, and prevents them from handling other cases that would be impacted by a physical appearance. Petitioner further contended that no monies are due lien claimant as there are unresolved legal issues that prevent settlement, but that the claims adjuster is available either telephonically or by other electronic means, and defendant has complied with WCAB Rule 10880(a).

In response, the WCAB panel noted that “The WCJ has broad authority to issue orders to ensure proper adjudication of each claim, including “any interim, interlocutory and final orders, findings, decisions and awards as may be necessary to the full adjudication of the case.” (Cal. Code Regs., tit. 8, § 10330.) This may include Orders that a party appear at a given hearing, should same be warranted.”

“While the WCJ retains the authority to order the adjuster to appear in person for a hearing for good cause if the circumstances warrant it, consideration should be given as to the subject or the nature of the hearing, as well as the dispute, the relief sought, the utility of the adjuster appearing in person versus appearing by phone, and the practical hardship and burden of having to appear in person, factoring in the distance and nature of the travel required. (Derrick Burford v. Cook Concrete Prods., (board panel decision) 2016 Cal. Wrk. Comp. P.D. LEXIS 1, 8.)”

“Here, while the WCJ may wish to bring the parties together and discuss settlement options or inquire further as to issues in dispute prior to commencing trial, we find an Order for both the adjuster and supervisor to appear in person for that purpose excessive. That same goal may be accomplished by an Order for the adjuster and supervisor to appear at trial by either virtual or telephonic means.”

The Division of Occupational Safety and Health, known as Cal/OSHA, has cited employers Smelly Mel’s Plumbing and Sewer Rat Plumbing a total of $529,640 in proposed penalties for violating safety regulations that resulted in serious injuries to a construction worker during a trench collapse in San Mateo on August 1, 2024.

Cal/OSHA, a division of the Department of Industrial Relations, found a total of 16 violations, evenly split between both businesses. Among these citations were two willful, serious accident-related violations – meaning the businesses were aware of the safety hazards, had prior warning, and still failed to take corrective action.

On August 1st, 2024, a crew was handling a sewer line project at a private residence in San Mateo. The job took a near-deadly turn when the walls of the trench collapsed, burying a worker under the debris and causing serious injuries that required hospitalization.

The citations issued include violations for improper protective systems, inadequate training, and failure to inspect the trench and surrounding conditions including:

– – Inspection Failure: Employers did not ensure that a competent person conducted daily inspections of the trench, adjacent areas, and protective systems that could have detected hazardous conditions such as cave-ins.
– – Lack of safe exit routes: Both employers failed to provide the construction workers a ladder or other safe means of exiting the trench that was approximately 9 feet and 3 inches in depth.
– – No adequate protective systems in trench: Neither employer provided adequate protective systems, such as shoring, shielding, sloping, or benching to the trench to prevent its collapse.
– – Failure to protect workers from falling debris: Neither employer protected their workers from excavated materials or equipment that could pose a hazard by falling or rolling into the trench.
– – Foot Protection: The employer failed to ensure that their workers had proper foot protection, which exposed at least one worker to foot injuries when using a jackhammer.
– – Insufficient emergency medical provisions: The employers did not have an appropriate number of trained persons to render first aid at the jobsite.
– – Permit Requirements: The employers failed to notify the division prior to the start of the annual permit-required activity of constructing an excavation over 5-feet in depth.
– – Injury and Illness Prevention Program: The employers failed to conduct a toolbox safety meeting at the jobsite with the crew for the duration of the project.

Employers have the right to appeal any Cal/OSHA citation and notification of penalty by filing an appeal with the Occupational Safety and Health Appeals Board within 15 working days from the receipt of notification.

Cal/OSHA Chief Debra Lee said “Trench collapses remain one of the most serious hazards in construction, and employers must take all necessary steps to protect their employees. These citations serve as a reminder that businesses must prioritize worker safety, especially during high-risk operations to avoid tragic accidents.”

Rafael Castro, a veteran of the U.S. Navy and a former employee of the Veterans Health Administration and the Internal Revenue Service, and his wife, Miriam Castro, pleaded guilty in federal court to defrauding the Department of Veterans Affairs (VA) out of more than $130,000.

According to their plea agreements, between September 2018 and April 2024, the Castros lied to obtain caregiver benefits from the Caregiver Support Program, a VA program that provides caregiver support for injured veterans. Rafael Castro admitted that he lied about needing high-level assistance for daily activities, including dressing and undressing himself, personal hygiene, and grooming.

According to plea documents, Rafael Castro defrauded the VA into awarding him assistance that paid the primary caregiver – his wife – an amount equivalent to a full-time home health aide’s 40-hour per-week payment.

According to plea documents, for years, Miriam Castro received monthly payments to be a full-time caregiver for Rafael Castro while her husband worked as a full-time federal employee. From July 2015 to June 2023, Rafael Castro worked for the Veterans Health Administration, and from June 2023 to April 2024, he worked for the Internal Revenue Service. Even though he was employed by the federal government, Rafael Castro falsely told VA representatives at least six times that he was unemployed.

For example, during a 2023 interview, Rafael Castro falsely claimed that he had last worked in 2018 and that his wife was his full-time caregiver. According to their plea agreements, while Rafael Castro was engaged in the fraud scheme, he received several promotions, all while he continued to claim he was unemployed. In their respective plea agreements, Rafael Castro and Miriam Castro admitted that they participated in the multi-year scheme to defraud the VA.

“This case is an excellent example of the importance of internal inspections within government programs,” said U.S. Attorney Tara McGrath. “Without the intervention from the Inspector General’s Office, this fraud might have continued indefinitely.”

“These guilty pleas demonstrate that those involved in defrauding VA, including government employees, will be held accountable,” said Special Agent in Charge Anthony Heddell with the Department of Veterans Affairs Office of Inspector General’s Western Field Office. “The VA OIG will continue to work with our law enforcement partners to ensure the integrity of VA’s benefits programs and services.”

“Violations of federal law, particularly those committed by IRS employees will not be tolerated and will be prosecuted to the fullest extent of the law,” Acting Special Agent in Charge Brandon Knarr stated. “TIGTA will continue to work closely with the United States Attorney’s Office and our law enforcement partners to identify, investigate and hold those individuals responsible for their illegal activities.”

Sentencing is scheduled for April 25, 2025, at 9 a.m. before U.S. District Judge James E. Simmons, Jr. This case is being prosecuted by Assistant U.S. Attorney Edward Chang.