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Lodi Orthopedic Surgeon Convicted for Fraud After 2 Week Jury Trial

Dr. Gary Royce Wisner was a board certified orthopedic surgeon practicing as Orthopedics Sports & Workers’ Medical Group, Inc,. at 621 S. Ham Ln. Suite A. in Lodi, California.

He was licensed to practice medicine in California, Alabama, and Nevada. He claims to be affiliated with Adventist Health Lodi Memorial, St. Joseph’s Medical Center, and Dameron Hospital. He is a graduate of Universidad Autonoma de Guadalajara Medical School.

In November 2016, representatives from the California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse (DMFEA) were notified by multiple government offices of suspected fraud by Wisner in overbilling the Medi-Cal and Medicare programs.

DMFEA’s investigation into Wisner’s alleged misconduct revealed Wisner would administer X-rays even in routine office visits and would X-ray multiple parts of a patient’s body – regardless of whether it had any relation to a patient’s medical condition.

On May 30, 2018, a grand jury indicted him on 11 felony counts of insurance fraud. for bilking insurers out of more than $700,000 for allegedly providing unnecessary and excessive medical treatment for orthopedic patients. A criminal complaint was filed on July 9, 2018 following the indictment.

On July 23, 2018 the Attorney General filed a 31 page accusation before the Medical Board of California seeking a revocation of his license. The Accusation alleged “gross negligence” in a separate cause for each of eight of his patients. Three of them were being treated for “work related” injuries. The Accusation in essence claimed that he committed gross negligence in his care and treatment when he obtained excessive, non-medically necessary and repeated x-rays of remote areas unrelated to the place of injury.

The Accusation to revoke his license is still pending, and Wisner is still licensed to practice medicine in California.

But the California Attorney General just announced securing a guilty verdict following a two-week jury trial in Sacramento County Superior Court, Wisner was convicted on Thursday, June 16th, of 10 felony counts of health care insurance fraud.

Evidence presented at trial showed that over the course of an approximate four-year period, Wisner subjected ten individual patients to hundreds of unnecessary X-rays at his clinic.

The Attorney Genera’s announcement reports that Wisner is also the subject of an independent criminal complaint filed by the San Joaquin County District Attorney’s Office for worker’s compensation fraud. The case is still pending and Gary Wisner is presumed innocent until proven guilty of those charges.

This investigation was made possible through collaboration with the United States Department of Health and Human Services (HHS), the San Joaquin County District Attorney’s Office, and the California Department of Insurance.

The California Department of Justice’s DMFEA protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These settlements are made possible only through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud at oag.ca.gov/dmfea/reporting.

DMFEA receives 75% of its funding from HHS under a grant award totaling $50,522,020 for federal fiscal year 2021-2022. The remaining 25% is funded by the State of California. The federal fiscal year is defined as October 1, 2021, through September 30, 2022.

Samuel Hale LLC Announces $50M Captive with Arch Insurance

Samuel Hale, LLC is an Employer Carve-out Organization (ECO) designed to protect California businesses from excessive and unpredictable employment costs due to fraud and litigation. The company employs more than 10,000 employees in California.

The company’s revenues grew by 593% between 2018 and 2021. According to the Sacramento Business Journal, they one of 24 Sacramento based companies that are part of Inc. 5000 list of fastest-growing private companies in America.

A labor code “Carve-Out” is a provision of workers’ compensation reform legislation. Samuel Hale was approved by the State of California under Labor Code 3201.7 to conduct business under this provision which allows an employer to form a labor-management alternative workers’ compensation program known as a “Carve-Out.” The key feature of this carve-out is an Alternative Dispute Resolution (ADR) process instead of the Worker’s Compensation Appeals Board process..

An Alternative Dispute Resolution process is judicial procedure used for settling disputes without litigation. LC 3201.7 utilizes an ADR process to expedite workers’ compensation claims and minimize the costs and time of an employee-related injury through the use of an Ombudsman, Mediation and Arbitration.

The company just announced that it will insure its $50 million workers’ compensation risk through an Insurance Captive fronted by A+ rated, Arch Insurance, effective July 1, 2022.

“We’ve been working toward this for the last six years,” says Samuel Hale CEO, Michael A. DiManno. “The captive arrangement will enable us to maximize the advantages of our carve-out agreement which drives the economics of our business,” he adds.

California has a very high litigation rate on workers’ compensation insurance claims relative to the rest of the country. According to the WCIRB, California spends as much money on the frictional costs associated with litigation as it does in wage reimbursement to injured workers, making it one of the most expensive states in the U.S. for workers’ compensation premium.

Carve-outs were created by the Department of Workers’ Compensation to allow approved entities to handle their claim disputes through Alternative Dispute Resolution (ADR) instead of the overburdened court system. ADR, comp claims get settled quickly and employees get their money faster, while insurers can avoid the staggering costs of the slow legal system.

This captive gives us a 10-year horizon on workers’ comp, which creates long-term stability for our customers in a very shaky financial climate,” DiManno says. “We now have maximum control over our program and can deploy the best cost-containment services based on our specific needs,” he explains.

Not much will change for customers in terms of service and Samuel Hale clients will maintain their rates extending their claim of never increasing premiums on their customers.

Comp Treatment Faces Shortages of Physicians, Drugs, and Supplies

According to the report published by RXInformer, over 50% of U.S. physicians are over the age of 50 and one third will be over the age of 65 in the next decade.Thirty percent of physicians retire between the ages of 60 and 65, and more are leaving the profession before retirement age due to job dissatisfaction and burnout. A limited number of residency programs, combined with fewer young people aspiring to careers in medicine, has restricted the number of new physicians. All of which means that physicians are leaving the profession faster than they can be replaced.

The Association of American Medical Colleges projects a shortage of 47,000 – 122,000 physicians by 2032, with family and internal medicine, emergency medicine, hospitalists, and radiologists all falling within the top 10 specialties experiencing shortages. Urgent care, cardiology, orthopedic surgery, neurology, general surgery, and anesthesiology are all included within the top 20.

And the healthcare industry has been directly affected by supply chain disruptions for a large variety of products, as well as experiencing an exacerbation of the already serious shortage of healthcare professionals, making some services equally hard to come by.

The ripple effect of supply chain disruptions, along with ongoing price inflation, can make it challenging to keep up with the fluctuating scarcity and costs of healthcare goods and services, but some notable deficiencies that affect workers’ compensation healthcare include:

Oxygen: COVID-19 has caused a very high demand for oxygen, which many people who suffer from other chronic respitory ailments had already depended on. While oxygen itself is not in short supply, providing the specialized containers, vehicles, and drivers required to safely transport liquid oxygen has been a challenge. Nearly three quarters of suppliers have reported delays for this equipment and 67% reported increased costs, which causes hardship for patients who rely on supplemental oxygen and cannot get refills for home use as quickly and easily as they need.

Basic Medical Supplies: U.S. companies that sell medical supplies such as gloves, cotton swabs, gauze, and other essentials, have long relied on overseas manufacturers to produce their products. When the pandemic hit, many governments required their manufacturers to supply their own countries before servicing overseas customers, which has caused a fluctuating chain of shortage and high prices.

Walking Aids: A long list of durable medical equipment (DME) in short supply includes an acute shortage of crutches, canes, walkers, wheelchairs, and braces These products are manufactured with aluminum, one of a number of raw materials in great demand, leaving some hospitals and care facilities to request donations of unused equipment from their communities. Shortages of these supplies also hampers progress in physical therapy by delaying patients’ transition from wheelchair to walker to cane, etc.

Medical Monitors: Largely due to the backlog of computer chip orders, monitoring devices for blood pressure, insulin, and other vital information are taking longer to procure and costing more. A recent survey of medical technology companies found that 100% had experienced disruptions to their semiconductor chip supply chains and that 50% of the products they produce rely on such chips.

Diagnostic Equipment: Ultrasound machines, CT scanning devices, and imaging machines also require seminconductor chips. The competitition for chips is fierce because they are also used in a mutlitude of consumer items from automobiles to video game consoles. When orders of new equipment are delayed for medical providers and there is a shortage of healthcare professionals available, patients have to wait longer for diagnostic tests, which can in turn, delay appropriate treatment.

Home Health Professionals: The heavy responsibilities and light wages that are typical for home health aides have made good help hard to find for some time. Making it worse, many home health workers left their jobs due to illness or fear of contracting illness, burnout, or the need to care for children or other relatives at home. The shortage of home health aides has continued and is causing a gap between requests for home health services and the ability of agencies to meet those requests. The problem is not expected to get better anytime soon with home health aides projected as the occupation that will have the most demand for workers over the next decade.

A number of solutions should be considered by claims professionals. For example, monitoring, measuring, and comparing network provider performance is a good way to fully optimize managed care. Capturing and analyzing relevant data such as referral acceptance, turnaround times, formulary adherence, etc. is more important than ever to ensure that quality standards are met at the lowest cost possible. Comparing metrics between vendors not only informs current management strategy, but can assist in anticipating future industry trends.

Owner of Limousine Company Arraigned for Payroll Fraud

Gamlet Abramian, 47, of Porter Ranch was arraigned on felony counts of workers’ compensation fraud after a California Department of Insurance investigation revealed he allegedly underreported payroll for businesses in order to save over $210,000 in insurance premiums.

Abramian owns or is involved in managing three limousine companies in the Los Angeles area: D&D Limo, Superior Enterprise, and On Time Coach Executive.

The Department’s investigation began after the California Public Utilities Commission’s licensing unit noticed Abramian reported between five to 12 drivers, but either did not have a workers’ compensation insurance policy or reported zero employees to the insurance company.

The investigation found Abramian reported zero in employee payroll to the insurance company, allegedly in an attempt to save on workers’ compensation premiums.

As part of the investigation, a search warrant was served to the companies’ banks, which showed the unreported payroll between June 2018 through September 2020. The unreported payroll resulted in $212,667 of unpaid premiums to the insurance company and left employees uninsured.

Abramian self-surrendered and was arraigned on Monday, June 13, 2022. The Los Angeles County District Attorney’s Office is prosecuting this case.

SCOTUS Enforces California Employee Arbitration Agreements

In the closely watched underlying case of Moriana v Viking River Cruises Inc. Angie Moriana sued her former employer Viking River Cruises, a company located in Woodland Hills California, in a California state court seeking recovery of civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).

She alleged that Viking had failed to provide her with her final wages within 72 hours, as required by §§101-102 of the California Labor Code. The complaint also asserted a wide array of other code violations allegedly sustained by other Viking employees, including violations of provisions concerning the minimum wage, overtime,meal periods, rest periods, timing of pay, and pay statements.

Moriana’s employment contract with Viking contained a mandatory arbitration agreement. Viking moved to compel arbitration of Moriana’s individual PAGA claim and to dismiss her other PAGA claims. The trial court denied Viking’s motion and the 2nd district Court of Appeal affirmed in the unpublished Court of Appeal opinion.

Viking argued that the United States Supreme Court’s decision in Epic Systems Corp. v. Lewis (2018) overruled the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, in which the California Supreme Court held” “that an employee’s right to bring a PAGA action is unwaivable,” and that “here . . . an employment agreement compels the waiver of representative claims under the PAGA, it is contrary to public policy and unenforceable as a matter of state law.”

Applying California’s Iskanian precedent, the California courts denied that motion,holding that categorical waivers of PAGA standing are contrary to California policy and that PAGA claims cannot be split into arbitrable “individual” claims and nonarbitrable “representative” claims.

The Supreme Court of the United States granted certiorari to decide whether the Federal Arbitration Act preempts the California rule. In an 8-1 decision, it held that the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate in the case of Viking River Cruises v Morniana – No. 20-1573 (June 2022).

The California Legislature enacted PAGA to address a perceived deficit in the enforcement of the State’s Labor Code. The primary function of PAGA is to delegate a power to employees to assert “the same legal right and interest as state law enforcement agencies,” But it does not create any private rights or private claims for relief. As the California courts conceive of it, the State “is always the real party in interest in the suit.”

California precedent also interprets the statute to contain what is effectively a rule of claim joinder. Rules of claim joinder allow a party to unite multiple claims against an opposing party in a single action. An employee who alleges he or she suffered a single violation is entitled to use that violation as a gateway to assert a potentially limitless number of other violations as predicates for liability. In this regard the SCOTUS opinion noted that this “mechanism radically expands the scope of PAGA actions.”

The FAA was enacted in response to “judicial hostility to arbitration.” The FAA’s “mandate is to enforce arbitration agreements.” Yet conflict between PAGA’s procedural structure and the FAA does exist, and that it derives from the statute’s built-in mechanism of claim joinder.

PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding. And under PAGA’s standing requirement, a plaintiff has standing to maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action.

State law cannot condition the enforceability of an arbitration agreement on the availability of a procedural mechanism that would permit a party to expand the scope of the arbitration by introducing claims that the parties did not jointly agree to arbitrate.”

Iskanian’s prohibition on wholesale waivers of PAGA claims is not preempted by the FAA. But Iskanian’s rule that PAGA actions cannot be divided into individual and non-individual claims is preempted, so Viking was entitled to compel arbitration of Moriana’s individual claim.

“When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.” As a result, Moriana would lack statutory standing to maintain her non-individual claims in court, and the correct course was to dismiss her remaining claims.

In responding to the decision, the California Attorney General said “While today’s decision is disappointing and adds new limits, key aspects of PAGA remain in effect and the law of our state.

Federal Rules Shortens Time to File Koby Bryant Subrogation

A January 26, 2020, helicopter crash in Calabasas, California resulted in the deaths of Kobe Bryant; his minor daughter, six other passengers, and the pilot.

One of the passengers was Christina Mauser, who was in the course and scope of her employment as a basketball coach for Sports Academy, LLC, insured for workers’ compensation benefits by The Hartford Accident & Indemnity Company. Hartford paid funeral and burial costs, and death benefits.

The Mauser Plaintiffs filed their Complaint for Damages with the Superior Court of California against various parties they alleged were responsible for the incident.. When the United States was named as a defendant in the action, it removed the case to the Federal Central District of California on September 30, 2020. Motions to remand to state court were denied.

On July 9, 2021, Hartford filed its Intervention Motion in the federal case after tentative settlements had been reached in the case. On July 22, 2021, the United States Government filed its Opposition to Hartford’s Intervention Motion on the basis that it did not present an administrative claim against it and there was no jurisdiction. No other parties opposed the Intervention Motion.

On November 10, 2021, the federal court issued its Orders granting the Mauser Plaintiffs’ Petitions for Minors’ Compromise and denying Hartfords July 9 Intervention Motion.

An appeal of the denial was filed in the 9th Circuit Court of Appeals. On June 14, 2022 Hartford filed it’s Motion to Voluntarily Dismiss the Appeal.

On appeal, Hartford had argued that error was made in the original denial of Hartford’s Motion “because the Court based its determination that the Intervention Motion was untimely on federal procedural law, instead of substantive state law. California Labor Code § 3853 specifically provides that a motion to intervene pursuant to California Labor Code § 3850, et seq. is timely if it is filed at any time before trial on the facts.”

In denying the Motion to Intervene, the trial court found that intervention is not appropriate, either as of right or permissively.

With respect to intervention as of right, a court must permit any party to intervene in a lawsuit who “claims an interest relating to the property or transaction that is the subject of the action.Fed. R. Civ. P. 24(a)(2). Rule 24(a)2 is broadly construed in favor of intervention. The Ninth Circuit employs four criteria to determine whether intervention under Rule 24(a) is appropriate: (1) the motion to intervene must be timely; (2) the applicant must have a significantly protectable interest related to the property or transaction that is the subject of the action; (3) the applicant must be situated such that the disposition of the action may impair or impede the applicant’s ability to protect that interest; and (4) the applicant’s interest must not be adequately represented by the existing parties.

Sports Academy and Hartford acknowledge, the Mauser plaintiffs initially filed their complaint on April 20, 2020, and their action was removed to federal court on September 30, 2020. Sports Academy and Hartford do not explain why they waited until over a year after Mauser plaintiffs filed their action – and more than nine months after it was removed to federal court – before filing the instant Motion. Thus, the court found that the Motion was untimely.

Having failed to satisfy at least two of the requirements for intervention pursuant to Rule 24(a), the court was not persuaded that Sports Academy and Hartford have met their burden for intervention as of right.

With respect to permissive intervention under Rule 24(b), a court may grant permissive intervention where: (1) the applicant shows independent grounds for jurisdiction; (2) the motion is timely; and (3) the applicant’s claim or defense and the main action share a common question of law of fact. In exercising its discretion on an application for permissive intervention, the court “must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights. Because the court finds this unexplained delay renders the Motion untimely and risks delaying or prejudicing the adjudication of the original parties’ rights, the court declines Sports Academy and Hartford’s request for permissive intervention.

Bay Area Telemedicine Startup Faces FTC & Congressional Scrutiny

Cerebral Inc. is a San Francisco based mental health telemedicine startup that provides access to medication management, therapy, and counseling for anxiety, depression, insomnia, ADHD, and more. The company is now under intense scrutiny from a number of oversight organizations, and the media.

Congressional investigators are asking the U.S. Drug Enforcement Administration what it’s doing to oversee mental health startups such as Cerebral Inc., calling the company’s business and prescribing practices “manipulative” and “aggressive,” according to a copy of a letter seen by Bloomberg.

In the letter, the chairman of the House Committee on Oversight and Government Reform asked the DEA about the startups, which have rapidly expanded by offering online consultation with clinicians as well as prescriptions for drugs such as Adderall and Xanax.

“The Committee respectfully requests information from the Drug Enforcement Administration to ensure you are focused on catching bad actors who take advantage of the current permissive regulatory structure,” committee Chairman Gerald Connolly said in the June 6 letter, which mentions Cerebral several times. “Reports claim that some companies believe DEA will not or do not have the capacity to enforce its rules.”

In response to the letter, a spokesman for Cerebral told Bloomberg: “Our clinicians are directed to act based on what they conclude is best for patients. We provide best-in-class resources and support systems to our clinicians and do not dictate how clinicians should treat patients.”

Because of pandemic-era regulatory relaxations, remote prescribing of controlled substances for mental health treatments has been permitted over the last two years. Cerebral, a SoftBank Group-backed startup, became a leader in the field of remote prescribing for mental health ailments such as depression and ADHD. The firm, which recently ousted its founder, is being investigated by the federal government for possible violations of the Controlled Substances Act. The company is fully cooperating with that investigation, a Cerebral spokesperson said last month.

Launched in January 2020, Cerebral became one of the most prominent companies in the budding industry. At first, it prescribed only non-controlled substances, such Lexapro and Prozac. Only after regulators loosened prescribing rules during the pandemic did it begin to prescribe drugs that are more tightly controlled by regulators because of their potential for abuse. After a $300 million investment from SoftBank in 2021, Cerebral was valued at $4.8 billion.

In a March report in Bloomberg Businessweek, former nurse practitioners for the company described a fear that Cerebral was over-prescribing the medications. Since then, Cerebral has gone through a variety of changes. In early May, founder and then-chief executive officer Kyle Robertson announced the company would stop writing prescriptions for controlled substances. Robertson has since been ousted by the board of directors and replaced by David Mou, who was the chief medical officer for the company.

The Federal Trade Commission has begun an investigation into mental-health startup Cerebral Inc., according to a letter the FTC sent the company that was reviewed by The Wall Street Journal.

In the letter dated June 1, the FTC said it was investigating whether Cerebral engaged in deceptive or unfair practices related to advertising or marketing of mental-health services. The letter also directed the company to preserve documents.

The FTC’s letter asks Cerebral to answer dozens of questions related to its business. In particular it seeks information related to any programs where Cerebral continues to bill customers a subscription fee until the customer cancels, also called “negative option programs.”

Cerebral said in a statement that it intends to cooperate fully with the FTC and that it is working to improve its service for patients. The company said it has recently undergone an effort to redesign the cancellation process.

Cerebral also has announced layoffs, with affected employees being notified by July 1. A spokesman said the layoffs were part of a decision to “double down on quality” and restructure operations.

Single-Payer Healthcare Proposals Consider Including Workers’ Comp

The idea of a single-payer health insurance system has been discussed at both federal and state levels for years. To date, no state has fully adopted such an approach; however, several jurisdictions are studying the issue.

Of particular interest are bills that include a reference to workers compensation. According to the report by NCCI, in most states that reference workers compensation, the legislation generally contains similar language that directs the board of new state single-payer healthcare programs to develop a proposal for coverage of healthcare items and services covered under the workers compensation system, including whether and how to:

– – Continue funding for the healthcare services under the workers compensation system
– – Incorporate an element of experience rating

In 2022, four states considered or are considering single-payer health insurance proposals with a workers compensation component:

– – Kansas introduced HB 2459, which would have created a universal single-payer healthcare program. The bill required the new program’s board to develop proposals addressing workers compensation and experience rating by July 1, 2024. The bill did not advance this session.
– – Rhode Island introduced H 8119 and S 2769, which would create a universal single-payer healthcare program. The bills require the new program’s director to develop procedures for accommodating coverage of healthcare services covered under the workers compensation system.
– – California AB 1400 would have created a universal single-payer healthcare program and required the new board to develop proposals addressing workers compensation and experience rating. But the bill was not called for a vote on the Assembly floor and is considered failed for this legislative session.
– – New York A 6058, introduced in 2021, would establish a single-payer healthcare program in the state. The bill was recently voted out of the Assembly Committee on Codes and is now in the Assembly Ways and Means Committee. It requires the board of the new healthcare program to develop a proposal for healthcare services covered under the workers compensation law. This includes whether and how to continue funding those services under that law and incorporate an element of experience rating. (The Senate companion bill, S 5474, is currently in the Senate Health Committee.)

In addition, Oregon enacted legislation in 2021 that extended a previously created state Task Force on Universal Healthcare until 2023 and extended the deadline for the task force to submit recommendations to the legislature until September 30, 2022. The recommendations may address whether the single-payer healthcare program should replace the medical portion of workers compensation. Washington enacted legislation in 2021 that established a new commission on universal healthcare. The commission must submit a report with recommendations to the state legislature and the governor by November 1, 2022. However, the legislation did not include a workers compensation component.

Single-payer health insurance is an important topic and all proposals, whether federal or state, raise numerous questions for workers compensation stakeholders, including:

– – What happens to the state workers compensation system if a state enacts single-payer health insurance legislation and the state decides to incorporate the medical portion of workers compensation into the new single-payer program?
– – Would the private workers compensation market continue to write workers compensation policies to cover the indemnity portion of workers compensation?
– – If so, how would the split in public/private coverage impact the delivery system for injured workers, including benefits, quality of care, etc.?
– – How would workers compensation regulators fit into the new system? Would they continue to have any oversight?
– – For employees, their primary concerns are how will this affect benefit delivery and overall medical care for a workplace injury or illness. Would it streamline it or slow it down?
– – Would an employee have to pay into the new system to receive medical care for a workplace injury, unlike workers compensation where the employee does not have to pay for medical care?

Comp Carriers Prevail in Alleged Claimant Data “Hacking” Claim

A putative class action has been in various stages of litigation, in both state and federal courts since 2015, against Berkshire Hathaway Homestate Insurance Company, its wholly owned subsidiary Cypress Insurance Company, Zenith Insurance Company, the defense lawfirm of Knox Ricksen, LLP, and others.alleging that the defendants illegally “hacked” confidential information about workers’ compensation claimants to use to defend claims pending before the WCAB.

Palmdale based HQSU Sign Up Services, Inc. was the centerpiece of the compromised data. HQSU is allegedly paid a pre-negotiated flat fee to provide “administrative services” for clients unable to come to an attorney’s office due to physical, financial, or transportation limitations, and to.assist attorneys signing a retainer agreement and filling out an In-Take Packet with personal information. HQSU then uploads the documents to its allegedly username and password-protected website.

The alleged “hacking” of the HQSU files was first suspected during an in-chambers hearing in a worker’s compensation case before Presiding Judge Paige Levy. The case was being defended by Knox Ricksen. Knox Ricksen’s attorneys allegedly revealed they had Mr. Casillas’ attorney-privileged In-Take Packet. Judge Levy ruled it was attorney client privileged and ordered it to be returned.

Allegedly the downloading of documents from HQ Sign Up compromised approximately 32,500 intake sheets, in addition to the Casillas documents. Plaintiff’s experts have allegedly discovered that the documents were obtained by a “directory traversal attack.” Directory traversal is an HTTP exploit which allows attackers to access restricted directories and execute commands outside of the web server’s root directory.

On the other hand, Zenith has argued HQSU intake packet materials were obtained using a Google search of the claimant’s name and thus “were found in the public domain.” There was a suspicion at the time that HQSU was really a runner or capper organization soliciting injury claimants for lawfirms

The 2015 and 2016 cases filed in federal district court were not successful for various reasons including standing to sue in federal court. In July 2017, the litigation proceeded to state court when plaintiffs filed a complaint for a cause of action for trespass to chattels. In 2019 (after appeals of the federal court dismissal were exhausted) the trial judge in state court sustained demurrers to the state lawsuit. The plaintiffs appealed the dismissal and Court of Appeal sustained the dismissal in the published case of Casillas v Berkshire Hathaway et. al.B302442 (June 2022).

Having abandoned a privacy claim during their federal litigation, appellants effectively attempted, both in the trial court and on appeal, to repackage an alleged invasion of privacy as a trespass to chattels.

In deciding the appeal, the Court relied heavily on the California Supreme Court case of Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 71 P.3d 296. The elements of the tort of trespass to chattels include “injury to the plaintiff’s personal property or legal interest therein.

Appellants conceded respondents had not damaged the HQSU system, corrupted the files they allegedly copied from the system, or impaired appellants’ access to the files.

Subsequent cases have applied Intel to instances of alleged hacking, similar to Plaintiffs’ allegations here. None of Plaintiffs’ authorities support the proposition that an actionable trespass to chattel claim exists when an alleged tortfeasor neither damages nor impairs a plaintiff’s computer system.

The Court of Appeal concluded that the appellants failed to allege any actionable injury because: (1) they did not allege damage or disruption to the computer system, as required by Intel; and (2) in any event, they did not allege injury to the copied files or their asserted property interests therein.

Cal/OSHA Proposes Workplace Violence Prevention Plan Expansion

California Code of Regulations, Title 8, Section 3342 require covered employers to develop a workplace violence prevention plan (WVPP). The plan must include procedures to identify and evaluate risk factors for workplace violence, correct hazards, prepare for workplace violence emergencies, and respond to and investigate violent incidents.

Currently the regulation applies to health care facilities covered by the standard. However, Cal/OSHA recently released a revised draft regulation for workplace violence prevention to apply to general industry, not just health care.

The process of increasing the scope of the WVPP regulation commenced in 2014 by way of a Petition filed on behalf of “over 300,000 teachers who work in the state of California” who asked Cal/OSHA “for the creation of workplace safety standards to reduce injuries in the educational setting.”

Petition 542 was subsequently granted “to the extent that it will be sent to an advisory committee to address workplace violence prevention in all California workplaces, specifically inclusive of educational workplaces.” This led to draft proposals that were published in 2018, and now the revised discussion draft in May 2022.

The newest draft proposal adds section §3343 to the regulations. This new section does not apply to health care facilities, service categories, and operations covered by California Code of Regulations, title 8, section 3342, as well as facilities operated by the California Department of Corrections and Rehabilitation, and to certain law enforcement agencies which are covered by other regulations.

If adopted, all other employers “shall establish, implement and maintain an effective workplace violence prevention plan.” And “shall record information in a violent incident log (Log) about every workplace violence. incident.” However a “log is not required when an employer has had no workplace violence incidents in the past five years.”

And the “employer shall provide employees with general awareness training on workplace violence that includes: the employer’s Plan, how to obtain a copy of the employer’s Plan, how to participate in development and implementation of the employer’s Plan, the definitions and requirements in this section, and how to report workplace violence incidents or concerns to the employer without fear of reprisal.”

The Division is seeking input on a revised discussion draft for workplace violence prevention in general industry. Interested parties are invited to submit written comments to Senior Safety Engineer Kevin Graulich, KGraulich@dir.ca.gov by July 18, 2022.