Category: Daily News

Kelly Gola and members of the class she represents were adjunct faculty – part-time university professors engaged to teach on a semester-by-semester basis – at the University of San Francisco.

Adjunct faculty at the University, of whom there are more than 600, are represented by a labor organization: the USF Part Time Faculty Association which had a Collective Bargaining Agreement (CBA) with the employer.

The University’s practice with respect to adjunct faculty was to hire them to teach individual classes on a semester-by-semester basis. For each semester, the University would issue appointment letters offering employment to prospective adjunct professors during a specified assignment period that ran from the first day of that semester’s classes to the end of the semester.

Gola filed a lawsuit against the University. Among other theories of recovery, as a first cause of action, the operative complaint alleged a claim for unpaid wages on behalf of Gola and a class of similarly situated adjuncts. According to this claim, the assignment letters set out the terms of an employment contract only for the period specified in the letters, i.e., the teaching semester, and set a salary for that period only.

Yet adjunct faculty were required to work outside that period to prepare syllabi and course materials before classes started, and to grade exams and submit final grades after classes ended, and they were not paid for their time outside the assignment period.

As a second cause of action, the operative complaint alleged that the University failed to issue wage statements in compliance with Labor Code section 226(a) because adjuncts’ wage statements did not include the total hours worked during the pay period and the effective hourly rate.

Finally, Gola asserted a derivative claim under the Private Attorneys General Act (PAGA) (§ 2698 et seq.) seeking civil penalties for the Labor Code violations asserted in counts one through three.

As an affirmative defense, the University asserted that Gola’s claims were preempted by The federal Labor Management Relations Act (LMRA) (29 U.S.C. § 141 et seq.). which preempts all state-law claims that require interpretation of a CBA.

This affirmative defense was bifurcated and tried to the court. Following the bench trial, the trial court issued a statement of decision holding that Gola’s first and third causes of action were indeed preempted because these claims could not be resolved without interpreting the CBA.

With respect to Gola’s second cause of action, the wage statement claim, the trial court determined this claim was not preempted by federal law. The wage statement claim proceeded to a bench trial on the merits. The trial court found that the wage statements the University issued to adjunct faculty did not include the “total hours worked by the employee” or the employee’s effective hourly rate. The trial court calculated statutory damages of $1,621,600 and PAGA penalties of $545,235. The trial court later issued an order awarding Gola $1,307,225.95 in attorneys’ fees and $21,510.23 in costs.

The University timely appealed the judgment, and Gola cross-appealed. The Court of Appeal affirmed the judgment in the published case of Gola v University of San Francisco – SF-A161477 (April 2023).

After the trial court issued its statements of decision and judgment, however, the Legislature enacted Labor Code section 515.7, which provides that faculty at nonprofit higher education institutions “shall be exempt” from the provisions of Labor Code section 226, subdivision (a)(2) and (9), provided they are employed in a professional capacity as defined in the statute, and provided they are paid a salary that meets at least one of three tests for minimum compensation (salary tests).

Among the various issues raised on appeal, the University contends that newly enacted Labor Code section 515.7 should be applied retroactively to this case. If it is so applied, the University contends, Gola’s section 226 claims must fail because Gola and the subclass will be classified as exempt for the relevant period.

The Court of Appeal noted that Labor Code Section 515.7 is plainly intended to create a pathway to accord adjunct faculty exempt professional status and relieve nonprofit universities of hour and pay reporting requirements for adjuncts, provided adjuncts’ pay meets one of the three salary tests. But the statute does not directly speak to whether it reaches back to hour and pay reporting obligations incurred before September 9, 2020 when it was adopted as an urgency measure, and thus taking effect that day.

The Court concluded “This silence in itself strongly indicates prospective application. Moreover, we find in the text of the statute itself an additional indication of prospective application…”

The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system.

The Institute just released a 113 page Draft Evidence Report assessing the comparative clinical effectiveness and value of exagamglogene autotemcel (“exa-cel”, Vertex Pharmaceuticals and CRISPR Therapeutics) and lovotibeglogene autotemcel (“lovo-cel”, bluebird bio) for sickle cell disease. This preliminary draft marks the midpoint of ICER’s eight-month process of assessing these treatments, and the findings within this document should not be interpreted to be ICER’s final conclusions.

The world’s first CRISPR-based gene-editing therapy appears to be nearing the market. And an influential drug cost watchdog has an early idea of how the treatment should be priced to be considered cost-effective in sickle cell disease (SCD).

Vertex and CRISPR Therapeutics’ gene editing-based exa-cel – and bluebird bio’s gene replacement therapy lovo-cel – can be priced up to $1.93 million to be cost-effective, the Institute for Clinical and Economic Review said in a draft report (PDF) published Wednesday. The figure accounts for the drugs’ net prices after discounts and rebates.

The report comes shortly after Vertex and CRISPR last week said they had completed their rolling FDA applications for exa-cel in SCD and beta thalassemia with a request for priority review. If approved, exa-cel would become the first therapy based on the Nobel-winning CRISPR technology.

“Sickle cell disease can affect nearly every organ system in the body, and severe sickle cell disease affects nearly every aspect of a person’s life,” said ICER’s Chief Medical Officer, David Rind, MD. “From the earliest days of gene therapy, patients, families, and clinicians have imagined that someday it might be possible to address the underlying genetics of sickle cell to achieve a cure. These first two genetic therapies, using different technologies and altering different genetic targets may mean that day has nearly arrived.”

The prevalence of sickle cell disease is unknown, but CDC estimates place it at about 100,000 cases in the U.S. It is a blood disease that can spur chronic complications among all organs, and annual healthcare costs rack up to $2.98 billion, the ICER said.

The model developed to generate cost-effectiveness findings in ICER’s draft report used cutting-edge evidence from academic researchers and was informed by what matters to patients.  

Through collaborative input from patients, clinicians, health economists, payers, and manufacturers, ICER’s draft model not only includes the projected health benefits and cost offsets from reducing the acute events as measured in the clinical studies but also includes the projected benefits from eliminating the fear of future acute events, reductions in chronic events and mortality, health equity considerations, and reductions in lost productivity and caregiver burden.

Two proposed gene therapies for sickle cell disease (SCD) are each worth up to $1.9 million, according to an April 12 draft evidence report from the Institute for Clinical and Economic Review.Given that both gene therapies offer the promise of a potential cure, ICER compared them with standard of care over a lifetime.

The health economics reviewers figured the two therapies could cost between $1.58 million to $1.72 million under commonly used cost-effectiveness thresholds that only look at benefits within the healthcare system. The range goes up to between $1.79 million to $1.93 million when considering broader societal value.

Gene therapies typically cost multiple millions of dollars per treatment. Bluebird recently launched Zynteglo, a sister med to lovo-cel, at $2.8 million. Zynteglo is approved for beta thalassemia, a rare blood disorder that affects about 1 in 100,000 individuals.

It’s not immediately clear how bluebird or Vertex-CRISPR will price their therapies. A Vertex spokesperson said the company is still reviewing the report. In a separate statement, a bluebird spokesperson said the company hasn’t set a price for lovo-cel and is currently focused on completing its FDA application.

During an interview with Fierce Pharma, ICER’s chief medical officer, David Rind, M.D., stressed that the cost-effectiveness analyses are preliminary and may change. ICER is gathering public comments until May 9 and pushed back its final report publish date to July 13 in anticipation of more data on exa-cel.

Each year the California Chamber of Commerce releases a list of job killer bills to identify legislation that it says will decimate economic and job growth in California. Earlier this month, CalChamber released its 2023 Job Killer List which includes bills dealing with labor and employment issues, taxation, housing costs, and climate and energy policies, and it expects several additions to the list in the coming weeks.

The CalChamber has named the following as job killer bills for 2023 under the category of Labor and Employment, along with it’s summary of the impact on employers and jobs that they expect.

– – AB 524 (Wicks; D-Oakland) Expansion of Litigation Under FEHA. Exposes employers to costly litigation under the Fair Employment and Housing Act by asserting that any adverse employment action was in relation to the employee’s family caregiver status, which is broadly defined to include any employee who contributes to the care of any person of their choosing, and creates a de facto accommodation requirement that will burden small businesses.

– – AB 1156 (Bonta; D-Alameda) Expands Costly Presumption of Injury. Significantly increases workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace and establishes an extremely concerning precedent for expanding presumptions into the private sector.

– – SB 525 (Durazo; D-Los Angeles) Costly Minimum Wage Increase. Imposes significant cost on health care facilities and any employer who works with health care facilities by mandating increase in minimum wage to $25.

– – SB 365 (Wiener: D-San Francisco) Undermines Arbitration. Discriminates against use of arbitration agreements by requiring trial courts to continue trial proceedings during any appeal regarding the denial of a motion to compel, undermining arbitration and divesting courts of their inherent right to stay proceedings.

– – SB 399 (Wahab; D-Hayward) Bans Employer Speech. Chills employer speech regarding religious and political matters, including unionization. Is likely unconstitutional under the First Amendment and preempted by the National Labor Relations Act.

– – SB 616 (Gonzalez; D-Long Beach) Costly Sick Leave Expansion on All Employers. Imposes new costs and leave requirements on employers of all sizes, by more than doubling existing sick leave mandate, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply.

– – SB 627 (Smallwood-Cuevas) Onerous Return to Work Mandate. Imposes an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants, movie theaters, and franchisees, which will delay hiring and eliminates contracts for at-will employment.

– – SB 723 (Durazo; D-Los Angeles) Onerous Return to Work Mandate. Imposes an onerous and stringent process for specific employers to return employees to the workforce for specified industries, including hotels and restaurants that have been disproportionally impacted by this pandemic, and removes guardrails on existing law by making mandate permanent and significantly broadening the applicability of the law.

– – SB 809 (Smallwood-Cuevas; D-Los Angeles) Prohibits Consideration of Conviction History in Employment. Prohibits nearly every employer from considering conviction history of an applicant or existing employee in employment decisions and imposes cumbersome process on employers that are legally not allowed to hire individuals with certain convictions.

“California’s robust private sector economy creates and maintains more than 17 million jobs, paying $1.6 trillion in annual wages and salaries,” said CalChamber President and CEO Jennifer Barrera. “Yet, cost pressures, workforce challenges, litigation threats, and California’s pernicious housing shortage are an ever-present threat to our continued success. Costly policies – like the ones on CalChamber’s job killer list – stifle job creation, reduce investment in our economy, and drive outward migration. Job killing policies make California unattractive both to current employers and entrepreneurs who, incidentally, generate the preponderance of the state’s tax revenue, and to those who might want to come here to invest in our future economy.”

The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state. Over the last five years, the outcome of bills on the past Job Killer Lists were as follows:

– – 2022: 19 Job Killers identified, 2 sent to Governor Gavin Newsom, 2 signed;
– – 2021: 25 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2020: 19 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2019: 31 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2018: 29 Job Killers identified, 1 sent to Governor Edmund G. Brown Jr., 1 vetoed;
– – 2017: 27 Job Killers identified, 3 sent to Governor Brown, 2 signed, 1 vetoed;

48 year old Carlos Orlando Chacon M.D., was initially charged in late 2021 with involuntary manslaughter and other charges, along with Heather Vass, one of his nurses, in the death of Megan Espinoza, a 36-year-old mother of two who died more than a month after undergoing a breast augmentation operation at Divino Plastic Surgery in Bonita, California on Dec. 19, 2018.

San Diego County Prosecutors said Espinoza was provided anesthesia by Vass, a nurse who was not trained to do so. The patient went into cardiac arrest during the operation and Chacon allegedly delayed contacting emergency services for about three hours.

Chacon was previously released on his own recognizance under a number of conditions, but was arrested and jailed last week. Years after he was charged with involuntary manslaughter in the death of the 36-year-old mother of two, California authorities have now charged Dr. Chacon with second-degree murder for Megan’s death.

Deputy District Attorney Gina Darvas said Monday that further investigation into the case yielded additional information that led to the filing of the murder charge, including allegations that Chacon ordered his staff not to call 911 when Espinoza’s condition declined and that he instructed staff to lie to Espinoza’s husband regarding her condition.

The April 6, 2023 probable cause warrant outlines the results of the investigation the Medical Board of California provided the San Diego County District Attorney’s Office, and what further investigation disclosed about the death. A complaint was filed with the Medical Board by one of the paramedics who transporter Espinoza because of concerns that Dr. Chacon had waited almost 3 hours to call 911 to request emergency medical assistance, which is standard protocol when CPR is performed, as defined by the American Heart Association.

Court documents claim that Chacon did not contact 911 to request emergency assistance until approximately 3 hours after Espinoza’s cardiac arrest. Paramedics arrived and Espinoza was transported to Scripps Hospital, in Chula Vista.

Upon her arrival at the hospital, doctors intubated Espinoza to establish a secure airway and placed her on a ventilator. Doctors discovered she had a pressure induced pneumothorax as a result of prolonged and aggressive bagging. Espinoza had also sustained undue stress to her heart as a result of the prolonged bagging.

Espinoza was admitted to the Intensive Care Unit of Scripps Hospital. A chest tube was inserted and over the next five days Espinoza’s pulmonary function improved. However, her neurological function remained critical.

Espinoza was transferred to UCSD Medical Center’s Neurological Intensive Care Unit, where her condition continued to deteriorate. Physicians notified Espinoza’s husband and mother that she was not expected to regain neurological function. The family chose to place Espinoza on palliative/compassionate care.

Espinoza never regained consciousness, or the ability to breath on her own. Espinoza passed away on 01/28/19. An autopsy was performed. The autopsy determined the cause of death to be, “lschemic Encephalopathy due to resuscitated cardiac arrest following anesthesia for elective surgery.” lschemic Encephalopathy is defined as a brain dysfunction caused by a lack of blood flow and oxygen to the brain.

Two medical experts were consulted by the Medical Board. Both provided the opinion that Dr. Chacon’s handling of Espinoza’s surgical procedure was an extreme departure or deviation of the standard of care.

The District Attorney’s Office investigation continued after the original charges were brought. This lead prosecutors to claim that “Chacon began a pattern of conscious disregard for human life prior to beginning Megan Espinoza’s surgery.” and that as a result “probable cause exists to believe Chacon is allegedly guilty of PC 187(a) Second Degree Murder with Malice Aforethought.”

Mr. Espinoza stated in sworn testimony, in the related civil case, that he had been present when Mrs. Espinoza discussed anesthesia with Chacon. Chacon told Mrs. Espinoza that an anesthesiologist who had privileges with two different Sharp Hospital locations would be coming to Divino to provide the anesthesia, which was not what happened.

The transcript of Chacon’s sworn testimony during the civil deposition revealed that Chacon admitted Heather Vass administered the anesthesia, and that he did not specifically direct Nurse Vass what medications and dosages she should administer to Espinoza during the surgery. Instead, Chacon provided Vass with a two-page chart that listed drugs and dosage amounts that Vass could use during every surgery in which she provided anesthesia services for Chacon.

Vass confirmed in her deposition that Chacon did not give her any verbal or written instructions regarding any of the medication and dosages she charted on the Nursing Note. She independently made those decisions.

Dr. Michael Dinh and Dr. Jesus Lozano, were two anesthesiologists whom Chacon contacted by phone for advice after Espinoza’s cardiac arrest. When prosecutors interviewed Dr. Dinh, they were told that a registered nurse is not allowed to pick and choose the drugs and dosages and administer them to a patient. They can only act upon a physician’s orders that are tailored to the specific patient’s needs.

Investigators noted that videos taken by Chacon during Espinoza’s surgery showed that Chacon used a sterile drape, which blocked Chacon’s view of what Heather Vass was doing during the surgery. And witness Zenia De Los Santos, who was in the surgical room during Espinoza’s procedure, stated Chacon was playing loud music during the procedure that made it difficult for anyone in the room to hear what the others were saying, or to hear any auditory warnings from the surgical monitor.

Prosecutors say Chacon did not call 911 until 3 hours after Espinoza’s heart stopped. During that time, Vass was using the Ambu bag to assist Espinoza with her breathing. She never regained consciousness.

Coworker, Zenia De Los Santos, described ineffective efforts at resuscitation, and about feeling overwhelmed and abandoned by Chacon who left the operating room for prolonged periods of time during the three hour resuscitation effort. She claims she and her coworkers were told by Chacon not to call 911 until instructed to do so. De Los Santos also told investigators that finally at 5:00 the office was ready to close, and about 30 minutes later, after everyone was gone, the ambulance arrived. By then, it was much too late to save her.

Chacon allegedly saw at least four other patients in the hours after Espinoza’s cardiac arrest but before he called 911 at 5:24 p.m. and was described as acting “robotic” during that time-frame – “as if he wasn’t concerned,” as the warrant put it. Nor did he tell Megan Espinoza’s husband about her condition until 5:41 p.m., documents alleged.

The warrant concluded that Chacon had displayed the kind of deliberate inaction with conscious disregard for human life required for a charge of second-degree murder committed with implied malice.

His criminal defense attorney Marc Carlos told a local news station that the charges against Chacon are unsupportable.

In December 2022, KGTV reported that Megan’s family had reached a settlement in a lawsuit against Chacon.

Coast Restaurant Group, Inc. operates the Cedar Creek Inn, a restaurant in North Orange County, which offers a variety of fine food, an extensive wine list and craft beer, and live musical performances from Tuesday through Saturday.

It obtained business interruption insurance from AmGUARD Insurance Company, covering the period from March 30, 2019 to March 30, 2021. Business interruption insurance “protects against the loss of income and other losses caused by an interruption to the normal operations of the business.”

On March 17, 2020, the Orange County health officer issued an order that, among other things, “prohibited restaurants from serving food on their premises and prohibited all gatherings of people.” The next day, the county health officer issued an amended health order and guidance requiring “[a]ll restaurants and other business establishments that serve food shall close all onsite [sic] dining.”

The Restaurant submitted a claim for its business income loss. The was denied by AmGUARD Insurance Company.

Coast Restaurant Group subsequently filed a lawsuit against their carrier. The First Amended Complant (FAC) asserted that the restaurant “did not lose any business income as a result of virus contamination,” but rather its “losses of business income were caused by, and a direct result of, government stay-at-home orders in California.” The Restaurant attached a copy of the insurance policy and also attached the governmental orders restricting on-site gatherings at restaurants to its FAC.

The carrier demurred to the FAC. contending that the insurance policy does not cover “losses arising from the COVID-19 virus, including government[al] directives issued in response to the virus.”

Separately, respondent contended that appellant did not allege any “direct physical loss or damage to” the covered property because governmental orders limiting the use of respondent’s property do not amount to “direct physical loss of or damage to property.” Respondent further asserted the “Ordinance or Law” exclusion precludes coverage for “losses arising from government-imposed use restrictions.”

The trial court sustained the demurrer without leave to amend. The Court of Appeal affirmed in the published case of Coast Restaurant Group, Inc. v. AmGUARD Insurance Company – G061040 (April 2023).

In essence, the Court of Appeal concluded that Coast Restaurant has shown there is potential coverage under the policy, but AmGUARD Insurance Company has shown that an exclusion in the policy applies to preclude coverage as a matter of law.

While physical alteration to covered property could trigger coverage under a “physical loss or damage” insuring provision, that is not the only possible trigger for coverage. Deprivation or dispossession also would trigger coverage, even if the property has not been physically altered.

However, under the ordinance or law exclusion, “loss or damage caused directly or indirectly by . . . enforcement of any ordinance or law . . . [that regulates] the construction, use or repair of any property” are not covered.

The governmental orders at issue clearly regulate the use of covered property by prohibiting on-site dining. Accordingly, the ordinance or law exclusion would apply to preclude coverage.

In the alternative, the virus exclusion applies to deny Coast Restaurant Group coverage for its business income loss. The policy does not cover “loss or damage caused directly or indirectly by” “[a]ny virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

Thus the Court of Appeal concluded that, at a minimum, COVID-19 triggered the governmental orders and it “indirectly” caused appellant’s business income loss. The virus exclusion thus applies here.