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No “Defacto Cap” on $13M Noneconomic Damages in LAPD Case

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Stephen Glick and Alfred Garcia, both Los Angeles Police Department officers, arrested and transported a suspect, Raul C., to the police station in January 2017 after he drove drunk and struck a child with his car. While in custody, Raul required emergency medical treatment for acute alcohol poisoning, and he later filed a complaint alleging that unknown officers shaved his eyebrows and mustache to resemble Adolf Hitler and wrote a slur and drew on his abdomen with marker. LAPD’s Internal Affairs division launched a major investigation, obtained search warrants for Glick and Garcia’s cell phones, lockers, and vehicles, and searched their female partners’ cell phones as well, though not their lockers or cars. Internal Affairs could not identify who committed the battery and recommended that allegation be adjudicated “not resolved”; as to the separate failure to promptly seek Raul medical care, it recommended a short suspension for Garcia and reprimands for Glick and both partners.

The police chief rejected those recommendations and instead relieved Glick and Garcia from duty pending a Board of Rights hearing to terminate their employment, confining them to their homes absent prior approval to leave. The chief later canceled that hearing and issued only official reprimands for the medical-care delay, again adjudicating the battery allegations as “not resolved.” When a police union representative complained about the disparity between how Glick and Garcia, both men, were treated compared to their female partners, a high-ranking LAPD official responded that “this is something guys would do, not females.”

Glick and Garcia sued the City of Los Angeles for gender discrimination and retaliation under the Fair Employment and Housing Act. Before trial, both plaintiffs stipulated under Code of Civil Procedure section 2032.320 that they were not claiming emotional distress beyond that usually associated with the underlying physical injuries and would not offer expert testimony on the point, a stipulation that avoids a defense-requested mental examination. The jury found for both plaintiffs on both causes of action, awarding Glick $8,621,358 (including $8 million in past and future noneconomic damages plus $621,358 in future lost earnings) and Garcia $4.5 million in noneconomic damages, and judgment was entered accordingly in September 2023.

The City moved for a new trial, arguing the noneconomic damages were plainly excessive; it did not challenge Glick’s economic damages award in that motion. The Los Angeles County Superior Court granted the motion conditionally, offering plaintiffs a choice between a new trial or accepting sharply reduced awards: $250,000 for Glick and $125,000 for Garcia, both reflecting only past and future noneconomic damages, with Glick’s entire $621,358 economic damages award eliminated. The court characterized the trial evidence as “scant” given the absence of any psychologist, psychiatrist, or treating physician testimony, and separately found Glick’s testimony about accelerating his retirement plans “completely speculative and thus inadmissible.” Plaintiffs rejected the reduced awards and appealed from the new trial order; the City filed a protective cross-appeal from the underlying judgment.

In the published case of Glick et al. v. City of Los Angeles, No. B334953 (Cal. Ct. App., 2d Dist., Div. 2, August 2026) — the Court of Appeal reversed the order granting a new trial and reinstated and affirmed the original September 2023 judgment in full.

Writing for a unanimous panel, Justice Goorvitch reviewed the new trial order for abuse of discretion, noting that once a trial court grants a new trial for excessive damages, the ordinary presumption favoring a jury’s verdict flips to favor the trial court’s order — but that presumption applies only where the trial court’s exercise of discretion is legally sound in the first place, citing Toshiba America Electronic Components v. Superior Court (2004) 124 Cal.App.4th 762 and Pearl v. City of Los Angeles (2019) 36 Cal.App.5th 475.

On noneconomic damages, the panel held the trial court’s own summary of the evidence contradicted its characterization of that evidence as “scant.” The trial court itself recounted detailed testimony from Glick about his distress during the investigation, his difficulty getting out of bed, his fear for his family’s finances as a new father, his blocked career path, and a relapse into alcoholism serious enough to prompt a call to an LAPD helpline, as well as similarly detailed testimony from Garcia about the embarrassment of being benched for the only time in his career, the effect on his marriage, and his decision to hide the situation from his daughters to preserve his role-model status. The panel held expert testimony is required only where emotional distress falls outside jurors’ common experience, citing Knutson v. Foster (2018) 25 Cal.App.5th 1075 and Campbell v. General Motors Corp. (1982) 32 Cal.3d 112, and found nothing about this “garden-variety” distress testimony beyond ordinary jurors’ understanding.

The panel also held the trial court committed legal error by treating a party’s discovery stipulation under section 2032.320 as an implicit cap on recoverable damages, reasoning from its own experience that such stipulations “rarely exceed a low five-figure range” and that only “extraordinary” cases reach “a very low six-figure range.” The panel explained that section 2032.320’s stipulation mechanism governs only whether a defendant may compel a mental examination; it says nothing about the ceiling on a jury’s damages award, and no fixed numerical ceiling exists for noneconomic damages generally, citing Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308. Because the trial court effectively adopted just such a ceiling despite disclaiming any intent to do so, its order rested on an error of law and could not stand.

On Glick’s economic damages, the panel held the trial court confused admissibility with credibility. Glick testified that the City’s actions led him to plan retirement at 50 rather than 55, and a forensic economist quantified the resulting $621,358 lost-earnings gap; the trial court excluded this as “speculative,” but the panel explained a percipient witness may testify to facts within personal knowledge, including his own future plans, with any uncertainty about whether he will follow through going to weight rather than admissibility. Because the jury was entitled to credit that testimony alongside the unchallenged expert calculation, substantial evidence supported the award, and the trial court’s stated ground for eliminating it reflected legal error rather than a permissible exercise of discretion.

Turning to the City’s protective cross-appeal, the panel declined to independently reduce the awards even applying the deferential standard that would otherwise govern direct appellate review of a jury verdict. Noting the City identified no inflammatory evidence, misleading instructions, or improper argument that might taint the verdict, and that a reviewing court will not deem a noneconomic damages award excessive merely because it is large or exceeds awards in other cases, citing Bertero v. National General Corp. (1974) 13 Cal.3d 43, the panel held the jury was entitled to credit plaintiffs’ detailed testimony about the toll of the City’s conduct and to award damages accordingly.

Concluding the trial court abused its discretion by granting a new trial on legally erroneous grounds, and finding no independent basis to disturb the jury’s verdict on the City’s cross-appeal, the panel reversed the new trial order, reinstated and affirmed the original judgment, and awarded plaintiffs their costs on appeal.

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Pew Research Provides Public Input for AI Use in Comp Healthcare

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Two new Pew Research Center studies released August 25, 2026 offer the clearest public-opinion picture yet of how Americans feel about artificial intelligence in their medical care — and the findings land in a California workers’ compensation system where AI-assisted medical review is already a live regulatory question. Both studies draw on the same survey of 3,488 U.S. adults conducted June 22–28, 2026, through Pew’s American Trends Panel.

The first report, Americans want transparency when AI is used in their healthcare, found that 72% of U.S. adults consider it extremely or very important that a doctor or other healthcare provider tell them when AI is being used in their care, with majorities saying so across every age, gender, education, and racial group surveyed.

Crucially for anyone administering medical review, the demand for disclosure tracks how directly a task affects clinical decisions. Roughly eight in ten say they should be told when AI is used to analyze medical scans (81%), make a diagnosis (81%), or explain lab results (80%). Support drops but stays substantial for background tasks: 72% for AI note-taking during an appointment, 64% for prescription refill ordering, and 56% for appointment scheduling — the only task where a meaningful share (33%) said disclosure isn’t necessary.

Americans also report feeling out of the loop. A 53% majority say they have little or no say over whether a provider uses AI in their care, and respondents were three times as likely to want more input as to say they’re comfortable with the input they have (63% vs. 21%). Nearly half (46%) simply don’t know whether AI has been used in their own care at all; only 16% say it has. Even among those who know AI was used, just 22% say they understand well how it was used, while 32% say they don’t understand it well.

The companion report, From Diagnoses to Treatments, Why Americans Use AI Chatbots for Health, shows a parallel trend from the patient side: 34% of U.S. adults now use AI chatbots for at least one health-related purpose. A quarter (25%) use them to figure out what’s causing symptoms, 28% for speed, 22% to learn more about a doctor’s diagnosis, 22% for treatment information, 20% to understand lab results, and 15% to decide whether to see a doctor at all. Another 18% turn to chatbots for health topics they’re uncomfortable discussing with a person, and 22% cite low or no cost as a motivation.

Users find the results useful: 47% say chatbot health information is extremely or very helpful and another 48% say somewhat helpful, with only 5% finding it unhelpful. But comfort with data-sharing is split roughly evenly — 29% are extremely or very comfortable sharing personal health information with a chatbot, 26% are not, and 42% land in the middle.

Does this map onto UR, IMR, and QME/AME? The short answer is that it maps onto the utilization review and independent medical review side quite directly, and onto the QME/AME side more as an emerging question than a settled one.

California has already legislated on the UR question. Senate Bill 1120, the Physicians Make Decisions Act, took effect January 1, 2025 and directly regulates AI in utilization review and utilization management for health care service plans and disability insurers. It does not ban AI, but it requires that a determination of medical necessity be made only by a licensed physician or licensed health care professional competent to evaluate the specific clinical issues, after reviewing the requesting provider’s recommendation and the patient’s individual clinical circumstances; that AI not deny, delay, or modify services based in whole or in part on medical necessity; that AI analysis not rest solely on group datasets; and that plans disclose how AI tools are used in their utilization review policies. In other words, California law already treats AI in UR as a decision-support tool rather than a decision-maker — which is essentially the arrangement Pew’s respondents say they want, provided they’re told about it.

A companion statute, Assembly Bill 3030, also effective January 1, 2025, addresses the transparency question head-on for clinical communications: health facilities, clinics, physician’s offices, and group practices using generative AI to produce written or verbal patient communications about clinical information must include a prominent disclaimer that the communication was AI-generated, plus clear instructions for reaching a human provider. Critically, that requirement drops away entirely if a licensed human provider reads and reviews the communication before it goes out — a design choice that mirrors the intuition in Pew’s data, where disclosure demand rises with the degree to which AI is actually shaping the medical output rather than assisting a human who remains accountable.

Where the fit is looser is the workers’ compensation-specific machinery. SB 1120 amends the Knox-Keene Act and the Insurance Code, which govern group health plans and disability insurers — not Labor Code section 4610, which governs workers’ compensation utilization review, nor the IMR process under section 4610.5 that resolves UR disputes through Maximus’s independent reviewers. AB 3030 similarly reaches health facilities and physician practices, not the medical-legal evaluation process. Whether and how those statutes’ principles extend to comp UR, IMR, or QME and AME reporting is not settled by their text, and RAND’s recent DIR-funded review of California’s UR system did not address AI-assisted review at all — a gap worth noting given that the same report recommended DIR build out standardized UR data infrastructure it currently lacks.

For QME and AME practice, the chatbot findings raise a distinct issue evaluators are likely to encounter with increasing frequency: injured workers arriving at evaluations having already used AI to interpret their own symptoms, imaging, or lab results, and sometimes to form expectations about diagnosis, causation, or work restrictions before the evaluation begins. With a third of adults using chatbots for health and use running highest among younger workers — the demographic filing the largest share of comp claims — that dynamic is likely to shape the evaluation encounter itself, independent of whether the evaluator uses any AI tool.

And on the evaluator side, the question of whether a QME or AME may use AI to assist in drafting a medical-legal report, and whether that use must be disclosed, remains substantially unaddressed by California’s existing AI health statutes or by DWC regulation. Given that a medical-legal report is a formal evidentiary document rather than a patient communication, and that the Board has already sanctioned an attorney in a workers’ compensation matter this year for filing AI-fabricated case citations without verification, the disclosure and verification norms now settling into legal practice may well arrive in the medical-legal context before regulators formally address them.

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For Differing Reasons – Supreme Court Affirms Mayor v WCAB

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Joseph Mayor suffered an industrial injury in December 2013 while working for Ross Valley Sanitation District (Ross Valley). A workers’ compensation judge (WCJ) later found Mayor totally and permanently disabled and issued an award in his favor. On March 23, 2023, Ross Valley timely filed a petition for reconsideration of that award with the Workers’ Compensation Appeals Board (Board). At the time, former Labor Code section 5909 provided that a petition for reconsideration “is deemed to have been denied” by the Board “unless it is acted upon within 60 days from the date of filing.” The WCJ never acted on the petition as required by regulation, and the Board itself took no action within the 60-day window. Seventy-four days after filing, Ross Valley sent a single inquiry letter asking about the petition’s status; the record does not show the Board ever responded.

One hundred forty-four days after the petition was filed, the Board issued an order granting reconsideration, attaching a “Shipley notice” (referencing Shipley v. Workers’ Comp. Appeals Bd. (1992) 7 Cal.App.4th 1104) stating that the Board had not received notice of the petition until around June 15, 2023, roughly 84 days after filing, and that its order would be considered timely if issued within 60 days of that later receipt date. Mayor petitioned the Court of Appeal for a writ of mandate seeking to rescind the Board’s order as untimely and to enforce the WCJ’s original award. While that petition was pending, the Board rescinded and reissued its order, this time explicitly invoking Shipley to justify tolling its own deadline based on an unspecified “administrative irregularity” in receiving the petition — a practice the Board said preserved due process and its constitutional mandate to achieve substantial justice.

Also while the matter was pending, the Legislature passed Assembly Bill 171, amending section 5909 (effective as an urgency measure, later made permanent) to run the Board’s 60-day deadline from the date a trial judge transmits a case to the Board, rather than from the date of filing. The Court of Appeal granted Mayor’s writ petition, holding that the version of section 5909 in effect at the time was mandatory and that the Board exceeded its jurisdiction by granting reconsideration more than 60 days after the petition’s filing. The court followed Zurich American Ins. Co. v. Workers’ Comp. Appeals Bd. (2023) 97 Cal.App.5th 1213, which had reached the same conclusion on similar facts, and read the Legislature’s subsequent amendment as tacit acquiescence in that interpretation. (Mayor v. Workers’ Comp. Appeals Bd. (2024) 104 Cal.App.5th 1297.) The California Supreme Court granted review, and, while review was pending, deferred several other cases raising the same issue, including one, City of Salinas v. Workers’ Comp. Appeals Bd., that had reached the opposite conclusion on whether the deadline is jurisdictional.

In the present case of Mayor v. Workers’ Compensation Appeals Board, No. S287261 (Cal. Sup. Ct., August 2026) — the California Supreme Court affirmed the judgment of the Court of Appeal granting Mayor’s petition for writ of mandate. However it was for somewhat different reasons.

A unanimous Supreme Court first addressed whether former section 5909’s 60-day deadline implicated the Board’s fundamental jurisdiction — a status that, unlike an ordinary mandatory deadline, cannot be waived, forfeited, or excused by equitable considerations. Applying the framework from Kabran v. Sharp Memorial Hospital (2017) 2 Cal.5th 330 and Law Finance Group, LLC v. Key (2023) 14 Cal.5th 932, the Court explained that a deadline is jurisdictional only where the Legislature signals that intent through unusually emphatic language, not merely by setting an exception-free deadline. The Court found no such language in former section 5909, contrasting it with neighboring provisions the Court has held are jurisdictional — section 5900’s requirement that petitions “shall be made only within the time and manner specified,” and section 5950’s 45-day deadline to seek judicial review “within the time limit specified in this section.” Because former section 5909 contained no comparably emphatic language and the Board’s continuing jurisdiction over its own awards is otherwise broadly preserved by section 5803 (limited only by a five-year outer boundary in section 5804), the Court held the 60-day deadline is mandatory but not jurisdictional in the fundamental sense: the Board’s grant-for-study order after the deadline was in excess of its jurisdiction, not void for lack of fundamental power to act at all.

That conclusion did not end the analysis, since even a nonjurisdictional deadline can be closed to equitable tolling if the Legislature so intends. The Court held the Board’s practice of self-tolling its own deadline was unsupported by the statute’s text or purpose. Equitable tolling, the Court explained, is a doctrine that excuses a litigant’s late filing where the litigant gave timely notice, caused no prejudice, and acted reasonably and in good faith — elements that presuppose a party seeking relief from its own deadline, not an adjudicative body extending the time allotted for its own decision. The Board, the Court held, is neither a litigant nor a party, and former section 5909 is not a statute of limitations at all, since it does not fix a deadline for anyone to bring a claim; it simply caps how long the Board has to act. The Court found no precedent applying equitable tolling to an adjudicative body’s own decisional deadline, and held the statute’s plain text — deeming a petition denied by operation of law after 60 days, with no textual exception — was inconsistent with allowing the Board to extend that period on its own initiative.

The Court also limited the reach of Shipley itself, disapproving it to the extent it suggests a categorical due process right to Board review of any timely-filed petition regardless of the 60-day deadline. Shipley, the Court explained, never applied or even mentioned the equitable tolling doctrine; it turned instead on the due process problems created when the Board misplaced a claimant’s file and repeatedly, affirmatively assured him his petition would eventually be considered. The Board could not convert that narrow due-process holding into a general license to toll its own statutory clock whenever an “administrative irregularity” caused it to receive a petition late, particularly where, as here, Ross Valley itself never asserted any due process violation. The Court left open what circumstances might support a due process claim in a future case, but held none was properly before it here.

Finally, the Court held writ relief in the Court of Appeal was the proper vehicle for Mayor’s challenge, rejecting the Board’s argument that Mayor’s only remedy was a later petition for writ of review of a final decision on the merits. Because the Board had already asserted jurisdiction and ruled on the petition when Mayor filed his writ petition, and because forcing an injured worker to wait indefinitely for a final decision would render the 60-day deadline’s protection of an expeditious end to proceedings meaningless, the Court agreed a writ of mandate (more precisely, the Court noted in a footnote, one properly framed as a writ of prohibition) was available to enforce the Board’s ministerial duty to act, if at all, within the statutory window. The Court expressed no view on whether or how Ross Valley might now seek relief from the consequences of the Board’s untimely action, since Ross Valley had not requested any relief of its own before the Court.

In a confusing Footnote 4, the court stated “We express no opinion on the propriety of the grant-for-study practice or whether the Appeals Board is required to issue a final decision on the merits within the 60-day statutory period pursuant to section 5908.5.”

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Startup Chaired by Former US Senator Resolves Upcoding Case for $24M

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Monogram Health Professional Services PC and its parent, Monogram Health Inc., headquartered in Brentwood, Tennessee, have agreed to pay $2.4 million to resolve allegations that they violated the False Claims Act by causing false diagnosis codes to be submitted to inflate their Medicare Advantage payments. The U.S. Attorney’s Office for the Central District of California announced the settlement August 24, 2026.

Monogram provides in-home care to Medicare beneficiaries enrolled in Medicare Advantage plans, working under contracts with the Medicare Advantage Organizations (MAOs) — the private insurers, such as UnitedHealthcare or Humana, that administer those plans — that pay Monogram more when the patients in its care carry higher “risk scores.” Those risk scores come from CMS’s Hierarchical Conditions Category model, which pays MAOs more for beneficiaries expected to need costlier care based on the diagnoses their providers report; a diagnosis must be documented from an actual face-to-face visit and must have affected the patient’s care at that visit to count. Because Monogram’s own contracts tied its revenue to those same risk scores, the government says the company had a direct financial incentive to report additional diagnoses that inflated them.

Monogram Health Inc. was reportedly founded in 2019 by CEO Michael Uchrin, with backing from Frist Cressey Ventures, the venture firm co-founded by former U.S. Senate Majority Leader and heart-transplant surgeon Bill Frist, who chairs Monogram’s board. The company built its business around in-home, “value-based” care for patients with chronic kidney disease and other overlapping chronic conditions — a model that pairs nephrologists, cardiologists, and other specialists to manage complex patients at home rather than in a clinic, using what the company describes as AI-driven care planning. Monogram grew quickly on the strength of five funding rounds totaling more than $540 million, culminating in a $375 million Series C round in December 2022 led by CVS Health Ventures, Cigna Ventures, Memorial Hermann Health System, and Pura Vida Investments, with additional participation from Humana, TPG Capital, and SCAN Health Plan — a roster that includes several of the very insurers whose Medicare Advantage plans Monogram contracts with. By 2026, industry trackers estimated the company’s annual revenue at roughly $2.2 billion and its footprint at more than 500 employees operating across some 34 states.

The settlement covers the period from January 1, 2021 through December 31, 2023 and resolves allegations that Monogram knowingly submitted diagnosis codes in four specific categories that were not clinically accurate, not supported by the patient’s medical records, or did not actually affect the care given at the visit: HCC 21 (protein-calorie malnutrition), HCC 55 (substance use disorder), HCC 48 (coagulation defects and other blood disorders), and HCC 88 (angina pectoris, a form of chest pain linked to heart disease). Those inflated risk scores, the government says, caused CMS to pay the MAOs more than it should have.

This settlement appears to be Monogram’s first public False Claims Act resolution, but it lands the company squarely inside a pattern of intense federal scrutiny of exactly this kind of Medicare Advantage risk-adjustment coding across the industry in 2025 and 2026. In March 2026, CVS Health’s Aetna unit agreed to pay $117.7 million to settle DOJ allegations that it ran a chart-review program paying coders to find additional diagnoses that boosted patient risk scores, including diagnoses unsupported by medical records. HHS-OIG audits have separately flagged similar “upcoding” concerns at other Medicare Advantage plans, including a 2025 finding against Coventry Health Care of Missouri. Congressional advisers at MedPAC have estimated that upcoding across the industry inflates Medicare Advantage payments by roughly 10% annually relative to traditional Medicare, and the Committee for a Responsible Federal Budget has projected the cumulative overpayment could approach $600 billion over the next decade if unaddressed — figures that help explain why DOJ’s new Task Force to Eliminate Fraud and National Fraud Enforcement Division have made Medicare Advantage risk-adjustment fraud a recurring enforcement target this year, with Kaiser Permanente, Humana, and UnitedHealth Group’s Optum unit all facing related scrutiny in recent years as well. Notably, several of Monogram’s own investors, including CVS and Humana, operate Medicare Advantage plans that could themselves face exposure if a downstream provider’s coding practices inflate the risk scores those plans report to CMS — illustrating how closely intertwined the incentives are across the value-based care ecosystem Monogram operates within.

The case originated as a whistleblower, or qui tam, lawsuit filed by Dr. Ajay Gupta, a physician formerly employed by Monogram, captioned United States ex rel. Dr. Ajay Gupta v. Monogram Health Professional Services, et al., No. 2:22-cv-08758 MWF-JCx, in the U.S. District Court for the Central District of California. Under the False Claims Act’s qui tam provisions, a private individual with knowledge of fraud against the government can file suit on the government’s behalf and share in any recovery; Dr. Gupta will receive approximately $380,000 of the $2.4 million settlement.

As is standard in False Claims Act settlements, DOJ’s release states plainly that the claims resolved are allegations only, and the settlement includes no determination of liability or admission of wrongdoing by Monogram.

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August 24, 2026 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: EFAA Election Mid-Arbitration Ok for New Sexual Harassment Case. 10 States Warn of Fake WCJ or Attorney Comp Fraud Scam. Bay Area Couple Face Premium and Payroll Tax Fraud Charges. Gann Fire Triggers Insurance Policy Moratorium Under New Laws. San Francisco Amends Paid Parental Leave Ordinance. FAA Proposed Rule Targets California Meal and Rest Hour Break Law. Reliability of MRI? – Same Brain, Different Scanner, Different Result. VA Tops Healthcare System-Wide Pharmaceutical Costs Saving.

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Employer Waives Arbitration Right By Litigation Delay

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Michael Mitchell, Khiry Crawford, Tyler Echevarria, and Anthony McCune formerly worked for Lilac Solutions, Inc., a company that manufactures lithium-extraction technology. Each had signed an arbitration agreement upon accepting employment. On December 6, 2024, the four plaintiffs sued Lilac and five managerial employees with health-and-safety-related roles (collectively, the Lilac Defendants), alleging thirteen causes of action arising from claimed exposure to harmful chemicals, wrongful termination, and gender and disability discrimination, including five Fair Employment and Housing Act claims. The fifth cause of action, pleaded far more conclusorily than the other twelve, alleged sexual harassment.

Rather than immediately moving to compel arbitration, the Lilac Defendants answered the complaint, asserted their arbitration right only as an affirmative defense, and filed a cross-complaint and amended cross-complaint for trade secret violations, neither of which sought a stay of the case. Over the following three months, they served 12 sets of written discovery, noticed depositions of each plaintiff plus two third parties, served 11 nonparty subpoenas, responded to 33 sets of the plaintiffs’ own discovery requests, and filed seven procedural motions, including motions to seal, to designate the case complex, and for a protective order. Only after the plaintiffs filed an anti-SLAPP motion targeting the amended cross-complaint did the Lilac Defendants, five days later, file their motion to compel arbitration on March 18, 2025, arguing the EFAA did not apply because the sexual harassment claim was not plausibly pled.

The Alameda County Superior Court denied the motion to compel arbitration, finding the Lilac Defendants had waived their contractual right to arbitrate. Drawing on factors from Fleming Distribution Co. v. Younan (2020) 49 Cal.App.5th 73 and Kokubu v. Sudo (2022) 76 Cal.App.5th 1074, the court found the Lilac Defendants’ filing of a cross-complaint and amended cross-complaint without seeking a stay was inconsistent with invoking arbitration, that they had substantially invoked the litigation machinery before seeking arbitration, and that they had taken advantage of judicial discovery procedures unavailable in arbitration. The Lilac Defendants appealed.

In the published case of Mitchell et al. v. Lilac Solutions, Inc., et al., No. A173736 (Cal. Ct. App., 1st Dist., Div. 4, August 2026) — the Court of Appeal affirmed the trial court’s order denying the Lilac Defendants’ motion to compel arbitration.

Writing for a unanimous panel, Justice Streate first addressed the Lilac Defendants’ argument that the trial court relied on outdated law. Before the California Supreme Court’s 2024 decision in Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, California courts applied a six-factor test from St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187 that required the party opposing arbitration to show prejudice. Quach, following the U.S. Supreme Court’s reasoning in Morgan v. Sundance, Inc. (2022) 596 U.S. 411, abandoned that arbitration-specific prejudice requirement, holding waiver instead requires clear and convincing evidence that a party knew of its contractual right and intentionally relinquished it, based solely on the waiving party’s own words and conduct.

The panel held the trial court’s order was consistent with Quach even though it never cited the decision and predated it only by a matter of months, since courts presume a trial judge knows the governing law absent an affirmative indication otherwise, and nothing in the order relied on the prejudice component Quach eliminated. Because the trial court’s approach was legally sound, the panel applied deferential substantial evidence review rather than the de novo review the Lilac Defendants sought, distinguishing a case where a trial court’s order necessarily predated Quach and thus could not have applied it.

Applying that deferential standard, the panel found each of the three factors the trial court relied on well supported. Filing a cross-complaint and amended cross-complaint without seeking a stay reflected an intentional relinquishment of the right to arbitrate, particularly given the Lilac Defendants’ extensive discovery campaign over three months, which the panel found factually comparable to the litigation conduct that supported waiver in Quach itself. The panel rejected the argument that filing compulsory cross-claims excused this conduct, since the Lilac Defendants’ overall pattern of words and conduct, not just their pleadings, supported the trial court’s finding.

The panel devoted particular attention to the Lilac Defendants’ argument that the EFAA put them in an impossible bind, since existing authority holds that a single viable sexual harassment claim within a complaint renders an entire case nonarbitrable, and they needed time to develop facts undermining the harassment claim before a motion to compel could succeed. The panel found this explanation did not match the record: the scope of discovery went well beyond what a motion targeting the fifth cause of action alone would have required, and the Lilac Defendants never filed or signaled a forthcoming motion for summary adjudication on that claim during the three months before their motion to compel, which followed the plaintiffs’ anti-SLAPP motion by only five days. The panel noted the Lilac Defendants could have sought a stay of proceedings except for narrowly tailored discovery aimed at the harassment allegations, or invoked the trial court’s inherent authority to sequence the case efficiently, but did neither. On this record, the panel found the more natural reading was that the motion to compel arbitration was a reactive litigation countermove to the anti-SLAPP motion rather than a considered EFAA strategy, though the panel emphasized no finding of gamesmanship was necessary to affirm.

Concluding that clear and convincing evidence supported the trial court’s finding that the Lilac Defendants intentionally abandoned their right to arbitrate through their conduct in the case’s early months, the panel affirmed the order denying arbitration and awarded the plaintiffs their costs on appeal.

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RAND Reports on Senate Bill 1160’s Impact on Utilization Review

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The Division of Workers’ Compensation (DWC) announced August 19, 2026 that it has posted a new RAND Corporation report examining whether Senate Bill 1160 (2016) succeeded at its two original goals: reducing administrative burden on medical providers and speeding up timely, appropriate care for injured workers in the first 30 days after a work injury. The underlying RAND study, conducted by researchers Stephanie Rennane, Sara Heins, Danya Birnbaum, Matthew Forbes, Travis Hubble, and Michael Dworsky under a DIR-funded contract reportedly worth around $300,000, is the first empirical evaluation of the law since it took effect for injuries on or after January 1, 2018.

SB 1160 eliminated prospective utilization review (UR) for select treatments delivered in the first 30 days after a compensable injury — common early-stage care like physical therapy and initial X-rays — so long as the treatment was consistent with the Medical Treatment Utilization Schedule (MTUS) and delivered within an employer’s medical provider network. The law left several categories explicitly subject to prospective UR even within that first month: surgery, pharmaceuticals, imaging other than X-rays, psychological treatment, home health care, and a short list of other services the DWC has since designated by regulation, including several types of spinal injections.

To evaluate the law, RAND combined four data sources spanning January 2017 through January 2024 (one year before SB 1160 and six years after): individual-level treatment-authorization records from two large, unnamed claims administrators covering Northern and Southern California; audit data DIR’s Audit and Enforcement Unit compiles from randomly sampled authorization requests statewide; the state’s Independent Medical Review database, covering 276,119 disputed UR decisions; and medical billing data from the California Workers’ Compensation Information System, which the team mapped against 195 clinical practice guidelines to classify treatment as guideline-concordant or guideline-discordant. Both DIR’s release and RAND’s own executive summary frame the study around the same three questions: Did UR approval rates for early treatment requests change after SB 1160? Did injured workers become more likely to receive guideline-concordant care? Did they receive that care faster?

UR approval rates for treatment requested in the first 30 days after injury “consistently exceeded 90 percent both before and after SB 1160 took effect, with no statistically significant change.” That held true across nearly every treatment category studied, including physical therapy, pharmacy, imaging, consultations, surgery, durable medical equipment, occupational therapy, acupuncture, chiropractic care, immobilizers, and X-rays, in data from at least one of the two claims administrators. RAND attributes the flat approval rates to the same underlying cause: widespread “prior authorization” programs that let providers deliver routine early treatment without ever filing a formal authorization request at all. RAND’s review of 15 publicly posted UR plans found 13 already had such a program, frequently covering the exact treatments SB 1160 targeted, which is the report’s central explanation for why the law’s measured effect on approval rates was so small — for many claims administrators, there was little UR friction left to remove by 2018.

Where the law did move the needle was physical therapy specifically. DIR’s release states that among injured workers with diagnoses for which PT is recommended, “the odds of receiving physical therapy within 30 days were 13 percent higher following the implementation of SB 1160,” and that the average wait for a first PT visit fell from 13.4 days to 11.9 days — figures pulled directly from RAND’s findings. RAND’s fuller report adds that guideline-concordant use of braces and immobilizers rose more modestly (8% higher odds of receipt within 30 days, with no significant change in timing), and that guideline-concordant X-ray receipt showed no significant change at all, which the researchers attribute to X-rays already being commonly pre-authorized before the law.

RAND found a small but statistically significant increase in guideline-discordant acupuncture — acupuncture given for conditions where it isn’t recommended during the acute phase with the odds of receiving it 24% higher after SB 1160, though the overall rate remained low (under 3% of relevant cases throughout the study) and showed no corresponding drop in time-to-treatment, leading the researchers to call its practical significance limited. RAND also documented a small decline in MRI use (7% lower odds) after the law took effect, despite MRI being explicitly excluded from SB 1160’s reduced-review provisions and therefore not something the law should have directly affected; the researchers attribute this to unrelated secular trends, pre-existing changes at individual claims administrators, or COVID-19-era disruption rather than to the law itself, and use it as a caution against reading any post-2018 change as automatically caused by SB 1160.

RAND’s analysis found that the treatment categories excluded from SB 1160 — particularly imaging and psychiatric or psychological services — have substantially lower approval rates than the categories the law already covers, and that most UR activity and denials occur after the 30-day window SB 1160 addresses, not within it. On that basis, RAND recommends DIR: (1) systematically document and standardize the informal prior-authorization exemptions that vary widely across claims administrators; (2) examine whether streamlined UR treatment should extend beyond the first 30 days or be targeted by treatment type and strength of clinical evidence, rather than tied to a fixed time window, since that may better match where UR actually constrains care; and (3) invest in standardized, systemwide UR data infrastructure, since the researchers found no comprehensive database of UR decisions existed and had to reconcile incompatible formats from just two cooperating claims administrators to conduct the study at all.

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August 17, 2026 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Counties Not Pension Boards Control Retirement Pay and Classifications. CHP Officer’s Dishonesty Dismissal Reduced to One-Year Suspension. Employer’s Narrowly Worded Arbitration Clause Not Enforceable. Is Subrogation Available in Injured Federal Worker Malpractice Cases. No Loss of Consortium for Spouses of Injured Jones Act Seamen. Local Jurisdictions Must Include Needs of Disabled in Emergency Plans. New MRI-Based System Predicts Achilles Tendon Tear Location. Orthobiologics Are Growing Faster Than the Evidence to Support it.

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EFAA Election Mid-Arbitration Ok for New Sexual Harassment Case

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Dr. Ding Ding, a Wharton graduate with a pharmacology Ph.D. and over twenty years in biopharmaceutical investment banking, was recruited in 2021 to serve as Chief Financial Officer of Structure Therapeutics, Inc., a clinical drug development company preparing for an initial public offering. Before recruiting her, Structure’s CEO, Dr. Raymond Stevens, had circulated an email describing his “ideal phenotype” for the CFO role using two men as example candidates, though the company’s board pushed for gender diversity in the search. Dr. Ding’s offer of employment required arbitration of all employment disputes with JAMS.

According to her complaint, Dr. Stevens began sidelining Dr. Ding almost immediately after she started, limiting her duties and dismissing her contributions, and in January 2022 relayed unsubstantiated complaints from Wall Street bankers that she was “too aggressive.” On March 7, 2022, Dr. Ding was injured in a domestic violence incident; when she returned to work with visible facial injuries, Dr. Stevens commented that he could “hardly see anything” and repeatedly questioned whether she wanted to reconsider her role given her “transition in life,” while also blocking her from an upcoming executive meeting. Ten days after the incident, Stevens recommended her termination to the board, and Structure terminated her on March 22, 2022, without citing any performance issue; Stevens later testified he relied in part on male bankers’ complaints that she “lectured” them.

Dr. Ding filed an arbitration demand with JAMS in October 2022, asserting discrimination and harassment claims based on national origin and her status as a domestic violence victim. Over the following year, the parties litigated preliminary hearings, discovery, and a discovery dispute, and the arbitrator ruled on choice-of-law issues. During that discovery, Dr. Ding first obtained evidence she says revealed her mistreatment was actually motivated by her sex, including Stevens’s “phenotype” email, the board’s gender-diversity goal, and Stevens’s reliance on male bankers’ complaints. In October 2023, Dr. Ding withdrew from arbitration under a California procedural rule addressing Structure’s late payment of arbitration fees, and JAMS closed its file. She then sued Structure and Stevens in California state court, adding sex discrimination and sex-based hostile work environment claims under California’s Fair Employment and Housing Act (FEHA), along with a claim based on her domestic-violence-victim status.

Structure removed the case to federal court and moved to compel arbitration, arguing the California rule on late arbitration-fee payment was preempted by the Federal Arbitration Act (FAA) and the New York Convention. Dr. Ding countered that regardless of preemption, the arbitration agreement was invalid under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), which lets a person alleging conduct constituting a sexual harassment or sexual assault dispute elect to invalidate a predispute arbitration agreement and proceed in court. The United States District Court for the Northern District of California agreed that the state procedural rule was preempted, but held Dr. Ding had properly elected to proceed under the EFAA based on a plausible sexual harassment allegation, and, after permitting her to add New York law claims, denied Structure’s motion to compel arbitration on that ground.

In the published case of Ding v. Structure Therapeutics, Inc., No. 25-1532 (9th Cir., August 2026) — the Ninth Circuit affirmed the district court’s order denying Structure’s motion to compel arbitration.

Writing for the majority, Judge Sanchez rejected Structure’s argument that a plaintiff is categorically barred from making an EFAA election after first filing non-sexual-harassment claims in arbitration. Reviewing the statute’s text, 9 U.S.C. § 402(a), the panel found nothing limiting when a plaintiff may allege a sexual harassment claim or make her election, and held that because Dr. Ding was not yet “alleging conduct constituting a sexual harassment dispute” when she filed her original arbitration demand, she could not have triggered an EFAA election at that time; she made her one election only when she filed in federal court after discovering the sex-based nature of her treatment. The panel found this reading reinforced by the EFAA’s legislative purpose of giving harassment victims “a real choice” whether to arbitrate, and distinguished the ordinary rule, drawn from Morgan v. Sundance, Inc. (2022) 596 U.S. 411, that federal arbitration policy favors treating arbitration contracts like other contracts rather than fostering arbitration generally.

The panel also rejected Structure’s argument that Dr. Ding waived her EFAA rights by filing in arbitration despite already knowing the facts underlying a sexual harassment claim. Applying ordinary waiver principles — the intentional relinquishment of a known right — the panel held this argument was foreclosed by the district court’s factual finding, reviewed for clear error, that no record evidence showed Dr. Ding knew she had a plausible sexual harassment claim but chose not to bring it when she initiated arbitration.

Turning to the merits, the panel held Dr. Ding plausibly pled a sex-based hostile work environment claim under the FEHA, which in turn qualifies as a “sexual harassment dispute” under the EFAA’s definition. Applying the FEHA standard from Lyle v. Warner Bros. Television Productions (2006) 38 Cal.4th 264 and Hughes v. Pair (2009) 46 Cal.4th 1035, the panel found Dr. Ding alleged severe or pervasive harassment (Stevens’s preference for a male CFO, his adoption of gendered “too aggressive” criticisms, his dismissive comments about her domestic violence injuries, and her termination without any performance-related justification), that the alleged conduct created an objectively and subjectively offensive environment comparable to that in Roby v. McKesson Corp. (2009) 47 Cal.4th 686, and that the conduct was plausibly based on her sex. Because the EFAA invalidates the arbitration agreement as to an entire “case” relating to a sexual harassment dispute rather than claim-by-claim, the panel held Dr. Ding was entitled to bring her whole case, including her national-origin and domestic-violence-based claims, in court.

Judge Rawlinson dissented, arguing the majority’s rule conflicts with the statute’s plain text, its legislative history, and the ordinary legal meaning of “election.” In her view, an employee gets only one election under the EFAA, and Dr. Ding made hers when she filed and substantially litigated her claims in arbitration for over a year, including discovery, stipulations, and discovery disputes, before withdrawing. She would have applied the Ninth Circuit’s arbitration-waiver precedents, including Holley-Gallegly v. TA Operating, LLC (2023) 74 F.4th 997, and pointed to the EFAA’s lack of retroactivity as evidence Congress meant to avoid disrupting ongoing arbitrations, concluding that Dr. Ding’s belated invocation of the statute after extensive arbitration proceedings was not the kind of election the EFAA authorizes.

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VA Tops Healthcare System-Wide Pharmaceutical Costs Saving

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The Department of Veterans Affairs announced August 13, 2026 that it has secured $10.44 billion in pharmaceutical price reductions so far in fiscal year 2026 through negotiations with drug manufacturers, up from $7.99 billion in all of FY 2025 and $5.23 billion in FY 2024. This is a dollar figure representing the cumulative value of negotiated price cuts on the drugs VA buys most, not a claim that VA’s total pharmacy spending fell by 10%; VA did not publish a percentage change in total drug spending alongside the dollar figure. With that framing in mind, how does VA’s trajectory compare with what other health care payors, including workers’ compensation systems and commercial health insurers, are actually experiencing on pharmacy costs this year?

The short answer is that VA’s negotiated savings are moving in the opposite direction from nearly every other major payor category tracked in 2026 industry data, and the gap is stark. VA’s press release credits its results in part to the second Trump administration’s broader pharmaceutical pricing push, which centers on a “Most Favored Nation” (MFN) policy tying U.S. drug prices to the lowest prices paid by comparable wealthy nations. Under an executive order President Trump signed May 12, 2025, and a series of voluntary company-by-company deals that followed, the administration has now reached MFN agreements with 17 pharmaceutical manufacturers, covering an estimated 86% of the U.S. branded drug market, in exchange for a three-year reprieve from threatened tariffs on their products. The public-facing piece of that effort, the direct-to-consumer platform TrumpRx.gov, launched in 2026 and the White House reported in August 2026 that it had generated roughly $700 million in patient savings, with prescription drug prices down 3.9% since Trump took office and falling every month of 2026, citing GLP-1 medications now available starting around $149 a month and cuts of 50% to 90% or more on drugs including fertility treatments, inhalers, insulin, and cholesterol medications.

Independent health policy analysts describe a narrower picture than the administration’s framing suggests. A June 2026 analysis characterized the MFN push as having “bold aims, but limited impact,” noting the deals mainly affect Medicaid pricing and cash-pay purchases through TrumpRx, while leaving prices largely unchanged for the roughly 92% of Americans who have private insurance, Medicare, or other coverage and fill prescriptions through their normal pharmacy benefit rather than paying cash. Reporting from STAT in early 2026 found that the specific terms of the MFN agreements have not been publicly disclosed by the administration or the companies, and that SEC filings from some participating manufacturers show the deals run for three years, after which their status is unclear. A KFF summary of the policy similarly frames it as one of several efforts underway rather than a comprehensive fix, and independent experts quoted in press coverage have pointed to factors like increased generic competition and discounted GLP-1 drugs, not the MFN deals specifically, as more plausible drivers of any broader price declines. TrumpRx.gov also does not integrate with insurance at all, meaning its savings apply only to the minority of prescriptions paid for in cash.

Set against that federal picture, the two payor categories with hard 2026 data tell very different stories from each other. On the workers’ compensation side, California’s own WCIRB 2025 Losses and Expenses Report shows pharmaceutical costs have been declining as a share of total medical payments for years, falling from 1.8% of medical payments in 2020 to 1.0% in 2025, with total pharmaceutical dollars paid actually dropping slightly, from roughly $60 million in 2024 to $52 million in 2025. That decline predates the Trump administration’s MFN push, which only began in mid-2025, and is generally attributed by industry analysts to workers’ comp-specific factors that have been underway for years: state drug formularies (California’s own formulary took effect in 2018), utilization review, and a long-running reduction in opioid prescribing within workers’ comp claims specifically. In other words, workers’ comp pharmacy costs are falling, but the trend line and its likely causes are largely independent of the federal MFN policy VA is crediting.

Commercial and employer-sponsored health insurance is moving the opposite direction, and sharply so. The 2026 Segal Health Plan Cost Trend Survey, based on responses from insurers, PBMs, and third-party administrators covering more than 80% of the commercially insured and self-insured market, projects prescription drug trend at double digits for 2026, with specialty drug trend running nearly a full percentage point higher than overall drug trend and 62% of that specialty cost growth attributable to utilization rather than price. The Business Group on Health’s 2026 employer survey similarly found employers anticipating an 11% to 12% increase in pharmacy costs heading into 2026. Pharmaceutical Strategies Group’s 2026 Artemetrx State of Specialty Spend and Trend Report, based on 204 million medical claims and 48 million pharmacy claims, put specialty drug trend at 10.8% gross and 12.5% net of rebates in 2025, continuing what it describes as a multi-year run of low double-digit growth, with GLP-1 medications alone nearly doubling their share of pharmacy spend, from 9% to 17%, in two years. None of these commercial-market figures show the kind of reduction VA and the White House are reporting; if anything, industry trend surveys describe 2026 pharmacy cost growth as among the steepest in more than a decade.

Taken together, the comparison suggests VA’s reported savings and the administration’s MFN framework are real but narrow in reach: they show up clearly in VA’s own negotiated federal purchasing and in the cash-pay, direct-to-consumer channel TrumpRx serves, and workers’ comp systems are separately seeing costs fall for reasons that predate and appear largely unrelated to the federal policy. But the commercial insurance market that covers most working-age Americans, where pricing runs through employer plans, PBMs, and rebate structures the MFN deals don’t directly touch, is still projecting double-digit pharmacy cost growth for 2026, suggesting any broader, system-wide slowdown in U.S. drug costs has not yet arrived.

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