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Gann Fire Triggers Insurance Policy Moratorium Under New Laws

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The Gann Fire ignited on August 3, 2026, near Hogan Dam Road and Gann Road outside Valley Springs in Calaveras County. By the time Governor Gavin Newsom proclaimed a State of Emergency for the county on August 6, the fire had burned more than 10,300 acres, forced the evacuation of 1,473 residents with another 1,400 under evacuation warnings, resulted in one fatality, and threatened homes, structures, and electrical transmission and distribution infrastructure serving northern Calaveras County. More than 2,700 personnel, 12 helicopters, 247 fire engines, 46 dozers, and 25 water tenders were deployed to fight the fire. The proclamation directed the California Governor’s Office of Emergency Services (Cal OES) and other state agencies to support local response and recovery efforts, suspended certain public contracting rules to speed access to emergency resources, and followed the state’s prior securing of a federal Fire Management Assistance Grant from FEMA.

That emergency declaration triggered a separate, statutorily defined process at the California Department of Insurance. Under Insurance Code section 675.1, enacted through 2018 legislation (Senate Bill 824), once a state of emergency is declared for a wildfire, insurers are barred from cancelling or refusing to renew residential property insurance policies located within or adjacent to the fire perimeter, for one year from the date of the declaration, based solely on the property being located in a wildfire-affected area. A parallel statute, Insurance Code section 675.55, enacted through 2025 legislation (Senate Bill 547) and effective January 1, 2026, extends the same one-year restriction to certain commercial property insurance policies covering residential or habitational uses — including homeowners associations, condominium associations, long-term rental hotels or motels, apartment complexes, condominium complexes, multifamily dwellings with more than five units, student housing, and senior living facilities.

Under both statutes, the California Department of Forestry and Fire Protection (CAL FIRE), in consultation with Cal OES, determines the fire’s perimeter and supplies that data to the Insurance Commissioner, who then issues a bulletin identifying the specific ZIP Codes subject to the moratorium. On August 14, 2026, Insurance Commissioner Ricardo Lara issued Bulletin 2026-6, identifying 22 ZIP Codes within or adjacent to the Gann Fire perimeter — spanning Calaveras, San Joaquin, Amador, Tuolumne, and Stanislaus counties — as subject to the moratorium for one year beginning August 6, 2026, the date of the Governor’s declaration. The bulletin directs that no admitted or non-admitted insurer may issue a notice of cancellation or non-renewal due to wildfire risk, for the specified duration, for residential property insurance (including homeowners’, condo unit owners’, mobile homeowners’, and renters’ policies) or qualifying commercial property insurance located in those ZIP Codes. The bulletin also directs insurers to offer to rescind any cancellation or non-renewal notices already issued for wildfire risk on or after August 6, 2026 for properties in the affected ZIP Codes, and to offer to reinstate or renew the policies those notices would have terminated.

In an accompanying press release issued the same day, the Department of Insurance stated that the moratorium applies to more than 64,000 residential policyholders in the five affected counties. The release noted this is the first time the commercial-property moratorium under Senate Bill 547 has applied following a wildfire emergency declaration since that law took effect, and stated that Commissioner Lara’s office reported the equivalent residential moratorium mechanism applied to more than 1.2 million homeowners across the state’s wildfire emergencies in 2025. The release also noted that homeowners who have suffered a total property loss in a declared disaster are separately entitled to up to 24 months of protection from non-renewal or cancellation under existing law, a longer period than the one-year moratorium that applies regardless of whether an individual policyholder suffered a loss.

Taken together, the sequence runs as follows: a wildfire triggers a gubernatorial emergency declaration; that declaration activates the statutory ZIP-Code-based insurance moratorium process; CAL FIRE and Cal OES supply fire-perimeter data to the Department of Insurance; and the Insurance Commissioner then issues a bulletin naming the specific ZIP Codes where insurers are barred from cancelling or non-renewing residential and qualifying commercial property policies for one year, regardless of whether a given policyholder’s property was actually damaged.

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San Francisco Amends Paid Parental Leave Ordinance

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San Francisco has finalized amendments to its Paid Parental Leave Ordinance (PPLO), the decade-old local law requiring covered employers to supplement the wage-replacement benefits new parents receive from California’s Paid Family Leave (PFL) program. Mayor Daniel Lurie signed the amendment, File No. 260451 (Ordinance 162-26), on August 7, 2026, after the legislation was introduced by Supervisor Danny Sauter earlier in the year.

The PPLO itself dates to 2016, when San Francisco became the first jurisdiction in the country to require employers to bring new parents’ pay up to 100% of their normal wages during state-covered bonding leave. Under the ordinance, an employer with 20 or more employees worldwide must pay “Supplemental Compensation” — the gap between an employee’s PFL benefit and their full weekly wage, up to a combined statutory cap ($2,522 per week for claims filed in 2026) — for up to eight weeks, to any employee who works at least eight hours per week within San Francisco, performs at least 40% of their total work hours in the city, and is receiving California PFL benefits to bond with a new child through birth, adoption, or foster placement. Employers with an existing paid parental leave policy that already matches or exceeds what the ordinance requires are exempt from the supplemental-pay obligation.

The amendment’s central change is to the ordinance’s eligibility waiting period. Previously, an employee had to have worked for their employer for at least 180 days before qualifying for PPLO supplemental pay. The amendment cuts that requirement to 90 days — bringing it in line with the 90-day threshold already used under San Francisco’s separate Paid Sick Leave Ordinance. Supervisor Sauter, whose own child was born in March 2025, described the change as intended to make the benefit reachable for lower-wage workers in high-turnover industries, who are statistically less likely to stay with one employer long enough to clear a 180-day threshold. The amendment does not change the ordinance’s other core terms: the eight-week maximum duration, the supplemental-pay calculation method, the combined benefit cap, or employers’ existing obligations to post the required notice, include PPLO information in employee handbooks, and provide the Paid Parental Leave form to employees who give notice they are expecting a child.

The new 90-day standard does not take effect for all covered employers at once. The amendment phases it in based on employer size: employers with 100 or more employees remain subject to the old 180-day requirement through December 31, 2026, with the 90-day standard applying to leave periods beginning January 1, 2027; employers with 20 to 99 employees remain on the 180-day requirement through December 31, 2027, with the 90-day standard applying starting January 1, 2028. Employers with 19 or fewer employees remain outside the ordinance entirely, as under prior law.

On integration with the state program: the PPLO does not replace or duplicate California’s PFL benefit — it supplements it. California PFL, administered by the Employment Development Department (EDD) and funded through employee payroll contributions via State Disability Insurance, pays eligible workers a percentage of their wages (currently roughly 60% to 70%, depending on income) for up to eight weeks to bond with a new child, subject to a statewide weekly cap. The PPLO requires San Francisco employers meeting the size threshold to pay the difference between that state benefit and the employee’s full regular wage, so that the employee receives their normal weekly pay (up to the combined cap) rather than only the partial wage replacement PFL alone provides. To receive the full combined benefit, an employee must apply separately to both programs: first for EDD’s California PFL benefits, and then to their employer for PPLO supplemental compensation, providing the employer with EDD’s determination of the employee’s PFL benefit amount so the employer can calculate the required top-up. Because the PPLO’s Supplemental Compensation is legally tied to what an employee is found eligible to receive under state PFL, San Francisco’s benefit rises and falls with future changes to the state program’s wage-replacement percentage or its weekly benefit cap.

Employers should update parental leave policies and eligibility tracking to reflect the new phase-in schedule and monitor the San Francisco Office of Labor Standards Enforcement’s PPLO webpage for updated posters, forms, and guidance implementing the amendment.

This summary is provided for general informational purposes only and does not constitute legal advice. Employers with questions about specific compliance obligations should consult the full ordinance text and the San Francisco Office of Labor Standards Enforcement directly.

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Reliability of MRI? – Same Brain, Different Scanner, Different Results

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A new study has produced a sobering finding for anyone who thinks brain-scan evidence speaks for itself: the same person, scanned on two different MRI machines within a week, can produce results measuring their brain’s internal wiring that look substantially different depending on which scanner did the scanning. The study, Cross-vendor reliability of functional and structural brain connectivity in a travelling cohort, was published in the journal Scientific Reports in 2026 by researchers at Ruhr University Bochum, led by Lionel Butry and Dr. Lara Schlaffke.

The researchers scanned ten healthy adults on both a Siemens Prisma 3T scanner and a Philips Achieva 3.0T scanner, roughly five days apart on average, using standard clinical protocols on each machine. They then compared two kinds of brain “connectome” maps that increasingly show up in neuroscience research and, at times, in litigation: functional connectivity, which measures how synchronized activity is between different brain regions during rest, and structural connectivity, which maps the physical white-matter wiring connecting those regions.

The results were not reassuring, particularly for functional connectivity. At the level of an individual person, agreement between the two scanners for functional connectivity was rated “poor” using the standard reliability scale researchers use for this kind of measurement, with an average reliability score of just 0.22 on a 0-to-1 scale where anything under 0.5 counts as poor. Structural connectivity fared better but still landed only in the “fair” range, around 0.43. Statistical modeling showed the choice of scanner alone accounted for roughly 12% of the variation researchers measured in functional connectivity and 8% in structural connectivity — more than double the scanner-driven variability an earlier, larger eight-site study had found using two different scanner brands. The researchers also tried applying a widely used statistical correction technique called neuroComBat, originally developed for genetic data and later adapted for brain imaging, to see if it could fix the problem. It worked well for comparing groups of people against each other, essentially erasing scanner-driven differences down to about 1%, but did almost nothing to fix the reliability problem for any individual person’s own scan — the exact level at which a scan would typically be used to evaluate one specific patient or claimant.

The Bochum team frames this as a caution for the wider field, particularly for the growing number of studies that pool brain scans from multiple research sites or hospitals, or that switch scanner equipment partway through a long-running study. But the practical stakes go beyond academic research. Functional and structural connectivity measures, including diffusion tensor imaging (a technique closely related to the structural connectivity method used in this study), have been offered as evidence in personal injury and disability litigation, particularly in cases involving mild traumatic brain injury, where plaintiffs sometimes point to subtle white-matter or connectivity abnormalities as objective proof of injury even when a standard CT or structural MRI looks normal.

That use has already generated real controversy in the legal literature. A widely cited analysis in the journal World Journal of Clinical Cases, Diffusion tensor imaging in the courtroom: Distinction between scientific specificity and legally admissible evidence, describes an ongoing conflict between how sensitive these imaging techniques are in a research setting and the legal standard courts are supposed to apply before admitting scientific evidence, warning that attorneys and juries without technical training can be poorly positioned to evaluate the strength of DTI-based claims. Other legal scholars have raised similar concerns specifically about functional MRI, cautioning that courts have historically been far more willing to admit conventional structural imaging (proof that a physical injury exists) than functional imaging purporting to show how a person’s brain is working or even whether they are being truthful, precisely because of open questions about reliability and what the underlying signals actually mean.

The Bochum study’s findings also echo a much larger reckoning that has been underway in neuroscience since 2022, when a team led by researchers at Washington University in St. Louis published a widely discussed paper in Nature, Reproducible brain-wide association studies require thousands of individuals. That study, using data from nearly 50,000 participants, found that most published brain-behavior studies had been conducted with far too few subjects to produce reliable results, and that typical sample sizes of a few dozen people were prone to turning up statistically significant but ultimately spurious associations. That paper reshaped funding and design expectations across the field and is now itself part of an ongoing debate, since more recent Nature-published research has argued that study design choices, not just raw sample size, can meaningfully improve reproducibility even in smaller studies.

For the Bochum researchers, the practical message is narrower but pointed: a single brain scan from a single scanner, evaluated for a single individual, carries real uncertainty that group-level statistical fixes cannot erase. The study’s authors recommend that any research or clinical program facing a scanner change collect “bridging” data on both machines before and after the switch, and that any given patient’s edge-level connectivity results, especially involving subcortical or limbic brain regions where the study found the weakest reliability, be interpreted with real caution rather than as a precise, stable measurement.

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Bay Area Couple Face Premium and Payroll Tax Fraud Charges

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The San Francisco District Attorney announced that Declan McKevitt (47) and Grace McKevitt (54) of San Francisco were arraigned on multiple felony charges of workers compensation premium fraud and payroll tax fraud in connection to a scheme to deny the claim of an injured worker. Mr. and Ms. McKevitt each pleaded not guilty to all charges and denied the allegations.

Mr. and Ms. McKevitt are each charged with insurance fraud (IC 11880(a)), failure to make contributions (UIC 2108), acting to evade tax (UIC 2117.5), and failure to collect or pay over tax or other money (UIC 2118.5).

In addition, Mr. McKevitt is also charged with two counts of insurance fraud (IC 1871.4(a)(1)) for making a false and fraudulent statement to deny compensation and for discouraging an injured worker from claiming benefits or pursuing a workers compensation claim.

Bail in the amount of $40,000 was set for both Mr. and Ms. McKevitt. Each posted bail and was subsequently released on their own recognizance. Both are scheduled to be back in court on October 15, 2026, at 9:00 am in Department 9 at the Hall of Justice.

According to court records, Mr. and Ms. McKevitt own and manage a construction business, An Dun Construction. Allegedly, Mr. and Ms. McKevitt fraudulently underreported their payroll to their workers compensation insurance company and to the California Employment Development Department and failed to pay insurance premiums, income tax, payroll tax, and other legally required contributions.

This premium fraud and payroll tax fraud was discovered after an employee severely injured his hand on a table saw, resulting in an amputated finger. Allegedly, Mr. McKevitt told the injured worker to deny that the injury was work-related while seeking medical care. Allegedly, he further denied that this injured worker was employed by An Dun Construction and claimed that the worker was at the jobsite without his knowledge. This false denial of employment caused a four-month delay in payment of benefits owed to the injured worker. Payroll records and witness statements showed that this injured worker was employed by An Dun Construction for about seven months before the injury.

This case was investigated and charged by the Economic Crimes Unit of the San Francisco District Attorney’s Office.

Although charges have been filed, the District Attorney’s Economic Crimes Unit continues to investigate this matter along with other pending criminal investigations. Anyone with information is asked to call the San Francisco District Attorney’s Office’s Economic Crimes Unit Tip Line at 1-628-652-4444. You may remain anonymous.

Court Numbers: McKevitt, D, 26012427, McKevitt G, 26012204

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New MRI-Based System Predicts Achilles Tendon Tear Location

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The Achilles tendon is a small structure, but the claims it generates are not. A classification system that brings precision and consistency to how those injuries are documented and communicated is a meaningful development for everyone who touches these cases. The study by Mueller et al. was published in the Orthopaedic Journal of Sports Medicine in April 2026 and is indexed on PubMed. It was presented at the AOSSM 2026 Annual Meeting in Seattle, July 8-11, 2026.

Achilles tendon injuries generate significant workers’ comp costs — surgical repair, extended temporary disability, prolonged physical therapy, and in some cases permanent partial disability ratings. Several aspects of this new classification system are directly relevant to claims handling.

A research team from Hospital for Special Surgery (HSS) has developed and validated the first comprehensive MRI-based classification system for Achilles tendon ruptures, and the results — presented at the 2026 AOSSM Annual Meeting in Seattle (July 8-11) and published in the Orthopaedic Journal of Sports Medicine — show “almost perfect” inter-rater reliability for predicting the anatomical location of the tear. For workers’ compensation professionals handling one of the most common and costly soft-tissue injuries in the system, this development introduces a new layer of objective diagnostic precision that could affect treatment planning, surgical decision-making, and claims disputes.

Achilles tendon ruptures are among the most debilitating workplace injuries affecting physically active employees. The Achilles is the largest and strongest tendon in the body, connecting the calf muscles to the heel bone, and it is essential for walking, running, climbing, and virtually every weight-bearing activity. When it ruptures — often with a sudden “pop” during pushing, pivoting, or heavy lifting — the result is immediate disability, surgical repair in many cases, and a rehabilitation timeline that typically runs three to six months or longer.

But not all Achilles ruptures are the same. The tendon can tear at three distinct locations — the musculotendinous junction (where the muscle transitions to tendon in the upper portion), the mid-substance (the midsection of the tendon itself), or the insertional zone (where the tendon attaches to the heel bone). The location of the tear matters because it influences the surgical approach, the complexity of the repair, the rehabilitation protocol, and the long-term prognosis.

Until now, there has been no standardized, validated classification system based on MRI for categorizing Achilles tendon ruptures by location. The absence of such a system has contributed to inconsistency in how these injuries are described, communicated between providers, and documented in medical records — creating ambiguity that can fuel disputes in workers’ comp claims over the appropriate treatment and expected recovery timeline.

The HSS team, led by Dr. Steve B. Behrens, analyzed MRI studies of patients with complete Achilles tendon ruptures and developed a classification system that categorizes tears by their anatomical location along the tendon. They then tested the system’s reliability by having multiple independent reviewers apply the classification to the same set of MRI images.

The results were striking. The classification system demonstrated almost perfect inter-rater reliability — meaning that different reviewers looking at the same MRI consistently agreed on where the tear was located. In clinical research, this level of agreement is the gold standard for a classification system’s usefulness, because a tool that different physicians interpret differently is not useful for guiding treatment or generating comparable outcomes data.

The study also identified predictors of tear location. Ruptures at the musculotendinous junction were the most common, accounting for 63 percent of cases. The presence of pre-existing tendinopathy (degenerative changes in the tendon), patient age, the size of the gap between torn tendon ends, and tendon thickness were all significant predictors of where the tear occurred. Female patients exhibited distinct tear patterns compared to males.

Different tear locations call for different surgical approaches and rehabilitation protocols. A tear at the musculotendinous junction may be treated differently than an insertional tear, which often involves more complex surgical reconstruction and a longer recovery. With a reliable classification system, utilization review teams can more objectively evaluate whether the recommended treatment matches the documented injury. If a treating surgeon recommends a complex reconstruction for what the MRI classification identifies as a straightforward mid-substance tear, that discrepancy becomes visible and reviewable.

The finding that pre-existing tendinopathy predicts tear location has direct implications for causation disputes. In workers’ comp, a common defense argument in Achilles rupture claims is that the tendon was already degenerative and would have ruptured regardless of the workplace incident. The new classification system’s ability to identify and characterize pre-existing tendon disease on MRI provides more granular evidence for both sides of that argument — the degree of pre-existing degeneration can now be documented and classified, rather than described in vague, subjective terms.

The HSS classification system is newly published and will require broader adoption and validation across multiple institutions before it becomes a clinical standard. But the trajectory is clear: Achilles tendon injury management is moving from subjective, narrative-based documentation toward standardized, MRI-verified classification — the same direction that traumatic brain injury assessment, joint infection diagnosis, and other areas of musculoskeletal medicine are heading.

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Orthobiologics Are Growing Faster Than the Evidence to Support it

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Platelet-rich plasma injections. Bone marrow aspirate concentrate. Stem cell therapies. If you handle workers’ compensation claims involving musculoskeletal injuries, you have almost certainly seen these treatments — collectively known as orthobiologics — appearing on treatment plans and medical bills with increasing frequency. Patients are now asking for PRP by name. Treating physicians are offering it as an alternative to surgery. And the bills are landing on adjusters’ desks with price tags that can run from several hundred to several thousand dollars per injection.

There is just one problem: the clinical evidence supporting many of these treatments remains thin, inconsistent, and — according to a growing chorus of orthopedic leaders — insufficient to justify the pace at which they are being adopted. A Healio editorial published August 6, 2026, titled “Separate Science from Hope,” put the issue in stark terms: “Few areas of orthopedic practice have grown faster and with thinner evidence than orthobiologics.”

The editorial was prompted by a major institutional response to the evidence gap. In December 2025, the American Academy of Orthopaedic Surgeons (AAOS) announced the creation of the AAOS Orthobiologics Registry, developed in collaboration with the American Orthopaedic Society for Sports Medicine (AOSSM), the Arthroscopy Association of North America, and the Biologic Association. The registry’s stated mission, as its leadership has framed it, is to separate science from hope — to build the kind of rigorous, real-world outcomes data that the existing PRP and orthobiologics literature largely lacks.

Here are some basic terms to understand:

– – Orthobiologics is an umbrella term for biological substances used to promote healing of musculoskeletal tissues — bones, muscles, tendons, and ligaments. The most commonly encountered treatments include:
– – Platelet-rich plasma (PRP), in which a patient’s own blood is drawn, centrifuged to concentrate the platelets and their associated growth factors, and injected into an injured joint or tendon. The theory is that the concentrated growth factors accelerate tissue repair.
– – Bone marrow aspirate concentrate (BMAC), in which marrow is drawn from the patient’s pelvis, concentrated, and injected into the treatment site. BMAC contains mesenchymal stem cells that have the theoretical potential to differentiate into cartilage, bone, or tendon tissue.
– – Stromal vascular fraction (SVF) and adipose-derived stem cells, harvested from the patient’s own fat tissue.

These treatments are appealing in concept. They use the patient’s own biological material, they are minimally invasive compared to surgery, and they promise regeneration rather than mere symptom management. But “appealing in concept” and “supported by clinical evidence” are not the same thing. The clinical evidence for orthobiologics is characterized by three persistent weaknesses that are directly relevant to workers’ comp claims handling.

– – First, there is no standardization. PRP is not a single product — it is a category. The concentration of platelets, the presence or absence of white blood cells (leukocyte-rich versus leukocyte-poor), the activation method, and the volume injected all vary widely between providers and even between injections at the same clinic. Two patients who both receive “PRP for knee osteoarthritis” may be getting fundamentally different treatments. This heterogeneity makes it extremely difficult to draw reliable conclusions from the published literature, because studies using different preparation protocols are being pooled together as though they were studying the same intervention.
– – Second, the high-quality evidence that does exist shows modest and often short-lived benefits. A comprehensive narrative review published in the Journal of Clinical Medicine in June 2025 found that PRP injections — particularly leukocyte-poor formulations — demonstrated some pain relief and functional improvement for mild to moderate knee osteoarthritis compared to hyaluronic acid and corticosteroids. But the improvements were inconsistent across studies, follow-up periods were generally short, and the clinical significance of the measured differences was debatable. As a Healio September 2025 editorial on orthobiologics noted, “when studied through the lens of high-level clinical evidence, the picture is less convincing of the clinical benefit.”
– – Third, and critically for workers’ comp, PRP is not FDA-approved as a drug or biologic therapy. The FDA regulates the centrifuge devices used to prepare PRP, but it does not evaluate or approve the PRP treatment itself for any specific clinical indication. Physicians use PRP off-label, meaning the safety and efficacy for any given condition have not been established through the FDA’s standard approval process. This regulatory gap creates a challenging situation for utilization review teams and bill review departments tasked with determining whether a PRP injection meets medical necessity criteria.

The AAOS Orthobiologics Registry is designed to address these evidence gaps by collecting standardized, real-world data on orthobiologic treatments as they are actually used in clinical practice, tracking preparation protocols, patient characteristics, treatment indications, and outcomes over time. The Healio editorial noted that the registry’s published attributes are more rigorous than most existing PRP literature.

This matters because the registry could, for the first time, produce the kind of large-scale, standardized outcomes data that would allow the medical community — and, by extension, workers’ comp payers, treatment guideline panels, and utilization review organizations — to determine which orthobiologic treatments work, for which conditions, using which preparation methods, and for which patients. That data does not exist today in any reliable form.

The AOSSM reinforced this priority at its 2026 Annual Meeting in Seattle (July 8-11), where the AAOS Biologics Summit returned as a full-day pre-meeting workshop co-chaired by leading researchers in the field. The summit’s explicit focus was on how biologics are transforming sports medicine — and where the evidence needs to catch up.

PRP injections typically range from $500 to $2,000 per treatment, and many protocols call for a series of two to three injections. BMAC procedures can cost significantly more. These are out-of-pocket costs in many contexts because most health insurers do not cover PRP, but in workers’ comp, where the employer or insurer is responsible for reasonable and necessary medical treatment, the question of coverage cannot be avoided.

Unlike most medical treatments, PRP and stem cell therapies are heavily marketed directly to patients. Injured workers may arrive at their treating physician’s office requesting PRP by name, based on advertising or word of mouth. This consumer-driven demand creates pressure on physicians to offer the treatment regardless of the strength of the evidence for the specific condition.

As the AAOS Orthobiologics Registry begins producing data, that data will likely influence treatment guideline updates, utilization review standards, and medical necessity determinations. Claims professionals should monitor registry publications and be prepared for the possibility that the data could cut either way — validating PRP for some conditions while undermining it for others.

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August 10, 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: California Laws Might Not Protect Remote Workers in Other States. 9th Circuit Declines to Compel Arbitration of ERISA Claim. Suspension of SCIF Attorney for Failing Cybersecurity Tests Affirmed. Contract Formed Upon Carriers Acceptance of Policy-Limits Demand. Employer’s Arbitration and Confidentiality Agreements Unconscionable. CWCI Reports Substantial Unexplained Increase in CT Claims. OLC Opinion: ADA’s State “Integration Mandate” Not Required by Law. Top Court Rules Drugmaker Has No Duty to Speed Safer Drug to Market.

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Is Subrogation Available in Injured Federal Worker Malpractice Cases?

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In California, a workers’ compensation insurance carrier has no subrogation or reimbursement rights in a medical malpractice case. Pursuant to California Civil Code section 3333.1 — the Medical Injury Compensation Reform Act (MICRA) carve-out — when an injured worker recovers damages in a medical malpractice lawsuit, the collateral source provider (the workers’ compensation carrier) is explicitly barred from recovering its paid benefits through a lien or subrogation action. Carriers retain normal subrogation rights under California Labor Code sections 3850–3865 for other third-party torts, such as auto accidents, premises liability, or defective products — the bar applies specifically to malpractice claims against the treating physician.

However, does this prohibition on medical malpractice subrogation apply when the injured worker is employed not by a California employer, but by the federal government — for example, the FBI? The facts of a newly published California Court of Appeal decision in Godshall v. Peterson, No. D086572 (Cal. Ct. App., 4th Dist., Div. 1, August 2026), set the stage for that question, though the court’s actual holding turns on an unrelated statute-of-limitations issue and does not address subrogation at all.

In this medical malpractice action, Cecilia Godshall alleges Drew A. Peterson, M.D. and California Orthopaedic Institute Medical Associates, Inc. negligently performed carpal tunnel surgery on her in 2017. Godshall was an office support technician with the Federal Bureau of Investigation (FBI) whose job involved substantial typing duties, and her medical care was authorized by the U.S. Department of Labor through her employment with the FBI. The defendants moved for summary judgment, asserting Godshall’s claims were barred by the one-year statute of limitations under Code of Civil Procedure section 340.5. The trial court granted the motion. The Court of Appeal reversed, holding that triable issues of fact remained as to when Godshall discovered, or should have discovered, both her injury and its negligent cause, since the one-year limitations period does not begin to run until a plaintiff discovers both.

So assuming that, after remand, Godshall successfully litigates her case to a recovery by trial or settlement, may the federal government recover the payments it made for her industrial injury by way of subrogation? A review of the relevant statutes and case law does not rule out subrogation recovery in a malpractice case for a federal employer — and in fact points strongly the other way.

Because Godshall is a federal employee, her carpal tunnel injury would have been covered not by California workers’ compensation but by the Federal Employees’ Compensation Act (FECA), administered by the Department of Labor’s Office of Workers’ Compensation Programs (OWCP). FECA has its own third-party recovery scheme under 5 U.S.C. §§ 8131–8132 — a federal reimbursement mechanism that operates independently of California’s Labor Code §3852 subrogation lien process. When a federal employee’s FECA-covered injury subsequently becomes the subject of a third-party recovery — including a malpractice recovery against the treating physician — OWCP is entitled to reimbursement out of that recovery. This isn’t optional; the statute provides that the beneficiary “shall refund to the United States” the compensation paid.

This is confirmed by the Department’s own third-party liability training materials, which list “the claimant sues a surgeon for malpractice and wins a settlement (OWCP paid for surgery)” as a textbook example of a case that must be referred to the Solicitor’s Office for third-party recovery action. The governing federal regulation, 20 C.F.R. Part 10, Subpart H, goes further still, stating explicitly that “an injury caused by medical malpractice in treating an injury covered by the FECA is also an injury covered under the FECA,” so that any recovery in such a malpractice suit is treated as a “gross recovery” that must be reported to OWCP.

The Supreme Court has already held that state law can’t shrink this right — and the plaintiff was also an FBI agent. In United States v. Lorenzetti, 467 U.S. 167 (1984), an FBI special agent injured in a car accident argued that because Pennsylvania’s no-fault statute limited his tort recovery to non-economic losses like pain and suffering, the federal government’s §8132 reimbursement right — which attaches to compensation for medical expenses and lost wages — did not reach his settlement at all. A unanimous Court disagreed, holding that §8132 entitles the United States to reimbursement “out of any damages award or settlement made in satisfaction of third-party liability,” regardless of how state law characterizes or limits the underlying recovery. The Court’s reasoning rested on Congress’s intent in enacting FECA and on the principle that a state’s own damages taxonomy cannot be used to defeat a federal statutory reimbursement right.

California’s own MICRA architecture already assumes this. Civil Code §3333.1 bars “collateral sources” — including California workers’ compensation carriers — from asserting liens against a malpractice recovery, but California courts have already recognized that government payment programs sit outside that bar. In Brown v. Stewart (1982) 129 Cal.App.3d 331, the Court of Appeal held that Medi-Cal’s statutory lien survived §3333.1 precisely because Medi-Cal is a government-administered program, not an ordinary “collateral source” insurer covered by MICRA’s collateral-source bar.

Medicare’s own reimbursement right survives for a closely related reason: its federal Medicare Secondary Payer statute carries independent preemptive force, much as FEHBA’s express preemption clause does in the line of cases culminating in Coventry Health Care of Missouri, Inc. v. Nevils, 581 U.S. 87 (2017), where a unanimous Supreme Court held that a state anti-subrogation law could not override a federal employee health benefits carrier’s contractual subrogation right because doing so would interfere with “distinctly federal interests” in the uniform administration of a federal employee benefits program. FECA slots into that same category as an independent federal statutory scheme, not a state-law-created lien of the kind §3333.1 was written to reach.

No case squarely holds that “§3333.1 does not apply to a FECA lien.” The closest direct analogues are the Medi-Cal and Medicare carve-outs from §3333.1, and Lorenzetti itself, which involved a different type of state statute — a no-fault damages-limitation law, rather than a MICRA-style anti-subrogation provision. So the conclusion here is a strong doctrinal inference drawn from adjacent, well-settled law, rather than a question any court has decided on facts identical to Godshall’s. If Godshall’s case produces a recovery on remand, it could set up exactly the test case California law has not yet seen: whether the federal government’s FECA reimbursement right survives a state MICRA statute that would categorically bar the same claim by a private California carrier.

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No Loss of Consortium for Spouses of Injured Jones Act Seamen

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Tracy Simerley worked as a seaman on a ferryboat owned by Golden Gate Bridge Highway and Transportation District (District) when he was injured on the job. Tracy and his wife, Lynette Simerley, sued the District in March 2025, alleging Tracy qualified as a “seaman” under the Jones Act (46 U.S.C.A. § 30104). The complaint asserted causes of action for Jones Act negligence, maintenance and found and cure, and unseaworthiness under general maritime law — a strict-liability theory based on the vessel, its gear, crew, or equipment being unsafe or unfit for service. Lynette’s own claim for loss of consortium was pleaded as part of the unseaworthiness cause of action.

The District demurred to Lynette’s loss of consortium claim, arguing it was unavailable under both the Jones Act and general maritime law. Citing Miles v. Apex Marine Corp. (1990) 498 U.S. 19, the District argued the Jones Act does not permit recovery of non-pecuniary damages, and citing The Dutra Group v. Batterton (2019) 588 U.S. 358, it argued loss of consortium claims are unavailable to spouses of injured seamen under general maritime law as well. The Simerleys opposed, arguing general maritime law provided a common law remedy for loss of consortium and that Atlantic Sounding Co. v. Townsend (2009) 557 U.S. 404 made clear the District’s authority did not control. The San Francisco County Superior Court sustained the demurrer without leave to amend, concluding there was no recovery for loss of consortium under the Jones Act and, applying the framework from Batterton, no such remedy for unseaworthiness claims under general maritime law either.

In the published case of Simerley et al. v. Golden Gate Bridge Highway and Transportation District, No. A173588 (Cal. Ct. App., 1st Dist., Div. 1, August 2026) — the Court of Appeal affirmed.

The U.S. Supreme Court has addressed the relationship between general maritime law remedies and federal maritime statutes in a trio of decisions — Miles, Atlantic Sounding, and Batterton — and that Batterton, the most recent, supplies the controlling three-part test: (1) whether the requested relief has traditionally been available for the particular type of claim at issue; (2) whether allowing it would be necessary to maintain uniformity with Congress’s statutory scheme; and (3) whether policy grounds independently compel the relief. The panel rejected Lynette’s argument that Batterton did not control because its reasoning rested primarily on policy grounds and was not “on point,” holding that California courts are bound by the “ratio decidendi” of U.S. Supreme Court decisions on questions of federal law, and that all three Batterton factors, not policy alone, were necessary to that decision’s holding.

On the Jones Act, the panel held the statute’s own text forecloses a loss of consortium claim regardless of Batterton, since the Act permits only “[a] seaman injured in the course of employment” (or, if the seaman dies, his personal representative) to bring a civil action — language that does not authorize a claim by the seaman’s spouse. The panel found this consistent with Batterton’s separate conclusion that the Jones Act, by incorporating the remedial provisions of the Federal Employers’ Liability Act, limits recovery to pecuniary loss, and with the uniform view of federal courts that this pecuniary limitation applies to non-fatal injury claims just as it does to wrongful death claims.

Turning to general maritime law, the panel applied Batterton’s first factor and found the historical record insufficient to establish that loss of consortium was traditionally available for unseaworthiness claims specifically. The Simerleys relied on a federal district court decision, Morgan v. Almars Outboards, Inc. (D.Del. 2018) 316 F.Supp.3d 828, and, through it, on American Export Lines, Inc. v. Alvez (1980) 446 U.S. 274 and Sea-Land Services, Inc. v. Gaudet (1974) 414 U.S. 573. The panel found each of the older cases cited either did not involve an unseaworthiness claim at all, involved a longshoreman rather than a Jones Act seaman (a distinction Miles had already limited Gaudet’s holding to), or came too late to qualify as evidence from the “formative years” of the personal injury unseaworthiness claim, the historical period Batterton requires courts to examine. Because the Simerleys failed to identify a clear historical pattern of loss of consortium recovery specifically for unseaworthiness claims, the panel held that gap was, in the words of Batterton, “practically dispositive.”

The panel likewise found the second and third Batterton factors unfavorable: because the Jones Act itself bars loss of consortium recovery, allowing it under general maritime law for the parallel unseaworthiness claim would undermine rather than promote uniformity between the two causes of action, and the Simerleys offered no independent policy argument favoring the remedy. Having found no historical support, no uniformity-based justification, and no policy grounds favoring recovery, the panel held loss of consortium is unavailable under general maritime law for personal injury unseaworthiness claims brought by a Jones Act seaman’s spouse, affirmed the judgment, and did not reach the Simerleys’ separate argument that the trial court’s reliance on a different case was misplaced, since the appellate court may affirm on any ground supported by the record.

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Local Jurisdictions Must Include Needs of Disabled in Emergency Plans

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The California Attorney General has sent a guidance letter, dated August 10, 2026, to city attorneys, mayors, city managers, county counsel, and county administrative officers statewide, laying out local governments’ legal obligations to include people with disabilities in emergency planning, response, and recovery. The letter, issued by the Civil Rights Enforcement Section of the California Department of Justice, comes as Bonta’s office says it continues to receive complaints that the needs of Californians with disabilities are being overlooked in wildfire, earthquake, and other emergency planning across the state.

The letter’s central legal point is that accommodations for people with disabilities cannot be an afterthought handled case-by-case once a disaster hits. Citing a 2011 federal district court order against the City of Los Angeles and a similar 2013 ruling against New York City, the letter states that ad hoc accommodations requested only at the time of an emergency are “both legally inadequate and practically unrealistic.” Instead, under Title II of the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) and Section 504 of the Rehabilitation Act (29 U.S.C. § 794), local governments must affirmatively anticipate the needs of residents with disabilities and build accommodations into emergency plans in advance, covering notification, evacuation, transportation, sheltering, and reintegration into the community. The letter traces this obligation to the Ninth Circuit’s 1996 decision in Crowder v. Kitagawa, which held that a facially neutral state policy can still deny meaningful access under the ADA if it disproportionately burdens people with disabilities.

The letter also flags a liability point some local governments may overlook: public entities remain legally responsible for disability discrimination committed by the private and nonprofit organizations they rely on during emergencies. Under federal regulations, Title II’s obligations attach to third-party contractors providing government services, so a city that contracts with a nonprofit to distribute recovery information can be held liable if that nonprofit’s services, physical location, or communications are not accessible.

Beyond the ADA and Section 504, the letter catalogs a lengthy list of other applicable laws local officials should know: California Government Code section 11135, which bars disability discrimination by recipients of state funding and was amended by regulation in 2024; the California Emergency Services Act (Gov. Code, §§ 8550–8668) and its implementing Standard Emergency Management System regulations; Education Code requirements that school districts include disability adaptations in their Comprehensive School Safety Plans; federal closed-captioning rules that now extend to internet-based streaming, meaning emergency video posted to a public entity’s website may need captions; and a Government Code requirement that 911 dispatch centers have equipment able to serve callers with hearing disabilities.

The bulk of the letter is a detailed, practical planning checklist organized around four phases. On communication, it recommends redundant alert methods beyond cell phone alerts (including door-to-door notification), advance arrangements for sign language interpreters and real-time captioning, and pre-drafted plain-language evacuation instructions free of jargon and acronyms. On evacuation, it calls for identifying accessible transportation resources in advance, planning for residents in high-rise buildings without elevator access during outages, and partnering with organizations like Centers for Independent Living that already know where residents with disabilities are located. On sheltering, the letter recommends assessing the physical accessibility of every pre-designated shelter site, stocking backup power for medical equipment like oxygen concentrators and electric wheelchairs, keeping refrigerated storage for medications, and training shelter staff on service animal rights and assisting with daily living activities. On reintegration, it recommends advance agreements with hotels to hold accessible rooms and coordination with social service providers to maintain continuity of care for displaced residents.

The letter closes by pointing local officials toward a substantial list of existing state and federal resources rather than requiring jurisdictions to build everything from scratch, including the California Governor’s Office of Emergency Services’ state emergency plan and its dedicated Integrated Evacuation Planning Guide for people with access and functional needs, the California Department of Rehabilitation’s disaster preparedness resources, and the U.S. Department of Justice’s ADA emergency planning guidance. The letter urges jurisdictions to involve people with disabilities directly in planning and training exercises, not merely as a “box to check,” and to consider hiring qualified outside experts to help build comprehensive plans. Questions about the letter can be directed to Michael L. Newman, Senior Assistant Attorney General for the Civil Rights Enforcement Section, which includes the department’s Disability Rights Bureau.

This summary is provided for general informational purposes only and does not constitute legal advice. Local governments and officials should consult the full guidance letter and applicable law directly, and may wish to consult legal counsel regarding their jurisdiction’s specific emergency planning obligations.

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