Courthouse News reports that a well-publicized fraud lawsuit brought by the district attorneys of San Francisco and Los Angeles accusing California law firm Potter Handy of shaking down small businesses with phony disability rights complaints met its end this week with a San Francisco judge’s dismissal of the case on privilege grounds.

Then-San Francisco DA Chesa Boudin and his LA counterpart George Gascón filed the high-profile case seeking the return of millions of dollars the business owners paid to settle thousands of groundless disability-rights lawsuits.

The pair claimed lawyers for the San Diego-based firm file thousands of boilerplate Americans with Disabilities Act lawsuits on behalf of a handful of disabled clients against small businesses only to pressure the owners to quickly settle for an amount between $10,000 and $20,000.

One Potter Handy client, Orlando Garcia, has allegedly filed more than 800 lawsuits. Another client, Brian Whitaker, filed more than 1,700 federal cases. The complaint also lists serial filers Chris Langer, Rafael Arroyo, and Scott Johnson, who was indicted by a federal grand jury in 2019 for failing to report the income he received from the lawsuits on his taxes.

In a brief ruling Monday, San Francisco Superior Court Judge Curtis Karnow found the DAs’ case barred by rules governing “litigation privilege” that protect the filings and communications connected to Potter Handy’s ADA lawsuits from being used against them as they pursue their clients’ interests.

“The gist is that there is a recognition that bringing civil litigation is protected by the First Amendment right to petition the government. Prosecuting claims based on filing a lawsuit is a direct attack on this right, and inherently implicates numerous other rights,” Potter Handy partner Dennis Price said in an email Wednesday. “How do you engage in civil discovery when virtually every document is covered by attorney-client privilege? Further, if there is a threat of future litigation derived from bringing a lawsuit, it can have a chilling effect on future claims.”

Price said ADA filings from firms have dropped off since the district attorneys’ lawsuit, but Potter Handy is still filing cases.

Karnow did not give the attorneys an opportunity to amend the case, but said they can still bring criminal charges against Potter Handy, and that its lawyers could be disciplined by the State Bar for ethics violations “if the complaint’s allegations are true.”

Randy Quezada, a spokesperson for Boudin’s successor Brooke Jenkins said Wednesday that that are “considering all options before making any decisions.”

Price described the original civil suit as a “publicity stunt” meant to drum up support for Boudin and Gascón, who were both facing recall elections at the time. Only Gascón remains in the job.

“Gascón and Boudin wasted taxpayer money to shore up support from the small business communities that had lost faith in each of them by attacking a convenient scapegoat,” Price said. “People with disabilities are a small, politically forgotten, minority. This is the same cold calculation California businesses often make: disabled patrons represent a tiny fraction of their potential customer base, and people with disabilities face some of the highest rates of poverty of any minority group. Why invest in making physical changes to accommodate persons with disabilities? This is the reason the ADA was needed over 30 years ago and why it is still needed today.”

Matthew Mehdi Rafat was a Technology Credit Union (TCU) customer. He had had an interaction with a TCU employee M.L. on March 24 2021 and had made a video recording of the interaction, which he posted on his YouTube channel. A Technology Credit Union employee identified in this case by the initials “M.L” . believed that, due to Rafat’s “aggression” and “later efforts to cause [her] harm by posting videos of the incident on the internet,” Rafat “will come back and seek [her] out at the branch.”

California’s Code of Civil Procedure section 527.8 allows an employer to obtain a workplace violence restraining order (WVRO) on behalf of an employee who has been subjected to a credible threat of violence at the workplace.

On April 5, 2021, TCU filed a petition for a WVRO restraining Rafat and protecting TCU’s employee, M.L.. TCU claimed that Rafat had made a credible threat of violence against M.L.

M.L.’s declaration, which was attached to the petition, described a single March 24 encounter between her and Rafat at a TCU branch. M.L. declared that Rafat “became visibly angry and became aggressive towards” her while she was assisting him, made a video recording of her “without her consent,” “made several rude and inappropriate statements questioning [her] mental competency,” repeatedly refused her request to stop video recording her, and “assaulted [her] when he forced a pen and paper back towards [her] and demanded that [she] write down his number.”

On April 7, the trial court issued a temporary WVRO and set a hearing. The court’s temporary WVRO included personal conduct and stay away orders barring Rafat from contacting or harassing M.L. or visiting her workplace except for legitimate business.

On April 13, Rafat filed a response to the petition.and denied that he had made a credible threat of violence. At subsequent hearings the video was received into evidence, and several witnesses including M.L. provided details of the encounters with Rafat. The court issued a WVRO that, like the temporary WVRO, included both a personal conduct order and a stay away order, and the court ordered the WVRO to remain in effect until December 31, 2022. Rafat timely filed a notice of appeal from the order.

The Court of Appeal reversed in the published case of Technology Credit Union v Rafat H049471 (August 2022).

CCP 527.8 provides that a “Credible threat of violence’ is a knowing and willful statement or course of conduct that would place a reasonable person in fear for his or her safety, or the safety of his or her immediate family, and that serves no legitimate purpose.”

“Our careful review of the record discloses insufficient evidence that could support such a finding. Rafat’s conduct on March 24 was indisputably rude, impatient, aggressive, and derogatory. Further, he had a history of using aggressive language, including making offensive remarks.”

“However, while he appeared angry and frustrated during the March 24 incident and its aftermath, there was not sufficient evidence produced by TCU linking any of Rafat’s statements or conduct to any implied threat of violence. The only threats he made were of litigation and complaints to a federal agency.”

Congress, facing business-community pressure, passed the Federal Arbitration Act (FAA) in 1925. Section 2 of the FAA states that an agreement to resolve disputes via arbitration “shall be valid, irrevocable, and enforceable.” The U.S. Supreme Court has interpreted the FAA expansively, and has applied the FAA to employment contracts, upheld waivers of the right to class actions, and sanctioned arbitration of civil rights disputes.

Some state courts have responded to the Court’s interpretations with outright hostility by undermining the FAA. However, SCOTUS has broadly rejected their attempts at workarounds

In a recent battle in this arena, the California legislature passed AB 51 in 2019 which added Section 432.6 to the Labor Code which prohibits California employers from requiring employees to sign an arbitration agreement regarding FEHA claims as a condition of employment.

Shortly after its passage, the Chamber of Commerce of the United States of America, California Chamber of Commerce and other business groups filed suit in the United States District Court for the Eastern District of California, arguing that A.B. 51 was preempted by the FAA. The district court granted a temporary restraining order against A.B. 51 three days before it was to take effect.

In February 2020, the same court issued a preliminary injunction, finding A.B. 51 was preempted by the FAA. The district court noted the California legislature’s history of circumventing the Supreme Court’s interpretations of the FAA: the Governor has twice vetoed similar bills as preempted, with a third rejected by a California appellate court. A.B. 51 fared no better.

The Ninth Circuit reversed in part. as it held that A.B. 51 was not in conflict with, and therefore not preempted by, the FAA. Relying on FAA text and precedent, the court held that the FAA does not govern behavior in the absence of an executed arbitration agreement; accordingly, the provisions in A.B. 51 regulate employer conduct only before an arbitration agreement exists. Thus it essentially upheld California’s law banning mandatory arbitration agreements in the workplace.

The U.S. Chamber of Commerce filed a petition for rehearing en banc, which the Ninth Circuit deferred pending the U.S. Supreme Court’s decision in Viking River Cruises v. Moriana. The U.S. Supreme Court issued its decision in Viking River Cruises on June 15, 2022. In essence SCOTUS held in an 8-1 ruling that the Federal Arbitration Act allows employers to enforce arbitration agreements as to individual claims asserted under the California Private Attorneys General Act.

Following the closely watched Viking decision,instead of granting or denying the petition, on August 22, 2022 the Ninth Circuit withdrew its prior opinion and granted a panel rehearing in the U.S. Chamber of Commerce v Bonta case . No date has yet been set for this hearing.

The U.S. Supreme Court decision in Viking has now – at least temporarily – disrupted the PAGA process against employer’s who have arbitration agreements in California Hence, on July 22, 2022 the California Supreme Court granted a Petition for Review in the Adolph v Uber Technologies Inc. case. The Uber case was chosen to decide how Viking will be integrated into California employment law with respect to employer mandated arbitration agreements with employees..

And at least some California employment law attorneys are speculating that in the Chamber of Commerce v Bonta case, the Ninth Circuit three-judge panel might conclude the FAA preempts AB 51 in its entirety And a recent article on the case by the Harvard Law Review before the decision was withdrawn said “Bonta is a remarkably prolabor decision, but it is susceptible to reversal by the Supreme Court given its shaky doctrinal grounds.”

Needless to say, the Chamber of Commerce v Bonta, and Adolph v Uber Technologies cases will be closely followed by employers in the months to come.

A South Bay chiropractor was sentenced to 14 months in federal prison for taking kickbacks from Pacific Hospital – a corrupt medical center in Long Beach whose owner, Michael D. Drobot, was later imprisoned – and for soliciting kickbacks from another Southern California hospital.

68 year old Brian Carrico, who lives in Redondo Beach, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay a fine of $25,000.

Carrico pleaded guilty on February 24 to one count of soliciting kickbacks – the same day his two Redondo Beach-based companies, Performance Medical & Rehab Center Inc., and One Accord Management Inc., each pleaded guilty to one count of conspiracy to solicit kickbacks.

Judge Staton also sentenced Carrico’s companies to one year of probation and fined them each $250,000.

Carrico is a licensed chiropractor and owned Performance Medical & Rehab Center, which treated injured workers. Surgeons saw patients at Performance Medical’s offices. Carrico also owned One Accord Management, which provided billing, collection and other support services for Performance Medical.

His criminal partner, 68 year old William Parker, who also lives in Redondo Beach, owned Union Choice Therapy Network, which had a contract with Pacific Hospital and paid One Accord money from that contract. Last month, Parker was sentenced to one year and one day in federal prison and was fined $5,500. He pleaded guilty on February 24 to one count of soliciting kickbacks.

From June 2004 to December 2013, Carrico and Parker participated in a kickback scheme in which Pacific Hospital overpaid for the value of services performed under its Union Choice contract to induce Carrico and Parker to refer patients to Pacific Hospital for surgeries and other treatment.

Pacific Hospital specialized in surgeries, especially spinal and orthopedic procedures. The owner of Pacific Hospital, Michael D. Drobot, conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spine surgeries involving kickbacks. To date, 22 defendants have been convicted for participating in the kickback scheme.

In April 2013, law enforcement searched Pacific Hospital. Later that year, Carrico learned Pacific Hospital was going to be sold and the kickback scheme would end. Rather than cease their criminal conduct after the Pacific Hospital search, Carrico and Parker then approached an executive at a different hospital and solicited kickbacks from him.

Specifically, Carrico and Parker offered a quid pro quo in which the referral of patients to the hospital was contingent on that hospital entering into a management services agreement with Union Choice. Under the proposed agreement, the hospital would have paid Union Choice a total of $110,000 over the span of four months – more than the market value of the services performed.

While not written into the contract, Carrico and Parker would cause the referrals of Performance Medical patients to go to this hospital. The hospital’s executive ultimately rejected the deal.

Maria Rodriguez claimed injury to her left foot, bilateral ankles, left knee, left hip, low back, psyche and sleep disorder while employed as a housekeeper by defendant Southland Lutheran Care Center on November 13, 2008.

On March 7, 2012, a Findings, Award and Order issued, sustaining injury to all claimed body parts save sleep disorder, and awarding temporary and permanent disability.

Rodriguez filed a Petition to Reopen for New and Further Disability on June 13, 2013. Following the Petition to Reopen, Daniel Capen, M.D. continued to serve as applicant’s primary treating physician, and authored multiple interim reports in 2013. On January 22, 2015, AME Dr. Craemer reevaluated applicant’s orthopedic complaints. Internal medicine QME Minal Borsada, M.D. authored a medical-legal evaluation of applicant on February 8, 2016,

The parties proceeded to trial on January 2, 2019, and framed issues of the petition for new and further disability and the substantiality of the AME reporting. The WCJ issued the F&O on June 10, 2019, finding AME Dr. Craemer’s reporting to constitute substantial medical evidence and dismissing the June 13, 2013 petition for new and further disability. The WCAB denied her Petition for Reconsideration and affirmed the F&O in the panel decision of Rodriguez v Southland Lutheran Care Center ADJ6692602 (July 2022)

On reconsideration Rodriguez argued that the reporting of AME Dr. Craemer was not substantial medical evidence for want of diagnostic testing and a correct forensic analysis. and further contends the WCJ should have relied on the reporting of panel Qualified Medical Examiner Dr. Borsada to find that applicant’s diabetes was aggravated as a result of her industrial injuries.

The WCAB panel said that to “recover additional benefits, the injured worker must not only file a timely petition to reopen but must also have suffered a “new and further disability” within that five-year period, unless there is otherwise “good cause” to reopen the prior award. (Sarabi v. Workers’ Comp. Appeals Bd. (2007) 151 Cal.App.4th 920, 925 [72 Cal.Comp.Cases 778]. at p. 926.) An injured worker cannot confer jurisdiction on the WCAB by filing a petition to reopen before the five-year period has expired for anticipated new and further disability that may occur after the five-year limitation period has run.”

Here, applicant’s date of injury is November 13, 2008, and applicant must establish a “demonstrable change in condition” prior to the expiration of the five-year statutory period on November 13, 2013.

The WCJ noted that the reporting of primary treating physician Dr. Capen in 2013 continued to find applicant Permanent & Stationary. With respect to the right knee surgery, Dr. Capen made no mention of the need for surgery prior to November 13, 2013, and his report of February 27, 2014 described the right knee as “not a part of applicant’s claim and not connected to her injury.”

With regard to the diabetes, the WCAB noted that “With respect to applicant’s assertion of aggravation of her diabetic condition, we observe that neither the reporting of Dr. Zlotolow nor that of Dr. Borsada provided an assessment of whether the alleged change in applicant’s condition transpired within five years from the original date of injury.”

“Applicant has not met the burden of establishing a new and further disability, arising within five years of the date of injury.”