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WCAB Has No Duty to “Rescue” Applicant From Take Nothing

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Robert Backus, a 40-year-old salesman for Schireson Bros, Inc., dba Volutone, filed two Applications, alleging that on 12/13/17 and during the period commencing 1/13/17 through 1/13/18, he sustained injury arising out of and occurring in the course of employment to his low back and lower extremities. The claims were denied by the employer.

Backus testified at the trial and the matter was continued for further testimony. At the next hearing, he testified and Rossana Harris was called as witness by defendant. The trial was continued and at the third hearing no additional exhibits were offered and there was no testimony; the matter was submitted for decision

The WCJ found that Robert Backus did not sustain injury arising out of and occurring in the course of employment to his low back and lower extremities; and Ordered that he take nothing by way of his injury claim.

The WCAB denied his Petition for Reconsideration in the panel decision of Robert Backus v Schireson Bros, Inc. – ADJ11847265-ADJ11741978 (June 2022).

Backus contended on Reconsideration that the reports from QME Allen Fonseca, M.D., were not properly considered regarding the issue of injury AOE/COE, that the reports from Dr. Fonseca are substantial evidence, that the decision was based on a “partial and unsubstantial record,” that his “unimpeached and uncontradicted” testimony must be accepted as substantial evidence, and that the record should be further developed.

Both the Panel and the WCJ noted that regarding applicant’s “unimpeached and uncontradicted” testimony, the WCJ stated in the Report, Backus, ”had highly questionable credibility due to the fact that he failed to disclose his prior back injury to either examining physician” … “and initially denied such injury under oath until confronted with the records of same.” The WCJ also noted that applicant’s testimony, “was in fact rebutted by Defense witness Rossana Harris.”

The Panel cited numerous authorities for the proposition that “It is well established that a WCJ’s opinions regarding witness credibility are entitled to great weight.“

The Panel went on to say that “most of applicant’s arguments are premised on his contention that the WCJ erred by not considering the reports from QME Dr. Fonseca.” However after having “reviewed the entire trial record, it is clear that the WCJ is correct; the trial record contains no reports from Dr. Fonseca.”

As to the issue of whether the record should be further developed, the panel said “applicant is correct that the Appeals Board has the discretionary authority to develop the record when the record does not contain substantial evidence pertaining to a threshold issue.”

Citing numerous case authorities, and referring to footnote 2 of the WCJ Report, the panel went on to say “if a party fails to meet its burden of proof by failing to introduce competent evidence, it is not the job of the Appeals Board to rescue that party by ordering the record to be developed.”

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OSHA Repeatedly Cites 1,600 Store Retailer for “Flagrant” Violations

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The U.S. Department of Labor has once again cited Dollar Tree Inc., one of the nation’s largest discount retailers, for workplace safety violations after it imposed $1.2 million in penalties following an inspection at two of its stores.

In it’s press release, OSHA claims that “one of the nation’s largest discount retailers continues to expose employees to the risk of injuries by flagrantly ignoring workplace safety regulations, this time with hazardous conditions found at two Ohio locations, in Maple Heights and Columbus.”

Since 2017, the U.S. Department of Labor’s Occupational Safety and Health Administration and state OSHA programs have conducted more than 500 inspections at Family Dollar and Dollar Tree – operated by their parent company, Dollar Tree Inc. – and found more than 300 violations. During these inspections,

OSHA says it routinely finds “exit routes, fire extinguishers and electrical panels dangerously obstructed or blocked; unsafe walking-working surfaces; and unstable stacks of merchandise.”

Following the Ohio inspections, OSHA proposed penalties of $1,233,364 for multiple violations.

“Family Dollar and Dollar Tree stores have a long and disturbing history of putting profits above employee safety,” said Assistant Secretary for Occupational Safety and Health Doug Parker. “Time and time again, we find the same violations – blocked or obstructed emergency exits and aisles, boxes of merchandise stacked high or in front of electrical panels and fire extinguishers. Each hazard can lead to a tragedy.”

On Jan. 31, 2022, OSHA initiated an inspection following an employee report of unsafe conditions at the Family Dollar store on Dunham Road in Maple Heights. The agency issued citations for one repeat violation and four willful violations, with proposed penalties of $685,777.

Two weeks later, OSHA opened an inspection on Feb. 10, 2022 in response to an employee complaint of water leaking through the ceiling causing wet floors and ceiling tiles on the floor at the Lockbourne Road store in Columbus. As a result, the agency proposed $547,587 in penalties for one serious and one repeat violation, and four willful violations.

In both inspections, OSHA found hazards related to, obstructed egress, unstable stacks, inaccessible electrical equipment and fire extinguishers, as well as trip and fall hazards caused by water, carts, boxes, trash and merchandise spread throughout walking-working surfaces in the retail areas and storerooms.

A Fortune 500 company, Dollar Tree has been a leading operator of discount variety stores in North America for more than 30 years.

Headquartered in Chesapeake, Virginia, the company operates more than 16,000 stores across the 48 contiguous states and five Canadian provinces, supported by a nationwide logistics network and more than 193,000 employees.

The company has 15 business days from receipt of its citations and penalties to comply, request an informal conference with each of OSHA’s area directors, or contest the findings before the independent Occupational Safety and Health Review Commission.

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Website Only Businesses Exempt from Disability Access Laws

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Abelardo Martinez, Jr. filed a civil lawsuit against Cot’n Wash, Inc. (CW) alleging a single violation of the Unruh Civil Rights Act (Civ. Code, § 51 et seq.). He alleged CW violated the Unruh Act by intentionally maintaining a retail website that was inaccessible to the visually impaired because it was not fully compatible with screen reading software.

The Unruh Act provides that “[a]ll persons within the jurisdiction of this state . . . no matter what their . . . disability . . . are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.” (Civ. Code, § 51, subd. (b).)

CW “owns, operates and provides to the public” a website that “provides access to [CW’s] array of products and services, including descriptions of its products, . . . [and an] online shop.” CW is not alleged to offer any products and services at any physical location, or in any manner other than through its website.

Martinez is “permanently blind and uses screen readers in order to access the internet and read website content.” There are “well-established, industry standard guidelines for ensuring websites are accessible to blind and visually-impaired people” using screen reading software.

The trial court sustained a demurrer to the complaint without leave to amend. The Court of Appeal affirmed the dismissal in the published case of Martinez v Cot’n Wash, Inc. – B314476 (August 2022).

On appeal, Martinez argues that the trial court erred in concluding (1) the alleged inaccessibility of CW’s website did not violate the Americans with Disabilities Act (42 U.S.C. § 12111 et seq.) (the ADA), specifically Title III of the ADA (42 U.S.C. §§ 12181−12189) (Title III) and (2) the complaint did not allege sufficient facts to establish CW’s discriminatory intent, which the Unruh Act requires in the absence of an ADA violation.

The Court of Appeal held that the trial court was correct on both points.The key issue was whether CW’s website constitutes a “place of public accommodation” for the purposes of Title III. (42 U.S.C. § 12182(a).)

“The ADA defines the phrase ‘. . . public accommodation’ by enumerating 12 categories of covered ‘places’ and ‘establishments,’ giving nonexclusive examples of types of enterprises falling into each category. [Citations.] The listed examples mainly reference physical locations. The implementing regulations similarly define a public accommodation by referring to a ‘facility,’ which is in turn defined as ‘all or any portion of buildings, structures, sites, complexes, equipment, rolling stock . . . or other real or personal property, including the site where the building, property, structure, or equipment is located.’ ‘

This is not surprising as there were no commercial websites when the ADA was enacted in 1990.

Martinez argued that the plain meaning of “place of public accommodation” is alone sufficient for the Court of Appeal to adopt the broader view taken by several federal courts – namely, that a physical place is not a necessary component of the ADA’s definition of a place of public accommodation.

However the opinion disagreed “that the plain language of the statute is alone sufficient to decide the issue – let alone sufficient to decide the issue in Martinez’s favor.” Dictionaries “overwhelmingly” define “place” as involving a physical location.

The opinion when on to note that “Congress and the DOJ have long been aware of the confusion in the courts regarding whether and when a website can be considered a ‘place of public accommodation,’ but have chosen not to clarify the issue through amendments to the statute or additional rulemaking. The federal circuit split began in the 1990’s, and resolving it – be it through judicial or legislative means – has been the topic of legal scholarship ever since then.”

“It thus appears that, no later than 2010, Congress and the DOJ (1) both recognized the need to clarify whether and under what circumstances a website might constitute a ‘place of public accommodation,’ and (2) agreed that such clarification should take a broad and inclusive approach. The only conclusion we can draw from their failure in the 12 years that followed to provide any such clarification through regulation or statute is that neither officially endorses this approach.”

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Medicare Reverses Plan To Limit Hospital Safety Data Next Year

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The Centers for Medicare & Medicaid Services (CMS) has pulled back on plans to pause public reporting on certain hospital safety data in the wake of pushback from patient safety advocates.

In Monday’s release of the final Inpatient Prospective Payment System (IPPS), CMS detailed numerous changes from a fiscal year 2023 proposal it had laid out in April. Among these was a decision to pause a composite measure of 10 patient safety indicators including pressure sores, falls and sepsis called PSI 90.

According to the report by Fiercehealcare.com, the agency would have stopped calculating these composite indicators in hospitals’ quality ratings for Medicare reimbursement and stopped publishing them as part of the Star Ratings found on the government’s Care Compare website.

CMS said at the time its decision was intended to shield hospitals that had been harder hit by the COVID-19 pandemic and, subsequently, received a financial and publicity hit compared with hospitals in less impacted regions.

The agency now seems to have split the difference, announcing Monday that it would maintain public awareness while seeking to avoid the unintended financial penalty.

“CMS will include the measure in Star Ratings in alignment with the feedback we received,” the agency wrote. “Although this measure will be publicly reported, it will not be used in payment calculations in the HAC to avoid unintentional penalties related to the uneven impacts of COVID-19 across the country.”

The agency’s decision received a warm welcome from The Leapfrog Group, a patient safety watchdog that has been petitioning the government via letters, reports and informational webinars to keep the hospital quality measure available to the public.

The agency’s new approach manages to continue reporting composite measures responsible for 25,000 deaths per year without the confounding influence of COVID-19, Leapfrog said in a release. More broadly, the group said it signals the agency’s “powerful support for transparency” and suggests similar data suppression proposals aren’t on the horizon.

“We were gratified to hear CMS reinforce their longstanding commitment to transparency and patient safety,” Leapfrog President and CEO Leah Binder said in a statement. “We thank CMS for their leadership – for listening to and championing patients and families, patient safety advocates, employers, purchasers, clinicians and all Americans who are deeply concerned about patient safety.”

Also calling for the rollback was the National Alliance of Healthcare Purchaser Coalitions. The nonprofit representing private and public sector members had written to CMS warning that the data were vital to purchasers’ decisions when building high-quality networks which, alongside safety concerns, would lead to higher costs and the perpetuation of inequities.

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WCAB Affirms Apportionment and Clarifies Hikida Rule

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On March 6, 2015 Cristina Jackson was working as a package handler for FedEx Ground Package System, Inc. when she sustained injury arising out of and in the course of employment to her right knee and left knee. The employer accepted the claim and provided medical treatment and indemnity benefits.

Dr. Han reported in the case as a QME. He diagnosed her with bilateral post-traumatic osteoarthritis of the knee post knee replacement, internal derangement of the right knee with lateral meniscus tear and internal derangement of the left knee with lateral and medial meniscus tear. He described Applicant’s medical history which included prior bilateral meniscectomies in 1995 and 1996 and a left ACL reconstruction in 1992.

In his April 5, 2019 report, Dr. Han apportioned 60% of the disability to pre-existing and 40% to the industrial injury. He explained that Jackson had prior surgeries, fell off a curb in 2016, and had obesity resulting in degenerative changes that made the bilateral total knee replacement surgeries necessary, which is the basis for the permanent disability.

After a trial on the issue of permanent disability, the WCJ found that the injury resulted in permanent disability of 21%, after 60% apportionment to “other factors” of permanent disability under Labor Code section 4663(c)

In her Petition for Reconsideration, Jackson contends that the medical opinion of Dr. Han is not substantial evidence of apportionment under the requirements of Escobedo v. Marshalls (2005) 70 Cal.Comp.Cases 604 [Appeals Board en banc] and that since applicant’s permanent disability rating is based on her bilateral knee replacement surgeries necessitated by the industrial injury, she is entitled to an unapportioned award pursuant to Hikida v. Workers’ Comp. Appeals Bd. (2017) 12 Cal.App.5th 1249 [82 Cal.Comp.Cases 679].

The WCAB panel affirmed the apportionment, however it clarified the WCJ’s discussion of Hikida in the panel decision of Jackson v FedEx ADJ10048474 (June 2022)

After the panel concluded that “Dr. Han’s three medical reports, taken together, are substantial evidence justifying the WCJ’s determination that 60% of applicant’s permanent disability is caused by non-industrial ‘other factors’ under Labor Code section 4663(c)” it went on to review the Hikida decision in greater detail.

“Dr. Han convincingly explained that apportionment of the need for those surgeries applied equally to apportionment of the permanent impairment. However, we do not adopt or incorporate the discussion of Hikida found in the WCJ’s Report.”

The panel went on to explain that “the Hikida principle is not limited to situations involving failed treatment or new injuries. In County of Santa Clara v. Workers’ Comp. Appeals Bd. (Justice) (2020) 49 Cal.App.5th 605, 615 [85 Cal.Comp.Cases 467], however, the Court of Appeal does seem to have made an attempt to limit Hikida, with the Court in Justice stating: ‘Hikida precludes apportionment only where the industrial medical treatment is the sole cause of the permanent disability.’ ” (Italics added.)

“The instant case is more like Justice than Hikida. In Hikida, the injured employee developed the entirely new medical condition of CRPS following her treatment and surgery, whereas here, as in Justice, the applicant had a significant prior history of the same knee problems and degenerative conditions, some of them non-industrial, which continued to the date of injury.”

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Insurance Commissioner Sues Carrier for Illegal Marketing Tactics

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The California Insurance Commissioner announced a major legal action against Mercury Insurance for violating consumer protection laws, including by selling Mercury’s highest-priced policy to “good drivers” instead of the lowest-priced policy for which good drivers qualify. This legal enforcement action comes after a Department investigation found numerous areas where Mercury’s business practices harmed policyholders across its private passenger auto, homeowners, commercial auto, and commercial multi-policy lines of insurance.

This action comes after Mercury previously paid a $27.6 million fine in August 2019 that was levied by the Department of Insurance, the largest fine against a property and casualty insurer in Department history. The California Supreme Court upheld the Department’s action finding Mercury charged consumers unapproved and unfairly discriminatory rates.

Like that case, the Department’s latest legal action against Mercury also alleges numerous violations of Proposition 103, passed by the voters in 1988 to allow the Insurance Commissioner to protect consumers from excessive and unfairly discriminatory rates.

By passing Proposition 103 in 1988, California voters mandated a 20 percent “good driver discount” for consumers who maintain a safe driving record. The Department’s investigation found that Mercury attempted to evade the requirements of Proposition 103 by steering good drivers into a higher-priced plan.

Mercury maintains two insurance companies in California: Mercury Insurance Company (MIC), which is exclusively for “good drivers” and charges lower rates, and California Automobile Insurance Company (CAIC), which charges higher rates for nearly identical coverage and insures all drivers. The Department’s investigation found a number of ways that Mercury illegally sold and steered drivers to its company with the higher-priced plan, including:

– – Directing its agents to provide quotes in its higher-priced plan using artificially low mileage, giving the appearance of lower rates in order to entice consumers.
– – Directing its agents to refuse to sell a lower-priced policy if a good driver had been canceled for non-payment of premium or had an accident for which the driver was not at fault, neither of which is allowed under law.
– – Only offering a monthly payment option in the higher-priced plan.
– – Dissuading good drivers from switching to the lower-priced plan with misleading language for the nearly identical plans, including using language such as “an [MIC] policy may be offered for a lower premium, but also provides somewhat less coverage and more restrictive payment options than the [CAIC] policy you currently have.”
– – Falsely representing that both plans charge policy fees, when in fact only the higher priced plan charged policy fees.
– – Subjecting good drivers without prior coverage to different terms and conditions than other drivers.

The Department alleges that Mercury also overcharged businesses and homeowners in other lines of insurance through a variety of illegal practices that resulted in unfairly discriminatory rates. For instance, Mercury increased premiums for commercial drivers who had been in an accident where they were not at fault and charged a higher premium for commercial drivers who had previously held a Mercury policy but failed to satisfy a requirement that they be listed as the named policyholder with another company for the previous two years, treating them as if they were new drivers.

The allegations – 34 in all – are detailed in the Department’s Notice of Non-Compliance.

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Major California Employer Places Employee Well Being First

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Cisco Systems, Inc., commonly known as Cisco, is an American-based multinational technology conglomerate corporation headquartered in San Jose, California. Cisco total number of employees in 2021 was 79,500, a 2.58% increase from 2020.

And the California tech giant says it has been determined to monitor the mental health of its nearly 80,000 employees during all the current national and international turmoil.

That’s why Chairman and CEO Chuck Robbins, as well as head of HR Francine Katsoudas, ordered a team of company researchers to create and validate a measure of employee well-being. Representatives of the team shared their process and findings in a presentation at the Workhuman Live conference in Atlanta.

“Focusing on people first has always been our way” according to a post by Katsoudas on the Company blog. COVID-19 tested Cisco’s resolve to be compassionate, understanding, and responsive to the challenges and crises.

She highlighted some of the tools and strategies used at Cisco:

– – Virtual Fitness – Employees and their families can participate in virtual fitness classes and training tailored to their needs.
– – Extending EAP into the community – Our U.S. employees can share a free emotional crisis and support help line with friends and family who don’t have access to resources. We hope this helps to manage the stress and anxiety related to challenges such as COVID-19 and socio-economic issues. And, we appreciate our partners who are helping to offer this service.
– – Telemental Health – As we work to support mental health while reducing the stigma surrounding it, we’ll make it easier for people to find mental health professionals by offering solutions that remove the geographical and physical barriers that prevent access.
– – Rethink – This digital platform helps to support parents of children with a learning, social, behavioral challenge, or a developmental disability. Rethink offers resources and practical advice, along with 1:1 advice with personal phone consultations.
– – Benefits Advisor – Combining both technology and personalized coaching, this solution will help employees make holistically sound decisions regarding their personal health and financial well-being.
– – Chronic Condition Management – Those living with musculoskeletal issues, substance abuse, and diabetes can access digital resources to deepen their understanding and improve their outcomes.

An earlier this year, Cisco published a study showing that hybrid working has helped improve employee wellbeing, work-life balance, and performance across the world.

Cisco’s “Employees are ready for hybrid work, are you?” study found that six in 10 (61%) employees believe that quality of work has improved. A similar number (60%)felt that their productivity has enhanced. Three-quarters of employees (76%) also feel their role can now be performed just as successfully remotely as in the office.

However, the survey of 28,000 employees from 27 countries reveals that only one in four think that their company is ‘very prepared’ for a hybrid work future.

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Attorney General Lawsuit Says CVS Health Abuses its Market Power

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The New York Attorney General filed an antitrust lawsuit in a state court in Manhattan last Thursday against CVS Health Corp., saying it forced hospitals that serve the state’s low-income patients to pay millions of dollars for exclusive access to discounted prescription drugs.

The Attorney General claims that CVS did not allow New York safety net hospitals and clinics to use the company of their choice to obtain subsidies on prescriptions filled at CVS pharmacies through the 340B federal program. This program allows safety net hospitals and clinics to purchase certain drugs at a discount from pharmaceutical companies and use the savings for patient care. Safety net health care providers in New York obtain substantial savings from the 340B program, which are critical to their viability and to the health of the surrounding community. To realize the benefits of the 340B program, safety net hospitals and clinics must contract with the pharmacies that are used by their patients. Under the CVS scheme, thousands of safety net health care providers across the state were only allowed to use Wellpartner to process claims filled at CVS retail and specialty pharmacies, forcing them to incur millions of dollars in additional costs to hire and train staff and change their data systems to align with Wellpartner’s system.

The lawsuit alleges that New York patients were the ultimate victims of CVS’s unfair practice, which siphoned off critical federal funding from safety net health care providers that could have used the funds to improve access to health care for the neediest New Yorkers – including New Yorkers without health insurance or an ability to pay for health care.

As of 2021, there were more than 4,440 safety net health care providers enrolled in the 340B program across New York, which include Federally Qualified Health Centers (FQHCs), critical access hospitals, Ryan White HIV/AIDS Program grantees, rural referral centers, sole community hospitals, black lung clinics, community health centers, family planning clinics, and tuberculosis clinics. These facilities primarily treat low-income patients and rely on 340B savings to fund patient care services to underserved and vulnerable populations.

Safety net health care providers bear full legal responsibility for keeping records and may only collect 340B revenues on certain prescriptions, including patient prescriptions for medications used to treat HIV/AIDS and hepatitis C. Most safety net providers contract with a third-party administrator, or TPA, to administer their 340B programs. The TPAs confirm eligibility for each transaction and keep detailed records, as required by the federal 340B program rules.

In 2017, CVS acquired a TPA, Wellpartner, and began requiring New York hospitals to use Wellpartner rather than another TPA. The Office of the Attorney General’s (OAG) investigation found CVS pharmacies did not contract with hospitals that do not use Wellpartner as their TPA, a violation of New York’s antitrust laws. Since there was no contract, the hospitals and clinics were unable to collect 340B funds that were rightfully theirs. Hospitals and clinics had little choice – they either had to go along with CVS’s self-serving scheme, or simply forgo the benefits to which they were otherwise entitled under the 340B program.

The OAG found that CVS’s plan was to leverage the strength of its retail pharmacy network in New York to force hospitals to use Wellpartner, rather than any other TPA. Many hospitals objected because they were already using other TPAs.

The lawsuit alleges that CVS’s actions undermined the goal of the 340B program and hurt the financial condition of safety net health care providers. CVS required health care providers to transition at a significant cost to Wellpartner if the hospitals wanted to obtain 340B revenues from prescriptions filled at CVS pharmacies. Many hospitals switched to Wellpartner for all their 340B needs because it was not practical or economical to pay for two TPAs. In addition, CVS knew that the 340B program rules do not allow hospitals to steer patients away from certain pharmacies, so health care providers had no choice in practice — if they didn’t go along with CVS’s tying scheme, they simply couldn’t collect 340B savings for patients who choose to go to CVS pharmacies.

Through her lawsuit, the Attorney General is seeking injunctive relief, equitable monetary relief for the lost revenue and additional costs safety net health care providers were forced to incur, and civil penalties for CVS’s unfair and illegal business practices. In addition, the Attorney General seeks to require CVS to inform all safety net health care providers that they are not required to exclusively use Wellpartner.

“These allegations are without merit and we will defend ourselves vigorously,” CVS said in a statement.

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Settlement of Individual Suit Does Not Bar Employee’s New PAGA Suit

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Christina Howitson worked for Evans Hotels, LLC and The Lodge at Torrey Pines Partnership, L.P. as a room service server at The Lodge at Torrey Pines for about one month, between April and May 2019.

On March 26, 2020, Howitson served the California Labor and Workforce Development Agency (LWDA) with notice of her intention to file a Private Attorneys General Act (PAGA) action against Evans Hotels for violations of the Labor Code. The required 65-day statutory waiting period ended on June 1, 2020 without any response by LWDA.

On May 26, 2020, Howitson filed a lawsuit – an individual and putative class action lawsuit against Evans Hotels. This first Lawsuit did not include any PAGA claims, instead asserting 10 causes of action based on myriad alleged violations of the Labor Code and unfair competition laws

On June 15, 2020 Evans Hotels served Howitson with an arbitration demand and an offer to compromise for $1,500 plus attorney fees pursuant to Code of Civil Procedure section 998. On July 20, 2020, Howitson accepted the 998 Offer. The 998 Offer in part provided, “Judgment is to be entered in favor of Plaintiff . . . in her individual capacity..” .) The trial court entered judgment for Howitson “in her individual capacity.”

About 10 days after accepting the 998 Offer, Howitson filed the instant PAGA action against Evans Hotels “based on the same factual predicates as the first lawsuit. Evans Hotels demurred, alleging claim preclusion (i.e., res judicata) barred this second lawsuit as a result of the judgment in the first Lawsuit. The trial court sustained the demurrer without leave to amend. The Court of Appeal reversed in the published case of Howitson v Evans Hotels D078894 (July 2022).

This case (1) involves the legal issue of whether an employee who settles individual claims against the employer for alleged Labor Code violations is subsequently barred by claim preclusion from bringing a PAGA enforcement action against the employer for the same Labor Code violations when, prior to settlement, the employee could have added the PAGA claims to the existing action; and (2) requires the application of claim preclusion principles.
Claim preclusion applies to “matters which were raised or could have been raised, on matters litigated or litigatable in the prior action.”

Three requirements must be met. First, the second lawsuit must involve the same “cause of action” as the first lawsuit. Second, there must have been a final judgment on the merits in the prior litigation. Third, the parties in the second lawsuit must be the same (or in privity with) the parties to the first lawsuit.

Here the “harm suffered” by Howitson in the first lawsuit is not the same harm as that suffered by the state in the second lawsuit. Damages in the first case are intended to be compensatory, to make one whole. Accordingly, there must be an injury to compensate. On the other hand, Civil penalties, like punitive damages in the second case, are intended to punish the wrongdoer and to deter future misconduct.

Because the two actions involve different claims for different harms and because the state, against whom the defense is raised, was neither a party in the prior action nor in privity with the employee, the Court of Appeal conclude the requirements for claim preclusion are not met in this case.

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Teva Resolves Nationwide Opioid Cases – Including California – for $4.25B

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Teva, an Israel-based drug manufacturer, makes Actiq and Fentora, which are branded fentanyl products for cancer pain, and a number of generic opioids including oxycodone. Teva has reached an agreement in principle with the working group of States’ Attorneys General, counsel for Native American Tribes, and plaintiffs’ lawyers representing the States and subdivisions, on the primary financial terms of a nationwide opioids settlement.

The California Attorney General also said that an agreement in principle on key financial terms with opioid manufacturer Teva. The agreement would provide up to $4.25 billion to participating states and local governments to address the opioid crisis. While critical details of the settlement remain the subject of ongoing negotiations, Teva disclosed the agreement Tuesday ahead of its earnings announcement Wednesday.

States alleged that Teva:

– – Promoted potent, rapid-onset fentanyl products for use by non-cancer patients;
– – Deceptively marketed opioids by downplaying the risk of addiction and overstating their benefits, including encouraging the myth that signs of addiction are actually “pseudoaddiction” treated by prescribing more opioids; and
– – Failed to comply with suspicious order monitoring requirements along with its distributor, Anda.

The parties have agreed on the following financial terms:

– – Teva will pay a maximum of $4.25 billion in monetary payments over 13 years. This figure includes amounts Teva has already agreed to pay under settlements with individual states, funds for participating states and local governments, and the $240 million of monetary payments in lieu of product described below.
– – As part of the financial term, Teva will provide up to $1.2 billion in generic naloxone (valued at Wholesale Acquisition Cost or WAC) over a 10-year period or $240 million of cash in lieu of product, at each state’s election. Naloxone is used to counteract overdoses.
– – The settlement will build on the existing framework that states and subdivisions have created through other recent opioid settlements.

States, localities and tribes must ratify the proposed settlement, and a final settlement remains contingent on agreement on critical business practice changes and transparency requirements. The agreement is also contingent upon final documentation among the working group and Teva, and reaching the thresholds for participation that will be set forth in the final agreement.

The agreement is also contingent upon Teva reaching an agreement with Allergan with respect to any indemnification obligations, and Allergan reaching a nationwide opioids settlement.

There are no remaining trials currently scheduled against Teva in 2022, with the possible exception of the relief phase of the trial in the New York opioids litigation; additionally, Teva, New York State, and its subdivisions are engaged in ongoing settlement negotiations.

The negotiations are being led by the following states: California, Illinois, Iowa, Massachusetts, New York, North Carolina, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and Wisconsin. While New York is among the 12 states that negotiated this proposed settlement framework, Teva and New York are still engaged in further negotiations.

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