Jesus “Jesse” Fonseca worked at Walmart’s Apple Valley distribution center in San Bernardino County for 14 years, During that time he claimed he competently executed all tasks and was commended for his hard work and dedication. His yearly performance reviews were always satisfactory and he received quarterly bonuses throughout the entirety of his employment. In addition, he received numerous awards, including model safety trucks, safety jackets, certificates and annual safety belt buckles. Also, he was a leader in his department, and was involved in a hiring committee, a safety committee, and a set run committee. Additionally, he rained drivers and was a mentor for approximately 12 drivers.

Fonseca was injured on the job when his semi-truck was rear-ended on June 19, 2017. He filed a workers’ compensation claim and his work restrictions varied from time to time, but for the most part they included no pushing, pulling and lifting over 5-10 pounds and no commercial driving. Fonseca claimed his doctors said that he should not be driving the 18-wheeler for 10-14 hours per day as was typical for his employment with Walmart. He also claimed that Walmart failed to accommodate each and every request for accommodations he made.

On January 31, 2018, Fonseca said he received a call from Walmart who said it .was informed that there was a report of fraud and questioned him for approximately 20 to 30 minutes. Walmart told him that they were informed that he was driving a vehicle and his restrictions provided that he could not drive. He informed Walmart that his restriction not to drive was as to commercial vehicles for commercial purposes, and did not understand those restrictions to include personal driving, especially because he drove to his doctor’s appointments and was not informed that he could not drive himself to his appointments. So he maintained that he did not do anything wrong.

On February 3, 2018, he claimed Walmart denied his last request for modified duty before he was terminated from employment.

His workers’ compensation claim continued without incident and he claims he did not receive any further information or communications from Walmart as to the alleged fraud until March 27, 2018, when Tisha Snyder allegedly called him and accused him of fraud and told him that his employment was going to be terminated because of gross misconduct and integrity. Snyder allegedly called him in the presence of a third party, his supervisor, Lou Lacroix.

The next day March 28, Fonseca allegedly attempted to discuss his termination with Walmart’s VP of transportation, Jeff Hammonds. However, Mr. Hammonds initially said he would get back to him by end of day, then he refused to speak with him since he was represented by workers’ compensation counsel. On March 29, 2018, while Fonseca was on lave for his work-related injuries, Walmart terminated his employment with the stated reason of gross misconduct and integrity.

His attorney claimed Walmart’s third-party workers’ compensation administrators investigated Fonseca, and videotaped him driving an RV, and determined no further action was warranted. Fonseca alleges that on November 18, 2018, he applied for two jobs and alleges he was allegedly “forced” to disclose he was fired for “gross misconduct and integrity” and as a result he was “not considered for either job.”

On July 7, 2019 he filed a First Amended Complaint in the United States District Court, Central District of California (case 5:19-cv-00821-JGB-KK which was later transferred to state court) and he alleged 11 causes of action, for Disability Discrimination, Failure to Accommodate, Failure to Engage in an Interactive Process, Retaliation under FEHA, Failure to Prevent Discrimination, Interference under CFRA, Retaliation under CFRA, Hostile Work Environment, Wrongful Termination in Violation of Public Policy; Intentional Infliction of Emotional Distress and Defamation.

The case ultimately proceed to a two phase trial in the San Bernardino Superior Court (CIVDS1909501). On November 19, 2024 the jury issued its Special Verdict for Defamation Per Quod (a legal term that describes a defamatory statement that requires additional evidence to prove its harmful effect on a plaintiff’s reputation). The Special Verdict found past economic losses of $522,323, future economic loss of $677,926, past non-economic loss of $3.5 million, Future non-economic loss of $5 million, (which totals $9.7M in actual damages) and additionally a phase II award of $25 million in punitive damages.

Lead attorney David M. deRubertis s reportedly said the evidence in the trial “showed that Walmart’s defamation of Jesse was part of a broader scheme to use false accusations to force injured truckers back to work prematurely or, if not, terminate them so that Walmart can cut down workers’ compensation costs,”

In a statement to Newsweek,Walmart spokesperson Kelly Hellbusch said, “This outrageous verdict simply does not reflect the straightforward and uncontested facts of this case. Accordingly, we will pursue all available remedies.”

The deRubertis Law Firm APC and Eldessouky Law APC represent Fonseca. Constangy Brooks Smith & Prophete LLP represents Wal-Mart.

The Oceanside Unified School District filed a lawsuit in U.S. District Court for the District of New Jersey against pharmaceutical and pharmacy benefit companies. The lawsuit alleges that three pharmaceutical manufacturers – Eli Lily, Novo Nordisk, and Sanofi – and three pharmacy benefit managers – Express Scripts, CVS Caremark, and Optum RX – colluded to inflate the price of insulin paid by the district’s self-funded health plan.

The lawsuit describes a scheme in which pharmacy benefit managers (PBMs) secure billions of dollars in rebates from pharmaceutical manufacturers in exchange for including their insulin products on the PBMs’ list of approved drugs, known as formularies. Manufacturers then artificially raise their prices to pay for those rebates, shadowing each other in lockstep rather than competing to offer lower consumer prices.

The lawsuit points out that insulin is a century-old medication, and while its production costs have decreased with little need for new investments in innovation, research, or development, its price has surged by more than 1000 percent since 2003. This dramatic increase is attributed to a pricing strategy involving pharmaceutical manufacturers and pharmacy benefit managers.

One of the attorneys representing the School District said in a press release that “like many organizations with self-funded health plans, the Oceanside Unified School District should not be forced to pay inflated and unreasonable insulin prices created by a scheme between big pharma and benefits managers to engage in unfair and deceptive trade practices.

This lawsuit aims to address these practices under state unfair business laws and federal Racketeer Influenced and Corrupt Organization (RICO) laws.”

According to the story published by NBCSandiego.com, Oceanside Unified School District is one of more than 200 school districts joining in the lawsuits nationwide. The attorney representing it says they’re anticipating more districts from San Diego County to come forward.

However, some employers with self-insured pharmacy benefits plans may become targets of litigation themselves. A study published by The American Journal of Managed Care last July conducted a national survey of 110 employer drug benefit decision makers for organizations with self-insured pharmacy benefits.

The study found that nearly two-thirds of employers reported having rebate agreements with a rebate guarantee for specialty drugs.The person or entity most influential to rebate strategy decisions was often a benefits consultant (37.3%), a human resources/benefits leader (29.1%), or a benefits broker (21.8%). Employers with rebate guarantees ascribed a higher level of importance to guarantees when selecting a PBM than employers receiving rebates without a guarantee and those who do not receive rebates.

The study concluded by saying “As the public discourse on PBMs and drug rebates continues, it is important to recognize the role employer benefits consultants may play in perpetuating employer reliance on guaranteed rebate arrangements.”

Responding to this study, the Mahoney Group warned “the reliance on drug rebate guarantees poses an elevated fiduciary risk for employers, especially in light of the Consolidated Appropriations Act (CAA) of 2021, which imposes tighter fiduciary duties on sponsors of group health plans.”

Large, self-insured employers are also beginning to face lawsuits from their workers over claims of mismanaging health and pharmaceutical benefits and violating their fiduciary duties under the Employee Retirement Income Security Act. Employees at Johnson & Johnson earlier this year filed a federal class-action lawsuit against their New Jersey-based employer alleging that over the years they have paid millions of dollars more for drugs than they should have. Wells Fargo was also sued by employees in a July class action for allegedly paying inflated prices to its contracted pharmacy benefits manager, Express Scripts.

In a statement to NBC 7, Eli Lily said, in part: “These allegations are baseless. It is the school district and other health plans – not Lilly – who negotiate the terms of their rebate arrangements, including whether to pass those rebates on to people who take insulin.”

CVS Caremark also responded, saying, in part, “Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture … we intend to vigorously defend against this baseless suit.”

The Leapfrog Group, an independent nonprofit focused on patient safety, released its fall 2024 Hospital Safety Grade, evaluating nearly 3,000 hospitals on their ability to prevent medical errors, accidents and infections. The Hospital Safety Grade uses up to 30 performance measures to assign an A, B, C, D or F to individual hospitals and uses a public, peer-reviewed methodology, calculated by top patient safety experts under the guidance of a National Expert Panel. It is transparent and free to the public. Leapfrog analysts use the data to observe national performance trends and state rankings.  

For fall 2024, Utah ranks number one with the highest percentage of “A” hospitals for the third cycle in a row, followed by Virginia and Connecticut in second and third. The latest Grades also show hospitals are making progress in patient safety across several performance measures including notable improvements in healthcare-associated infections, hand hygiene and medication safety.

Healthcare-Associated Infections (HAIs).

Since Leapfrog reported Hospital Safety Grades in fall 2022, when HAI rates were at their highest peak since 2016, average HAI scores have declined dramatically:

– – Central line-associated bloodstream infections (CLABSI) decreased by 38%.
– – Catheter-associated urinary tract infections (CAUTI) decreased by 36%
– – Methicillin-resistant Staphylococcus aureus (MRSA) decreased by 34%

Hand Hygiene

As Leapfrog detailed in its 2024 Hand Hygiene Report, since Leapfrog began public reporting a tough new standard for hand hygiene in 2020, the percentage of hospitals achieving the standard has soared from 11% to 78%.

Medication Safety

Medication errors are the most common type of error that occur in hospitals and the new Hospital Safety Grade suggests improvements in how hospitals prevent them. Two of the measures in the Leapfrog Hospital Safety Grade show this progress:

Computerized Physician Order Entry (CPOE): Leapfrog tracks how well hospitals use CPOE systems to catch common errors in prescribing, such as prescribing the wrong dose or prescribing a medication with a dangerous interaction with other medications the patient takes. Studies have shown CPOE systems can reduce harm from prescriber errors by as much as 55%. In 2018, only 65.6% of hospitals met Leapfrog’s Standard, while this year, that number rose to 88.1%.

Bar Code Medication Administration (BCMA): Leapfrog scores hospitals on deployment of BCMA systems, which use barcodes at the bedside to ensure the right patient gets the right medication at the right time. In 2018, 47.3% of graded hospitals met the standard, while this year, 86.9% did.

Trends in Safety Grades by State

Key findings on state performance on the fall 2024 Leapfrog Hospital Safety Grade include:

– – The states with the highest percentages of “A” hospitals are Utah, Virginia, Connecticut, North Carolina, New Jersey, California, Rhode Island, Idaho, Pennsylvania, Colorado and South Carolina
– – Utah ranks #1 in percentage of “A” hospitals for the third Safety Grade cycle in a row.
– – California ranks in the top 10 for the first time since fall 2014.
– – There were no “A” hospitals in Iowa, North Dakota, South Dakota or Vermont.

The Leapfrog Hospital Safety Grade is the only hospital ratings program focused exclusively on preventing medical errors and patient harm. It is fully transparent, free to the public and updated biannually in the fall and spring.

Detailed hospital performance information, including patient experience and safety measures, as well as grades for individual hospitals searchable by states and localities is available.

On June 16, 2009, fire destroyed the building in which defendant Cory Michael Hoehn and his roommate, Forest Kroll, had leased an apartment.

An investigator for the building’s insurer, plaintiff California Capital Insurance Company determined that “careless smoking” on the patio caused the fire. Although the investigator reached no conclusion about who started the fire or who was present when it began, California Capital sued Hoehn and Kroll in March 2010 for “general negligence,” alleging that they caused the fire due to “improperly discarded smoking materials.” The company asked for $472,326 in damages.

In March 2010, the company attempted to serve Hoehn with a complaint and summons in the lawsuit. The affidavit supporting the return of service stated that the summons and complaint were left with Shannon Smith and identified Smith as “Girlfriend,” “Co-Occupant,” and “a competent member of the household.” A copy of the summons and complaint was also mailed to Hoehn’s address. California Capital was unable to serve Kroll and dismissed him from the lawsuit.

In April 2011, approximately a year after attempting to serve Hoehn, California Capital requested and obtained a default judgment against Hoehn for $486,528, based on an investigator’s declaration that careless smoking habits caused the fire.

In March 2018, California Capital assigned its rights to the default judgment to Sequoia Concepts, Inc. Based on a May 2018 writ of execution, the sheriff of Placer County, in January 2020, served on Hoehn’s employer an earnings withholding order, placing a lien on Hoehn’s wages in order to begin payment of the default judgment.

In March 2020, Hoehn filed a motion to set aside the default judgment. In a supporting declaration, he stated as follows: He did “not recall receiving or seeing the Summons or Complaint at any time.” Shannon Smith “did not live with” him at the apartment and he “never received a summons or complaint or any legal paperwork from [her] at any time. He “did not receive any request for judgment or notice of a default judgment hearing” in the case. He learned that there had been a default judgment against him in January 2020, when his employer informed him that a lien had been placed on his wages. He promptly contacted an attorney who filed the motion to set aside the default judgment.

Hoehn’s motion sought relief on two theories: (1) the court should exercise its power under section 473(d) to vacate the judgment; and (2) the judgment was obtained by extrinsic fraud or mistake. The trial court, following a long line of appellate court opinions, held that relief under section 473(d) was not available because Hoehn made the motion more than two years after entry of the default judgment. Regarding Hoehn’s second asserted ground for relief, the court concluded that “the fact that the proof of service of summons misidentifies Shannon Smith as a co-occupant” did not “demonstrate that the statement constitutes extrinsic fraud.”

The Court of Appeal affirmed. Relying on Trackman v. Kenney (2010) 187 Cal.App.4th 175 (Trackman) and Rogers v. Silverman (1989) 216 Cal.App.3d 1114 (Rogers) – and rejecting Hoehn’s criticisms of those decisions – the court concluded that relief under section 473(d) was time-barred. It further concluded, like the trial court, that the mistake in service was insufficient to make out a claim of extrinsic fraud that would support equitable relief from a default judgment.

The California Supreme Court reversed in the case of California Capital Insurance Co. v. Hoehn -S277510 (November 2024)

Code of Civil Procedure section 473, subdivision (d) provides in relevant part that a court “may . . . on motion of either party after notice to the other party, set aside any void judgment or order.” Under this provision, a party may move to vacate a judgment on the ground of improper service of process.

A line of decisions, followed by the Court of Appeal has held that such motions must be made within a “reasonable time” if the challenged judgment is not void on its face and its invalidity must be established by extrinsic evidence. To set the outer limit for what constitutes a reasonable time, courts have borrowed the two-year time limit of section 473.5, which applies where proper constructive service was given but the defendant did not receive actual notice.

The California Supreme Court granted review in this case to decide whether these decisions are correct. It held that they are not, and said that this judicially created rule finds no footing in the statute’s text, has not been adopted by the Legislature, and lacks any sound justification.

The Supreme Court therefore reversed the Court of Appeal’s judgment.