Monroe Operations, LLC, doing business as Newport Healthcare is a nationwide behavioral healthcare company which provides therapy for individuals with mental health issues. It has residential treatment facilities across the country including in California, Utah, Minnesota, Connecticut, and Washington.

Prior to starting her employment at Newport Healthcare, Karla Velarde worked as a customer service agent for Air Tahiti. However, she was laid off in March 2020 due to the COVID-19 pandemic. She was unemployed for nine months until Newport Healthcare agreed to hire her as a care coordinator.

Newport Healthcare required Velarde to attend an orientation scheduled for her first day of work. Upon arriving at Newport Healthcare’s office, Velarde was escorted to a large conference room where she waited until an HR manager arrived. The HR manager presented Velarde with “a stack of [31] documents and told [her she] was required to complete the forms before [she] could start working.” The HR manager told her, ‘“we gotta get through [these to] get you onboard. We’ll try to get through them as fast as possible.”’ Velarde “felt pressured to fill out the forms quickly, since [the HR manager] was waiting for [her] . . . .”

One of the documents was an arbitration agreement, which Velarde refused to sign because she “did not understand what it was.” Velarde told the HR manager that because she did not understand what it was, she did not feel comfortable signing it. The HR manager told her, “‘if there are ever any issues, [the arbitration agreement] will allow us to resolve them for you.”’ Velarde asked if she needed to sign the agreement in order to start working. The HR manager responded, ‘“Yes. This will help us resolve any issues without having to pay lawyers.”’ Velarde executed the agreement because she “knew that [she] had to sign it to begin working . . . .”

Newport Healthcare later terminated Velarde’s employment. Velarde filed a lawsuit alleging, among other things, discrimination, retaliation, and violation of whistleblower protections against Newport Healthcare and its director of residential services, Amanda Seymour.

Defendants filed a motion to compel arbitration which the trial court denied. The trial court ruled Newport Healthcare pressured Velarde to sign the agreement, which she did not want to do, and the agreement unlawfully prohibited Velarde from seeking judicial review of an arbitration award. On appeal, Appellants take issue with the trial court interpreting the agreement in a manner which bars judicial review of an arbitration award.

The Court of Appeal affirmed the trial court denial of the motion to compel arbitration in the published case of Velarde v. Monroe Operations, CA4/3 – G063626 – (June 2025).

“Procedural unconscionability ‘addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.’” (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 492.) “This element is generally established by showing the agreement is a contract of adhesion, i.e., a ‘standardized contract which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’” (Ibid.)

“Substantive unconscionability looks beyond the circumstances of contract formation and considers ‘the fairness of an agreement’s actual terms’ [citation], focusing on whether the contract will create unfair or one-sided results [citation].” (Ramirez, supra, 16 Cal.5th at p. 493.) Substantively “[u]nconscionable terms “‘impair the integrity of the bargaining process or otherwise contravene the public interest or public policy”’ or attempt to impermissibly alter fundamental legal duties. [Citation.] They may include fine-print terms, unreasonably or unexpectedly harsh terms regarding price or other central aspects of the transaction, and terms that undermine the nondrafting party’s reasonable expectations.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 130 (OTO).)

After a review of the record, the Court of Appeal noted that there “was extensive evidence of procedural unconscionability, with an adhesive contract, buried in a stack of 31 documents to be signed as quickly as possible while a human resources (HR) manager waited, before Velarde could start work that same day.

“Most problematically, in response to Velarde’s statements that she was uncomfortable signing the arbitration agreement as she did not understand it, false representations were made by Newport Healthcare’s HR manager to Velarde about the nature and terms of the agreement.”

“These representations, which specifically and directly contradicted the written terms of the agreement, rendered aspects of the agreement substantively unconscionable. These procedural and substantively unconscionable aspects, taken together, render the agreement unenforceable.”

Marlean Ames, a heterosexual woman employed by the Ohio Department of Youth Services, applied for a management position in 2019 but was denied in favor of a lesbian candidate. She was subsequently demoted from her program administrator role to a lower-paying secretarial position, which was then filled by a gay man.

Ames filed a lawsuit under Title VII, alleging discrimination based on her sexual orientation. The District Court granted summary judgment to the agency, citing Sixth Circuit precedent requiring majority-group plaintiffs (like heterosexuals) to show “background circumstances” indicating discrimination against the majority. The Sixth Circuit affirmed, reinforcing a circuit split on whether majority-group plaintiffs face a higher evidentiary burden under the McDonnell Douglas framework.

In the unanimous decision in Ames v Ohio Department of Youth Services – 23-1039 – (June 2025), the United State Supreme Court vacated the Sixth Circuit’s judgment and remanded the case, holding that Title VII does not impose a heightened evidentiary standard on majority-group plaintiffs. The “background circumstances” rule, which required majority-group plaintiffs to provide additional evidence suggesting that the employer discriminates against the majority, was deemed inconsistent with Title VII’s text and Supreme Court precedents.

Ohio conceded that Title VII imposes the same standard for all plaintiffs but argued the “background circumstances” rule was not a heightened burden. The Court rejected this, noting the Sixth Circuit explicitly applied a higher standard to Ames because of her heterosexual status.

The Court emphasized that Title VII prohibits discrimination against “any individual” based on protected characteristics (race, color, religion, sex, or national origin), without distinguishing between majority and minority groups. The statute’s focus is on individual protection, not group status (citing Bostock v. Clayton County 140 S.Ct. 1731 (2020) 590 U.S. 644).

Prior cases, such as Griggs v. Duke Power Co. 401 U.S. 424 (1971) and McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273 (1976) confirm that Title VII applies equally to all individuals, regardless of majority or minority status. The “background circumstances” rule violated this principle by imposing a higher burden on majority-group plaintiffs.

The Court reiterated that the McDonnell Douglas framework is a flexible, burden-shifting tool to evaluate disparate-treatment claims based on circumstantial evidence. The prima facie burden is not onerous, and the Sixth Circuit’s additional requirement for majority-group plaintiffs was an inflexible and improper deviation.

Justice Thomas agreed with the majority but wrote separately to criticize judge-made doctrines like the “background circumstances” rule and the McDonnell Douglas framework itself.

He argued that the “background circumstances” rule lacks textual basis in Title VII, distorts the statute by imposing unequal burdens, and is unworkable due to the difficulty of defining “majority” status (e.g., by race, sex, or religion) in varying contexts.

Thomas expressed skepticism about the McDonnell Douglas framework’s applicability at the summary judgment stage, noting its lack of textual grounding, incompatibility with Federal Rule of Civil Procedure 56, failure to capture all ways to prove discrimination (e.g., mixed-motive cases), and tendency to cause judicial confusion. He suggested the Court reconsider its use in a future case.

The decision eliminates a circuit split, clarifying that Title VII’s protections apply uniformly to all plaintiffs, regardless of majority or minority status, and reinforces the statute’s focus on individual discrimination. It also signals potential future scrutiny of the McDonnell Douglas framework itself.

Hector Gutierrez began working as a school janitor and maintenance worker in August 2011 at Inglewood Middle School Academy. The school operated under the control of Inner City Education Foundation (ICEF).

On February 14, 2012, at the end of the school day, Gutierrez walked to the school’s front office, where school employees had gathered and were laughing. The principal angrily approached plaintiff and, “out of nowhere,” violently kicked him in the groin, causing plaintiff to bend over in “agony.” Several employees saw the incident and laughed. Plaintiff suffered severe pain and emotional distress and has been unable to work since the injury. His last day of work due to the injury was June 29, 2012.

Later, Gutierrez filed three separate worker’s compensation claims with the Workers’ Compensation Appeals Board. Two of those claims – one with an injury date of February 14, 2022, and another filed January 12, 2023 – related to injuries he allegedly sustained from the kick to the groin. As to the January 2023 claim, Gutierrez alleged, “In retrospect beginning 3 weeks or so later after the kick applicant believes depression and other factors caused by the assault unbeknownst to him has caused him to become morbidly obese.”

On January 10, 2023, Gutierrez (in pro. per.) sued ICEF for general negligence, intentional tort, and sexual assault and battery based on injuries he allegedly sustained from the principal’s kick to his groin almost 11 years earlier. ICEF demurred on the following grounds: (1) the Worker’s Compensation Appeals Board had exclusive jurisdiction over plaintiff’s injury claims; (2) worker’s compensation was plaintiff’s exclusive remedy; and (3) plaintiff’s claims were time barred. Plaintiff did not file an opposition. On April 18, 2023, the court sustained ICEF’s demurrer with leave to amend.

Plaintiff filed his FAC on May 9, 2023. He again pleaded the same causes of action, except for “intentional tort,” and added causes of action – without the court’s permission – for negligent and intentional infliction of emotional distress, as well “malice.” ICEF demurred on the same grounds as before and argued the new causes of action were time-barred, insufficiently pleaded, or weren’t causes of action at all.

The court sustained ICEF’s demurrer without leave to amend. The court found plaintiff’s claims were barred by the statute of limitations and the FAC’s allegations were insufficient to state a cause of action. The court also noted plaintiff failed to allege sufficient facts to support an exception to worker’s compensation exclusivity.

After judgment had been entered, on September 27, 2023, plaintiff moved for reconsideration. Plaintiff accused ICEF’s attorneys of fraud and of having “bamboozled” the court into believing counsel had agreed to give plaintiff more time to respond to discovery, not to a continuance of the demurrer hearing. Plaintiff argued “[d]efendants” violated his due process rights.

The court denied plaintiff’s motion for reconsideration. Plaintiff appealed the judgment of dismissal on the grounds he was denied his federal constitutional rights to due process and of access to the courts under the Fourteenth and First Amendments, respectively.

The Court of Appeal affirmed the trial court in the unpublished case of Gutierrez v Inner City Education Foundation CA2/3 – B333337 – (June 2025)

The Court of Appeal noted it reviewed the record and found no error.

“The record shows plaintiff received adequate, effective, and meaningful access to the court. After ICEF demurred to plaintiff’s initial complaint, he had an opportunity to file his FAC. At plaintiff’s request, the court continued the hearing on ICEF’s demurrer to the FAC from July to August 2023 due to plaintiff’s medical emergency. Before ruling on ICEF’s demurrer, the court considered the written response plaintiff filed, even though he filed the response late and did not appear at the hearing. (Code Civ. Proc., § 1005, subd. (b) [opposition papers must be filed nine court days before the hearing].)8 Indeed, the court explained in detail plaintiff’s position in its ruling.”

“Nor did plaintiff demonstrate he did not receive due process under the Fourteenth Amendment.”  … “Accordingly, plaintiff has failed to meet his burden on appeal to demonstrate the court erred in sustaining ICEF’s demurrer to his FAC or that it abused its discretion in denying plaintiff leave to amend the FAC.”

Disbarred plaintiffs’ personal injury attorney Thomas Vincent Girardi was sentenced to 87 months in federal prison for leading a years-long scheme in which he embezzled tens of millions of dollars of settlement money that belonged to his clients, some of whom awaited payment for treatment of severe physical injuries.

Girardi, 86, formerly of Pasadena and who now resides in Seal Beach, was sentenced by United States District Judge Josephine L. Staton also ordered Girardi to pay a $35,000 fine and $2,310,247 in restitution. Judge Staton ordered Girardi to surrender to federal authorities no later than July 17.

Girardi was found guilty by a jury in August 2024 of four counts of wire fraud.

A once-powerful figure in California’s legal community, Girardi ran the now-defunct downtown Los Angeles law firm Girardi Keese. For years, Girardi misappropriated and embezzled millions of dollars from client trust accounts at his law firm. The scheme involved defendant Girardi stealing millions of dollars in client settlement funds and failing to pay Girardi Keese clients – some of whom had suffered serious injuries in accidents – the money they were owed.

In carrying out his criminal conduct, from October 2010 to late 2020, Girardi operated Girardi Keese like a Ponzi-scheme by providing a litany of lies for failure to pay clients and directing law firm employees, including co-defendant and former Girardi Keese CFO Christopher Kazuo Kamon, to make incremental payments of newly obtained settlement funds to previously defrauded clients or using the new funds to pay other unrelated expenditures.

Girardi sent lulling communications to the defrauded clients that, among other things, falsely denied that the settlement proceeds had been paid and falsely claimed that Girardi Keese could not pay the settlement proceeds to clients until certain purported requirements had been met. These bogus requirements included addressing supposed tax obligations, settling bankruptcy claims, obtaining supposedly necessary authorizations from judges, and satisfying other debts.

Girardi also diverted tens of millions of dollars from his law firm’s operating account to pay illegitimate expenses, including more than $25 million to pay the expenses of EJ Global, a company formed by his wife related to her entertainment career, as well as spent millions of dollars of Girardi Keese funds on private jet travel, jewelry, luxury cars, and exclusive golf and social clubs.

At the end of 2020, as Girardi and his law firm faced mounting legal problems related to his years-long theft of client funds, Girardi Keese was forced into involuntary bankruptcy. The State Bar of California disbarred Girardi in July 2022.

Relatedly, co-defendant Kamon, 51, formerly of Encino and Palos Verdes and who was residing in The Bahamas at the time of his November 2022 arrest on a federal criminal complaint, pleaded guilty in October 2024 to two counts of wire fraud. Kamon, the long-time head of the accounting department at Girardi Keese, aided and abetted Girardi’s fraud scheme and embezzled millions of dollars from Girardi Keese itself for his own benefit.

On April 11, Kamon was sentenced to 121 months in custody and ordered to pay $8,903,324 in restitution. Kamon has been in federal custody since November 2022.

Kamon has agreed to plead guilty to federal fraud charges in Chicago where he is charged along with former Girardi Keese lawyer David R. Lira, Girardi’s son-in-law. Trial in that case is scheduled to start on July 14. Girardi was dismissed from the Chicago case because of his conviction and sentencing in this case.

IRS Criminal Investigation and the FBI investigated this matter. The Office of the United States Trustee provided assistance.Assistant United States Attorney Scott Paetty of the Major Frauds Section prosecuted this case.

In 2017, Michael Cash worked as a captain in the Los Angeles County Fire Department and also served as a training captain for the Department’s training academies. When plaintiff complained to the Department’s battalion chief of training that the chief should have terminated a female recruit for failing a test that ordinarily results in automatic termination from a training academy, plaintiff was removed as a training captain in future academies.

Cash thereafter sued the County of Los Angeles (the County), alleging that his removal constituted (1) retaliation for reporting gender discrimination in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12940 et seq.), (2) a failure to take reasonable steps to prevent such etaliation in violation of FEHA, and (3) retaliation for whistleblowing in violation of Labor Code section 1102.5.1

The matter proceeded to a 20-day jury trial in the spring of 2023. The jury found for plaintiff on all three claims and awarded him $450,000.

The County filed a motion for judgment notwithstanding the verdict (JNOV) or, alternatively, for a new trial. After a round of briefing, which included an opposition from plaintiff that included 28 exhibits encompassing 385 pages, the trial court denied the motion.

In August 2023, plaintiff filed a motion requesting $705,730 in attorney fees. In support of that motion, plaintiff’s attorney declared that the law firm’s hourly rates were (1) $600 for partners, (2) $400 for associates, and (3) $150 for paralegals; however, the invoices submitted in support of the $705,730 total reflected a higher hourly rate of $500 for associates and $200 for paralegals. In October 2023, plaintiff filed a supplemental request, seeking an additional $29,580 in attorney fees related to (1) additional hours opposing the County’s post-trial motions, (2) filing the motion for attorney fees, and (3) opposing the County’s motion to tax costs. This brought plaintiff’s request to a total of $735,310.

Following a hearing, the trial court awarded plaintiff $455,546 in attorney fees. The court started from plaintiff’s originally proffered lodestar of $705,730, declining to include plaintiff’s supplemental request in the lodestar calculation. From that amount, the court deducted $54,950 to reflect the lower billing rates for associates and paralegals set forth in plaintiff’s attorney’s declaration. The court deducted a further $195,234—that is, an “across-the-board percentage cut” of 30 percent from the adjusted $650,780 lodestar – because the court’s “review of the billing records” indicated that “there has been unreasonable padding” because “[s]ome of the work appeared to have been duplicative” and because plaintiff’s attorneys unnecessarily prolonged trial with unnecessary prefatory statements during witness questioning. That resulted in the adjusted lodestar fee award of $455,546. The court declined to further reduce the award based on the County’s other arguments.

Also in August 2023, plaintiff filed a memorandum of costs seeking $132,445.32. The County moved to tax those costs, challenging several items including $4,300 associated with one of plaintiff’s expert witnesses, Donald Lassig (Lassig). Following a hearing, the trial court denied much of the County’s motion, but did tax $4,300 in plaintiff’s costs associated with Lassig.

Plaintiff timely appealed the attorney fees and costs orders. The Court of Appeal affirmed the reduced attorney fee award for the plaintiff in the published portion of the case in Cash v. County of Los Angeles CA2/5 – B336980 – (May 2025),and in the unpublished portion of this opinion also affirmed the trial court’s denial of a motion to tax the plaintiff’s costs.

“Until recently, appellate courts in California uniformly “review[ed] attorney fee awards on an abuse of discretion standard” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 488 (Laffitte)), and would infer findings and defer to a trial court’s “general observation that an attorney overlitigated a case” or otherwise overcharged for fees (Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, 744; California Common Cause v. Duffy (1987) 200 Cal.App.3d 730, 754-755 (Duffy)).”

“Recently, however, a handful of California courts have employed “heightened scrutiny” – imported from federal cases interpreting a federal civil rights statute (namely, 42 U.S.C. § 1988) – and on that basis have demanded that a trial court articulate “case-specific reasons for [any] percentage reduction,” including a “clear[]” “expla[nation of] its reasons for choosing the particular negative multiplier [or percentage] that it chose.” (Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 37, 41 (Warren); Snoeck v. ExakTime Innovations, Inc. (2023) 96 Cal.App.5th 908, 921 (Snoeck); see Kerkeles v. City of San Jose (2015) 243 Cal.App.4th 88, 101-104 (Kerkeles)).”

“Other courts have declined to employ this importation of federal law (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 37 & fn. 6 (Morris)), and we join them in doing so.“

“Importing the federal standard exceeds the federal courts’ rationale for employing heightened scrutiny of specific fee awards and is inconsistent with our State’s longstanding policy that “[t]he ‘experienced trial judge is the best judge of the value of professional services rendered in [their] court.’” (Serrano v. Priest (1977) 20 Cal.3d 25, 49 (Serrano).)”