In 2017, A-Brite Blind and Drapery Cleaning initiated an action with the Department’s administrative hearing bureau against State Compensation Insurance Fund regarding State Fund’s policy premiums.

Following an evidentiary hearing, an administrative law judge issued a proposed decision to the Commissioner, who declined to adopt it.

Instead, the Commissioner issued his own decision and order on November 16, 2018 , finding that State Fund violated the Insurance Code by, among other things, including an unlawful rating tier modifier during the 2015 and 2016 policy periods. The Commissioner further designated the A-Brite order as precedential under Government Code section 11425.60, subdivision (b).

State Fund filed a motion for reconsideration, which was deemed denied when the Commissioner failed to respond.

On January 28, 2019, more than a month before the deadline for State Fund to challenge the A-Brite order in the trial court by petition for writ of mandate (Cal. Code Regs., tit. 10, § 2509.76, subd. (a)), State Fund’s general counsel sent a letter to the Department, asking the Commissioner to “rescind the designation of the [A-Brite] Decision as precedential,” as the decision contained “clear errors of facts and law.”

In response to the letter, the Department’s attorney, Bryant Henley, contacted State Fund to discuss settlement. State Fund and the Department ultimately signed a settlement agreement which said “State Fund agrees, further, not to file a Writ Petition challenging, in whole or in part, the A-Brite Order. The Department agrees to remove the precedential designation from the A-Brite Order, rendering the decision non-precedential.”

On March 15, 2019, State Fund’s deadline for filing a writ petition challenging the A-Brite order expired.

Ten days later, after noting “several legal and factual issues in common” between the A-Brite matter and another administrative action brought against State Fund, an ALJ for the Department took official notice of the A-Brite order, the A-Brite settlement agreement, and various other A-Brite documents in In the Matter of the Appeal of Sessions Payroll Management, Inc. (File: AHB-WCA-18-47, July 18, 2019) (the Sessions matter).

The ALJ also ordered the parties to brief whether the “doctrines of exhaustion of judicial remedies and collateral estoppel preclude relitigation of factual and/or legal issues decided by the Commissioner in A-Brite.” After reviewing the briefs, the ALJ disagreed with State Fund, instead adopting Sessions’s position that both doctrines applied and issuing an order finding that State Fund was precluded from relitigating the factual and legal issues decided in A-Brite.

On June 10, 2019, State Fund filed a petition for a peremptory writ of administrative mandate challenging the merits of the 2018 A-Brite order. Aware that the petition was filed after the limitations period had run, State Fund alleged that equitable estoppel and equitable tolling applied to render the petition timely. Among other things SCIF alleged “that the Commissioner intentionally misled State Fund by representing that the settlement agreement would preclude any use of the A-Brite order in subsequent proceedings.”

On November 19, 2020, in response to State Fund’s effort to reopen the A-Brite matter by filing this writ, the ALJ in Sessions issued an order vacating its ruling finding the A-Brite order preclusive in that case, as the A-Brite order was no longer final for purposes of collateral estoppel and judicial exhaustion.

The same day, the Department filed a motion for summary judgment in the trial court, arguing that State Fund’s petition was time-barred as a matter of law. The court granted the motion, finding that neither equitable estoppel nor equitable tolling applied to extend the period of limitations.

In doing so, it found that the settlement agreement only required the Department to “de-designate” the A-Brite order as precedent under the applicable Government Code section, and it did not preclude the Department from binding State Fund to the A-Brite order through other means, such as nonmutual offensive collateral estoppel.

The Court of Appeal affirmed the trial court dismissal in the unpublished decision of State Compensation Ins. Fund v. Dept. of Insurance -C093897 (September 2023).

A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful. (Civ. Code, § 1636.).

The “Department’s interpretation suggests that State Fund agreed not to pursue the writ, while also agreeing to be bound by the A-Brite order with respect to every company raising the same issues in all future administrative actions against State Fund.This reading of the agreement would render the contract largely illusory, granting no benefit to State Fund.”

“Here, the plain language of the contract controls, and does not support the narrow reading advanced by the Department. … State Fund agreed to be bound by the order with respect to A-Brite. It did not agree to be bound by the A-Brite order with respect to any other party. ” … “The contractual language supports State Fund’s interpretation.”

However the Court went on to say “While we agree with State Fund’s interpretation of the settlement agreement, we conclude that State Fund fails to raise a question of material fact as to whether equitable estoppel or equitable tolling applies in this case.”

A defendant may be estopped from asserting the statute of limitations as a defense if four elements are present:: (1) the party to be estopped must be apprised of the facts; (2) he [or she] must intend that his [or her] conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he [or she] must rely upon the conduct to his [or her] injury. (Honeywell v. Workers’ Comp. Appeals Bd. (2005) 35 Cal.4th 24, 37, quoting City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 489.).

“Here, the doctrine is inapplicable to the facts before us. There is no misrepresentation, or nondisclosure of facts, which caused State Fund to refrain from filing the writ.” The dispute was over interpretation of the agreement.

“However, State Fund is not necessarily without further remedy. It still may challenge the ALJ’s application of collateral estoppel in Sessions if that order is reinstated.”

Anonymously named Jane Doe sued her former employer Na Hoku, Inc. and former manager Ysmith Montoya asserting multiple claims arising from Montoya’s alleged sexual harassment and assault of Doe.

The employer successfully moved to compel arbitration, and the court ordered the case to binding arbitration. September 1, 2022 was the “due date” for real parties to pay certain arbitration fees and costs to the arbitrator.

On Friday, September 30, Na Hoku mailed a check for $23,250 to the Texas address provided. On Monday, October 3, counsel for real parties informed AAA that payment had been mailed. On October 5, AAA received real parties’ payment and applied it to the case.

Doe moved to vacate the trial court’s order compelling arbitration on the grounds that real parties had failed to pay their arbitration fees and costs within 30 days of the due date as required by statute. She argued their late payment was a material breach of the arbitration agreement and waived their right to compel arbitration.

The trial court denied the motion. It noted that that “the provider’s demand was for payment remitted by October 3,” the court ruled that real parties “indisputably complied” with the date “having remitted (i.e., sent) the sum in by that date.” The court recognized the possible “ambiguity as to whether a ‘due’ date meant the day the sum had to be remitted or received by the provider” but concluded AAA’s second communication “clarified this: The date was for the remitting of the sum.” In the trial court’s view, because real parties’ remittance of payment by October 3 “satisfied the due date imposed by the provider.”

The Court of Appeal reversed the trial court order in the published case of Doe v Superior Court (Na Hoku Inc) – A167105 (September 2023).

Doe argues the trial court misinterpreted Code of Civil Procedure section 1281.98 in allowing real parties more than 30 days to pay arbitration fees and costs.

Here, the statutory language is not clear. While some terms in the statutory scheme are defined, there is no definition for the term “paid” in the clause “if the fees or costs required to continue the arbitration proceeding are not paid within 30 days after the due date.” (§ 1281.98, subd. (a)(1).)

Webster provides a number of definitions for “pay” (including “to make due return to for services rendered or property delivered,” “to give in return for goods or service,” and “to make a disposal or transfer of (money)”) and “paid” as “marked by the receipt of pay,” or “being or having been paid or paid for.”

Black’s Law Dictionary has no separate entry for “paid” but offers multiple definitions of “pay”: “1. To give money for a good or service that one buys . . . . 2. To transfer money that one owes to a person, company, etc. . . . 3. To give (someone) money for the job that he or she does . . .”

After reviewing the statutory language and dictionary definitions it said “while we acknowledge that most service providers would not consider themselves “paid” until they received payment, the term “paid” is reasonably subject to more than one interpretation.“

Thus the Court of Appeal reviewed the legislative purpose of the statute and concluded that “Here, the construction offered by petitioner, i.e., payment made and received within 30 days of the due date, best effectuates this legislative purpose.“

“This construction provides a clear, bright-line rule for determining compliance with the 30-day statutory grace period as the arbitrator can readily and definitively determine whether funds have been received to satisfy any outstanding fees or costs owed for a pending arbitration. If such fees are not received by the conclusion of the statutory grace period, an employee may immediately elect to pursue options for relief.”

As a backstory to the new decision just published by the 9th Circuit Court of Appeals, a civil case, was filed April 11, 2022 in San Francisco Superior Court by the San Francisco and Los Angeles District Attorneys, alleging that the Potter Handy LLP San Francisco lawfirm and 15 of its lawyers — including name partners Mark Potter and Russell Handy — of violating California’s Unfair Competition Law by bringing fraudulent and deceitful litigation under the Americans with Disabilities Act against small businesses. The district attorneys asked the court to enjoin the law firm from further violations and make it repay thousands of small businesses that settled claims over the last four years.

In dismissing the district attorneys’ case in August 2022, San Francisco Superior Court Judge Curtis Karnow found that the conduct of Potter Handy attorneys was covered by California’s “litigation privilege” that attaches to court filings and communications related thereto. The judge found that the privilege applied “irrespective of the communication’s maliciousness or untruthfulness.”

On October 20,2022 the San Francisco District Attorney announced that they would appeal the dismissal of their case against Potter Handy LLP.  The outcome of that appeal is not yet known.

Meanwhile, on October 2, 2020, Orlando Garcia – who is currently represented in this case by Potter Handy LLP – filed a complaint in the California state court challenging Gateway Hotel’s “reservation policies and practices,” specifically “the lack of information provided on [Gateway’s] website that would permit [Garcia] to determine if there are rooms” that would accommodate his disability. Garcia contended that Gateway’s failure to provide this information violated the ADA and California law.

Gateway removed the case to federal court, and Garcia subsequently amended his complaint, dropping his claim based on California law. Gateway then moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), and the district court granted the motion after concluding that the information on Gateway’s website complied with the ADA’s requirements.

Gateway then sought an award of attorney’s fees, which the court denied because it could not “conclude on the record before it that [Garcia]’s case was frivolous or unreasonable” and because there was no “clear indication that [Garcia]’s lawsuit was vexatious.”

Gateway then filed an application for costs, which the court awarded. After filing two motions to retax costs that the court denied on procedural grounds, Garcia filed a third motion to retax costs, arguing that costs may be awarded to defendants under the ADA only if the action was frivolous, unreasonable, or without foundation. The court denied this motion after concluding that Brown v. Lucky Stores, Inc., 246 F.3d 1182 (9th Cir. 2001) – the legal authority cited in support of Garcia’s position – was irreconcilable with the Supreme Court’s intervening decision in Marx v. General Revenue Corp., 458 U.S. 371 (2013).

The district court followed “the Supreme Court’s intervening decision in Marx rather than the Ninth Circuit’s earlier precedent” in Brown, and determined that Rule 54(d)(1) governed the award of costs in ADA actions. And because Rule 54(d)(1) provides that costs may be awarded to a prevailing party at the district court’s discretion, the court concluded that Gateway properly received its costs in the action and denied Garcia’s motion to retax costs.

These orders were followed by a timely appeal. The 9th Circuit Court of Appeals reviewed the case, and affirmed the award of costs to the Hotel in the published case of Garcia v Gateway Hotel – 21-55926 (September 2023).

This case required the 9th Circuit Court of Appeals to clarify the circumstances under which a defendant may be awarded its costs in an action brought under the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12101 et seq. Gateway contends that the standard for awarding costs to ADA defendants is governed by Federal Rule of Civil Procedure 54(d)(1), which allows courts the discretion to award costs to prevailing parties “[u]nless a federal statute . . . provides otherwise.”

Appellant Orlando Garcia contends that the ADA’s fee- and cost-shifting statute “provides otherwise” because it permits ADA defendants to receive their costs only where there is a showing that the action was frivolous, unreasonable, or groundless. He relied on Brown v. Lucky Stores, Inc., supra. Therefore, he contends that the district court should have granted his motion to retax costs, which would have, in effect, denied Gateway’s application for costs.

The majority opinion agreed with the district court and concluded that its decision in Brown cannot be reconciled with the Supreme Court’s decision in Marx, and therefore it has been effectively overruled. Accordingly, it held that Rule 54(d)(1) governs the award of costs to a prevailing ADA defendant, and such costs may be awarded in the district court’s discretion.

Circuit Judge Hurwitz wrote the dissenting opinion. He agreed with the majority that after Marx Rule 54(d)(1) controls the award of costs to a prevailing defendant in an ADA action. He also agreed with the majority that prior caselaw holding that the ADA “provides otherwise” than Rule 54(d)(1) cannot be reconciled with Marx. But, he parted company with his colleagues on whether our three-judge panel is free to reach these conclusions.

“The proper course – even when the eventual outcome is, as today, seemingly preordained – is to require an en banc court to inter our previous decisions unless an intervening Supreme Court abrogates them.”

Late Thursday night the California Legislature finished its 2023 session, but not before frantic lobbying by advocacy groups, some controversy and last-minute deal-making. The most tumultuous legislative deal made earlier this month is aimed at the fast food industry in California.

The backstory begins with the passage of the Fast Food Standards and Accountability Recovery Act in 2022 – Assembly Bill 257 – giving the state’s 550,000 fast food workers a seat at the table and bargaining power.

This 2022 law would have established the Fast Food Council within the Department of Industrial Relations until January 1, 2029. It would have been composed of 10 members who would to establish sectorwide minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers.

The law was opposed by franchise owners, fast food companies and the California Restaurant Association. Joe Erlinger, the President of McDonald’s posted an open letter which opposed the law, and he claimed “Economists say it could drive up the cost of eating at a quick service restaurant in California by 20% at a time when Americans already face soaring costs in supermarkets and at gas pumps.”

In response to this Act, California small business owners, restaurateurs, franchisees, employees, consumers, and community-based organizations announced the formation of a coalition to refer the FAST Act back to voters and suspend its implementation until they have a say in November 2024. The coalition’s effort is co-chaired jointly by the National Restaurant Association, the U.S. Chamber of Commerce and the International Franchise Association.

On December 5, 2022, the Save Local Restaurants coalition announced it submitted to county elections officials over one million signatures from Californians in order to prevent AB 257 from taking effect until voters have their say on the November 2024 ballot.

Next, Katrina S. Hagen Director, California Department of Industrial Relations, sent the coalition a letter on December 27, 2022 stating that it intended to implement AB 257 – the FAST Act – on January 1, 2023.

The Local Restaurants coalition therefore filed a lawsuit on December 29, 2022, claiming that the state’s Constitution dictates that, as part of the referendum process, laws cannot go into effect until voters have an opportunity to exercise their voice and vote on the proposed legislation. A request for a preliminary injunction was granted in that case in January 2023 by Sacramento County Superior Court Judge Shelleyanne W.L. Chang. The Department of Industrial Relations was prohibited from implementing AB 257 until it was either disqualified from the Ballot by the Secretary of State, or the Voters had their say at the scheduled election.

Moving into 2023, the Secretary of State determined that the the referendum petition filed against AB 257 contains more than the minimum number of required signatures. In response to the referendum, the SEIU backed another bill, AB 1228 which was introduced on February 16, 2023. The bill would impose joint-employer liability on franchised businesses – including the very restaurant chains that loudly decried AB 257

AB 1228 bill would have required that a fast food restaurant franchisor share with its fast food restaurant franchisee all civil legal responsibility and civil liability for the franchisee’s violations of prescribed laws and orders or their implementing rules or regulations. The bill would authorize enforcement of those provisions against a franchisor, including administratively or by civil action, to the same extent that they may be enforced against the franchisee. The bill would provide that a waiver of the bill’s provisions, or any agreement by a franchisee to indemnify its franchisor for liability, is contrary to public policy and is void and unenforceable.

In September 2023, deal was made between fast food companies, unions and lawmakers, detailed in an amendment to AB 1228. The agreement would give a $20 minimum wage to fast food workers starting next April. And fast food companies would not face potential liability for labor violations at their franchises, if the ballot referendum to undo the controversial Fast Food Standards and Accountability Recovery Act is withdrawn, saving both sides the time and money on the campaign.

The amendment also prohibits any city, county, or city and county from enacting or enforcing any ordinance or regulation applicable to fast food restaurant employees that sets the amount of wages or salaries for fast food restaurant employees, .

According to a summary by CalMatters, lawmakers sent the following bills which are of interest to California employers and the insurance industry, to Governor Gavin Newsom for his signature, or possible veto.

– – Health care employees: An agreement to eventually raise the minimum wage to $25 an hour for tens of thousands of health care workers. In exchange, under SB 525, hospitals and other medical employers get a 10-year moratorium on local measures to increase compensation. Workers at larger hospitals and dialysis clinics would be the first to see the increase, starting in 2026, followed by community clinics and other health facilities. Employees at smaller and rural hospitals will have to wait until 2033 to see the $25 bump.

– – Striking workers: A bill that is one of the California Labor Federation’s top priorities, to allow striking workers to collect unemployment benefits after two weeks on the picket line, is especially notable this summer, when labor disputes involving California screenwriters, hotel workers, restaurant employees and others are leaving  many without pay as they strike for better working conditions. But business groups oppose Senate Bill 799, arguing that the state’s unemployment program is already over strained.

Not every bill made it, however. For instance, AB 518, by Assemblymember Buffy Wicks, would have extended who can take paid family leave to “chosen family” who don’t have a legal or biological relationship. The measure was held in the Senate.

Sutter Health is a not-for-profit integrated health delivery system headquartered in Sacramento, California. It operates 24 acute care hospitals and over 200 clinics in Northern California. Sutter Hospital Association was founded in 1921 as a response to the 1918 flu pandemic. Named for nearby Sutter’s Fort, its first hospital opened in 1923.

The a Report by Becker’s Hospital Review said that California State Board of Pharmacy documented “major deficiencies” related to staff training and knowledge in 2019 at Sutter Coast Hospital’s compounding pharmacy, which was recently placed on a three-year probation. Sutter Coast Hospital is a community-based, not-for-profit hospital serving residents of Del Norte County, California, and Curry County, Oregon.

According to an Accusation made on November 6, 2021 by the Board of Pharmacy, Department of Consumer Affairs,during a routine inspection in January 2019, an investigator noted “major deficiencies” related to compounding training among staff, according to documents on the probation agreement.

The pharmacist in charge and her staff “had not conducted most of the training required prior to commencing compounding,” the investigator found. When asked to demonstrate knowledge of “aseptic hand washing, garbing, cleaning of a controlled environment and the ability to accurately document each documented drug compound,” inspectors found “major deficiencies” in employees’ knowledge of these regulations.

The investigator also found the only sink available was in a restroom, despite pharmacy law requiring a sink with running water is within the “parenteral solution compounding area or adjacent to it.”

During the inspection, the Board investigator observed that compounding staff failed to wear appropriate clothing. Specifically, compounding staff: failed to wear non-shedding gowns, and wore isolation gowns instead; failed to don personal protective equipment immediately outside the segregated compounding area; did not dry hands with a low-lint towel prior to donning a non-shedding gown; and wore visible jewelry.

The facility documented sterile compounding with a system called EPIC and did not ensure the records kept included all the required elements. Specifically, records for completed compounded drug products for vancomycin, ketamine, and Remicade did not contain all ingredients used to compound the products, did not contain the beyond use date of the final compounded products, and did not contain final volumes.

During the inspection, the Board investigator observed unsanitary conditions, including that the Pharmacy did not clean the hoods, all surfaces and floors with a germicidal detergent and sterile water. Respondent Pharmacy’s policies and procedures stated that cleaning must be conducted with a detergent, but the pharmacy only used isopropyl alcohol and water for cleaning.

In May 2023, Sutter Coast Hospital Pharmacy entered into a Stipulated Settlement and admitted all of the accusations made against it. A probation began July 23 for the Crescent City, Calif.-based hospital’s compounding facility. During the probation, the hospital will be subjected to unannounced visits from the pharmacy board and will be required to provide quarterly updates to the state, provide five hours of compounding education for pharmacy technicians and pay an undisclosed fine.

The pharmacy has since worked with the state pharmacy board and violations have been corrected, a spokesperson for Sacramento-based Sutter Health previously told Becker’s.

“We have partnered with the California Board of Pharmacy and have made significant investments at Sutter Coast’s compounding facility,” a spokesperson said. “These recent upgrades exceed all sterile compounding standards for hazardous drugs, which provide protections for employees and patients. Sutter Health remains committed to providing our patients excellent and quality care and supporting overall community health.”