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Tag: 2016 News

Did Pandora’s Box Just Open For Secondary Injuries to Families?

Plaintiffs in these actions for personal injury and wrongful death allege that take-home exposure to asbestos was a contributing cause to the deaths of Lynne Haver and Johnny Kesner, and that the employers of Lynne’s former husband and Johnny’s uncle had a duty to prevent this exposure.

In the first case, Johnny Blaine Kesner, Jr., was diagnosed with perotineal mesothelioma in February 2011. He filed suit against a number of defendants he believed were responsible for exposing him to asbestos and causing his mesothelioma.

Johnny’s uncle, George Kesner, worked at the Abex plant in Winchester, Virginia, for much of George’s life, where George was exposed to asbestos fibers released in the manufacture of brake shoes. According to George, Johnny spent an average of three nights per week at his uncle’s home from 1973 to 1979. When Johnny was at his uncle’s home, he would sometimes sleep near George or roughhouse with George while George was wearing his work clothes.

Johnny alleged that his exposure to asbestos dust from the Abex plant, carried home on his uncle’s clothes, contributed to his contracting mesothelioma. Johnny died in December 2014, after the Court of Appeal issued its judgment in this matter. Cecelia Kesner is his successor in interest.

In the companion case, Lynne Haver was diagnosed with mesothelioma in March 2008 and died in April 2009. Her children, Joshua Haver, Christopher Haver, Kyle Haver, and Jennifer Morris (the Havers), filed a wrongful death and survival action alleging negligence, premises owner and contractor liability, and loss of consortium. They allege that Lynne’s exposure to asbestos by way of her former husband, Mike Haver, caused her cancer and death.

Mike was employed by the Atchison, Topeka, and Santa Fe Railway, a predecessor of BNSF Railway Company from July 1972 through 1974. In his position as fireman and hostler for BNSF, Mike was exposed to asbestos from pipe insulation and other products. The Havers allege that Mike carried home these asbestos fibers on his body and clothing, and that Lynne was exposed through contact with him and his clothing, tools, and vehicle after she began living with him in 1973.

Neither the Havers’ nor Kesner’s suit reached a jury as a result of the holding in Campbell v. Ford Motor Co. (2012) 206 Cal.App.4th 15, 34 (Campbell), which held that “a property owner has no duty to protect family members of workers on its premises from secondary exposure to asbestos used during the course of the property owner’s business.” The California Supreme Court granted review in both cases and consolidated them for argument and decision. The dismissal of their cases was reversed in Kesner v Superior Court.

In reversing the California Supreme Court held that the duty of employers and premises owners to exercise ordinary care in their use of asbestos includes preventing exposure to asbestos carried by the bodies and clothing of on-site workers.

Where it is reasonably foreseeable that workers, their clothing, or personal effects will act as vectors carrying asbestos from the premises to household members, employers have a duty to take reasonable care to prevent this means of transmission.

This duty also applies to premises owners who use asbestos on their property, subject to any exceptions and affirmative defenses generally applicable to premises owners, such as the rules of contractor liability.

Importantly, the Supreme Court held that this duty extends only to members of a worker’s household. Because the duty is premised on the foreseeability of both he regularity and intensity of contact that occurs in a worker’s home, it does not extend beyond this circumscribed category of potential plaintiffs.

The obvious question that arises out of this decision is what other types of toxic claims will follow? Or will this case be strictly limited to asbestos exposure?  If not limited only to asbestos, the potential for this case to open a Pandora’s box of secondary claims by immediate family members of workers injured by toxic materials in the workplace will no doubt follow. These secondary claims will not be limited to worker’s compensation by the exclusive remedy rule, and it is unclear what insurance, if any, will be responsible for indemnification.  

Exclusive Remedy Not Applicable to “Training” Robbery

This case involves the applicability of the workers’ compensation exclusivity rule to an unusual set of facts.

Plaintiff Kathy Lee was employed as a cashier of defendant West Kern Water District, at the district’s office, working behind a partition where customers came to pay their water bills, often in cash.

She sued the district and four coemployees for assault and intentional infliction of emotional distress after the coemployees staged a mock robbery with Lee as the victim. The district provided its employees with some training on how to respond to a robbery. The complaint alleged that four supervisors formed a plan to test how the district’s female employees would respond if they believed they were really being robbed.

In the mock robbery, one of the district’s managers entered the district’s office in a mask and confronted Lee at the cashier’s window with a note demanding money and saying he had a gun. Lee, who had not been informed of the planned mock robbery, handed over the money and subsequently was treated for psychiatric injury.

The complaint alleged that after the robbery, Lee was crying, shaking, and nauseous and finally had to go home. She later suffered from fears, depression, nightmares, headaches, loss of appetite, and ongoing nausea. She sought psychological treatment and had to use all her accrued sick leave and vacation time during an extended absence from work.

Lee claimed that, even if the facts satisfied the Labor Code section 3600 conditions for an exclusive workers’ compensation remedy, she could still recover damages in this lawsuit because an exception applied, the assault exception of Labor Code section 3602, subdivision (b)(1).

A jury instruction was allowed pertaining to the applicability of the exclusive workers’ compensation remedy was requested by Lee and objected to by defendants. It said “employer conduct is considered outside the scope of the workers’ compensation scheme when the employer steps outside of its proper role or engages in conduct unrelated to the employment.”

The jury awarded her $360,000, however the trail court granted the motion for a new trial. The trial court reasoned that, because the complaint conceded the workers’ compensation exclusivity rule applied unless the assault exception was proven, the jury should not have been instructed with CACI No. 2800, which said the defense had to prove the elements of the exclusivity rule. Instead, the jury should have been told the exclusivity rule applied unless Lee established the assault exception.

The order granting a new trial was reversed in the published case of Lee v Western Kern Water District.

Labor Code section 3602, subdivision (a), repeats the rule that workers’ compensation benefits are the exclusive remedy for industrial injury. Subdivision (b) of that section lists three exceptions to the exclusivity rule. The one pertinent here is: “Where the employee’s injury or death is proximately caused by a willful physical assault by the employer.” (Lab. Code, § 3602, subd. (b)(1).) Subdivision (c) makes explicit the converse of the exclusivity rule, i.e., that ordinary civil remedies apply to injuries falling outside the workers’ compensation system: “In all cases where the conditions of compensation set forth in Section 3600 do not concur, the liability of the employer shall be the same as if this division had not been enacted.” (Lab. Code, § 3602, subd. (c).)

Labor Code section 3601 extends the exclusivity rule to bar tort actions against coemployees who cause injury while acting in the scope of employment.

Hip Maker Hit With $1 Billion Jury Verdict

A federal jury in Dallas last Thursday ordered Johnson & Johnson and its DePuy Orthopaedics unit to pay more than $1 billion to six California plaintiffs who said they were injured by Pinnacle hip implants.

The jurors found that the metal-on-metal Pinnacle hip implants were defectively designed and that the companies failed to warn consumers about the risks.

J&J, which faces more than 8,000 lawsuits over the hip implants, said in a statement it would immediately appeal the verdict and was committed to defending itself and DePuy from further litigation over the Pinnacle devices.

The six plaintiffs awarded more than $1 billion are California residents who were implanted with the hip devices and experienced tissue death, bone erosion and other injuries they attributed to design flaws. Plaintiffs claimed the companies promoted the devices as lasting longer than devices that include ceramic or plastic materials.

According to plaintiff’s lawyer Mark Lanier, the total verdict of $1.041 billion included $32 million in compensatory damages. The rest were punitive damages.

Verdicts of such size are often scaled back by courts. In July, the judge presiding over this case, U.S. District Judge Edward Kinkeade, reduced a $500 million verdict in an earlier Pinnacle implant case to $151 million, citing a Texas state law that limits punitive damages awards.

J&J and DePuy have been hit with nearly 8,400 lawsuits over the devices, which have been consolidated in Texas federal court. Test cases have been selected for trial, and their outcomes will help gauge the value of the remaining claims.

The verdict on Thursday came in the third test case, with the second producing the earlier $500 million verdict. J&J and DePuy were cleared of liability in the first test case in 2014

The company rejected a $1.8 million settlement offer from the plaintiffs before trial, Lanier said.

The plaintiffs in the second test case have appealed Kinkeade’s decision to cut the award. Johnson & Johnson and DePuy have also appealed the jury verdict in the case.

John Beisner, J&J’s attorney, said the company will ask the appeals court to postpone any additional trials over the implant defects.

DePuy ceased selling the metal-on-metal Pinnacle devices in 2013 after the U.S. Food and Drug Administration strengthened its artificial hip regulations.

J&J and DePuy also paid $2.5 billion that year to settle more than 7,000 lawsuits over its ASR metal-on-metal hip devices. The ASR devices were recalled in 2010 due to high failure rates.

Fresno Sleep Center Loses Whistleblower Retaliation Suit

A Fresno County jury has awarded more than $600,000 to a respiratory therapist who said she was wrongfully terminated at a sleep medicine center because she blew the whistle on Medicare fraud.

Tansi A. Casillas, 51, of Fresno, alleged that her employer, Central California Faculty Medical Group, eliminated her position at University North Medical Specialty Center in retaliation for the fraud complaints she made and for refusing to perform medical services outside the scope of her respiratory care license. Central California Faculty Medical Group is a multispecialty practice affiliated with UCSF-Fresno. It operates several medical offices, including University North Medical Specialty Center for pulmonary and sleep medicine.

In her lawsuit, Casillas said doctors left the responsibility to her to have face-to-face evaluations with patients on continuous positive airway pressure (CPAP), a treatment that keeps the airways open for people who have sleep apnea and other breathing problems. The patient and Medicare were later billed for a doctor’s visit, even though the patient was not seen by a doctor, the lawsuit said.

According to the lawsuit, the faculty medical group’s compliance department investigated Casillas’ claims and found the medical group had “erroneously” overbilled Medicare but that no fraud had occurred. The overbilling resulted in the medical group’s reimbursing Medicare for the overcharges, the lawsuit said.

The jury found Casillas had been retaliated against for being a whistleblower and awarded her $131,200 in economic and emotional damages. And later they awarded her $500,000 in punitive damages.

Karen Rushing, human resources director for Central California Faculty Medical Group, said in an email Wednesday that the medical practice strongly denied wrongdoing.

The faculty medical group, represented by San Francisco lawyer Steven R. Blackburn, argued in a motion to dismiss the case, saying that Casillas was terminated for economic reasons that were aggravated by “her bad behavior in interacting with her coworkers.”

According to Casillas’ lawsuit, the medical group falsely accused her of violating the company’s conflict of interest policy as part of its retaliation for being a whistleblower.

Casillas had worked as a respiratory therapist for the faculty medical group since November 2008 and had received good performance evaluations before her whistleblowing, the lawsuit said. But she worked under a “microscope” after she refused to perform medical services outside the scope of her respiratory care license and refused to participate in unlawful billing to Medicare, the lawsuit said.

She first voiced concerns about Medicare fraud to Dr. Lynn Keenan, medical director for sleep medicine at North Medical Specialty, on April 8, 2013, the lawsuit said. Concerned that the issue had not been taken seriously, she called the faculty medical group’s compliance officer and the National Board of Respiratory Care on April 9, 2013.

The following day, retaliation began, the lawsuit said.

The jury found that Casillas’ disclosure about Medicare fraud and her refusal to participate in medical services outside the scope of her respiratory care license were contributing factors in the faculty medical group’s decision to discharge her. And the jury found the medical practice would not have discharged her for legitimate, independent reasons.

WCAB Proposes New Lien Claim Rules

The Workers’ Compensation Appeals Board has issued a notice of public hearing regarding a proposed addition and amendments to its Rules of Practice and Procedure.

Lien claims must be filed electronically on a form approved by the WCAB. (Lab. Code, § 4903.05(a); Cal. Code Regs., tit. 8, §10770(b)(1)(A).)

Senate Bill (SB) 1160 (Stats. 2016, ch. 868) amended Labor Code section 4903.05 to require section 4903(b) lien claimants to file an original bill and a declaration that includes information regarding the type of services provided by the lien claimant. To effectuate these legislative changes, the WCAB proposes amending rule 10770 and adopting rule 10770.7.

A lien claimant’s failure to timely file this declaration shall result in the dismissal of the lien with prejudice by operation of law per Labor Code section 4903.05(c)(3). This rulemaking will mandate use of an e-filed declaration form in order to ensure uniform procedures for lien claimants who first file their liens after January 1, 2017 and current lien claimants who are required to file a declaration by July 1, 2017.

The public hearing is scheduled on Wednesday, January 4 at 10 a.m. in the Milton Marks Conference Center, Santa Barbara Room of the Hiram Johnson State Office Building at 455 Golden Gate Avenue in San Francisco. Members of the public may also submit written comment on the proposed rules amendments until 5 p.m. that day.

The notice, draft regulations text and initial statement of reasons are posted online.

Comments may be submitted by e-mail to or they may be mailed to: Workers’ Compensation Appeals Board Attention: Annette Gabrielli, Regulations Coordinator P.O. Box 429459 San Francisco CA 94142-9459.

Although equal weight will be accorded to oral and written comments, the WCAB prefers written comments to oral testimony and prefers written comments submitted by e-mail. If written comments are timely submitted, it is not necessary to present oral testimony at the public hearing.

Memorial Services Set for Applicant Attorney David Ashton

It is with great sadness that we announce the passing of applicant’s attorney David Wallace Ashton of Milburn and Ashton. He was born March 3, 1956 and was 60 years of age when he died from cancer on December 1.

His offices has provided legal services to the residents of the Antelope Valley and surrounding communities for more than 30 years. He was very well respected in the workers’ compensation community.

Mr. Ashton graduated from California Polytechnic State University San Luis Obispo with Honors in 1978. He obtained his Master’s Degree in Education from Azusa Pacific University, and his Juris Doctor from University of Laverne in 1992.

He was admitted to the State Bar of California on December 14, 1992, and to the United States Federal District Court on January 11, 1993.

Mr. Ashton has been practicing workers’ compensation law for over 22 years, primarily before the Van Nuys, Bakersfield and San Bernardino Workers’ Compensation Appeals Boards.

He is an active member of the California Applicants Attorney Association (CAAA), the Antelope Valley Bar Association, and the State Bar of California. Mr. Ashton had extensive trial and litigation experience before both the Workers’ Compensation Appeals Board and the Central District California Court of Appeals.

One of his co-workers – Jennifer Loza – said that “Dave was the best boss, and also one of the greatest human beings, in the whole world. My heart is broken. My deepest condolences to Sharon and the kids, who were always the most important things to him. Dave, you fought like a honey badger.”

Services will be held at Joshua Memorial Chapel 808 East Lancaster Blvd. Lancaster, CA 93535 Wednesday December 7th, 2016 at 11:00 am, Graveside Service to follow at 12:00 pm. In lieu of flowers please send donations to City of Hope and PSP Society.

DWC Appoints James R. Libien to EAC

The Division of Workers’ Compensation (DWC) Acting Administrative Director George Parisotto has appointed James R. Libien Esq., to serve as a member of the Workers’ Compensation Ethics Advisory Committee. The appointment is effective today.

Mr. Libien is counsel with Renn Sloan Holtzman Sakai, specializing in workers’ compensation.

He has represented public and private employers before the Workers’ Compensation Appeals Board (WCAB). He has also served as a pro tem judge and as a mediator. He will fill the position to be held by an attorney who formerly practiced before the WCAB and who usually represented defendants, which was previously held by the late Robert Ruby.

The ethics advisory committee, established in 1995 by Title 8, California Code of Regulations, section 9722, reviews all ethics complaints from the public against workers’ compensation administrative law judges. The committee reviews all complaints without learning the names of complainants or judges, and then makes recommendations to the administrative director and the DWC court administrator. The committee meets quarterly and members serve without compensation.

As civil servants, WCALJs are not subject to review by the California Commission on Judicial Performance, the agency responsible for investigating misconduct complaints directed at judges serving on the Supreme, Superior, and Appellate courts.

The regulation provides that the committee must include: three members of the public individually representing organized labor, insurers and self-insured employers; an attorney who formerly practiced before the WCAB and who usually represented insurers or employers; an attorney who formerly practiced before the WCAB and who usually represented applicants; a presiding judge; a workers’ compensation administrative law judge (WCALJ) or retired WCALJ; and two members of the public outside the workers’ compensation community.

A judicial ethics complaint form and instructions can be found on the forms page of the DWC website. Anyone may file a complaint with the EAC. Complaints may be submitted anonymously, but all complaints must be presented in writing.

An EAC case is typically opened after the DWC receives a letter from an injured worker, an attorney, or a lien claimant (i.e., medical provider) who has been a party to a proceeding before a WCALJ employed by the DWC, and the complaint alleges ethical misconduct by that judge. The DWC then sends a letter to the complainant acknowledging that the complaint was received by the EAC.

Each complaint that alleges misconduct by a judge is formally reviewed by the EAC. To ensure objectivity by the reviewing members on the EAC, the committee adopted a policy requiring that the names of the complainant, the WCALJ, and witnesses as well as the specific DWC office where the alleged misconduct occurred be redacted from the copies of complaints reviewed at each meeting.

The committee prepares an annual report of its findings for the year. The latest report was published last March.

DWC Posts Adjustments to Inpatient Hospital OMFS

The Division of Workers’ Compensation (DWC) has posted an adjustment to the inpatient hospital section of the Official Medical Fee Schedule (OMFS) to conform to changes in the 2017 Medicare payment system as required by Labor Code section 5307.1. The effective date of the changes is January 1, 2017.

Under the regulatory definitions the term “Hospital” means any facility as defined in Section 1250 of the Health and Safety Code.The term “Inpatient” means a person who has been admitted to a hospital for the purpose of receiving inpatient services. A person is considered an inpatient when he or she is formally admitted as an inpatient with the expectation that he or she will remain at least overnight and occupy a bed, even if it later develops that such person can be discharged or is transferred to another facility and does not actually remain overnight.

The Medicare FY17 update to the inpatient prospective payment system was published on August 22, 2016 in the Federal Register (Vol. 81 FR 56762). Using this publication, the DWC calculates changes to Title 8, California Code of Regulations, sections 9789.20 – 9789.25 consistent with the Labor Code requirements.

L.C. 5307.1(g)(1)(A)(i) provides that the annual inflation adjustment for inpatient hospital facility fees for California workers’ compensation claims shall be determined solely by the estimated increase in the hospital market basket. Thus, in lieu of using the Medicare FY2017 rates to determine the updated OMFS amounts, the estimated increase in the hospital market basket was applied to the 2016 OMFS rates for dates of discharge effective, January 1, 2017.

Based on the Medicare Hospital Inpatient Prospective Payment System, all hospitals are paid the same standard rate for operating costs (based on the rate for hospitals located in large urban areas). The 2016 rate was $6,269.83. The estimated increase in the market basket is 2.7%. The 2017 standard rate under the OMFS will become $6,439.11 ($6,269.83 x 1.027).

Pursuant to Labor Code section 5307.1(g)(2), the Acting Administrative Director of the Division of Workers’ Compensation orders that to the extent references to the Federal Register or Code of Federal Regulations are made in any sections starting from section 9789.20 through 9789.25 of Title 8 of the California Code of Regulations, said section is hereby amended to incorporate by reference the applicable Federal Register final rule (including correction notices and revisions) and Federal Regulations in effect as of the date the Order becomes effective, to be applied to discharges occurring on or after January 1, 2017.

Further information and adjustments to the inpatient hospital section of the Official Medical Fee Schedule can be found on the DWC website’s OMFS page.

QME/AME John Warbritton M.D. Under Federal Indictment

John D. Warbritton III, M.D has been an orthopedic surgeon in Oakland since 1986. He is a graduate of Harvard Medical School and a Diplomate of American Board of Orthopaedic Surgery and a fellow of the American Board of Orthopaedic Surgery and the American Academy of Orthopaedic Surgeons.

He became a Qualified Medical Examiner in 1992, its’ inaugural year. Until his federal suspension order, he maintained an active practice treating injured workers and had authored hundreds of medical-legal evaluations each year. He was Chairman of the Department of Orthopedic Surgery at Alta Bates Summit Medical Center in Oakland from January 2003 to January 2009.

In 2007, Dr. Warbritton started Warbritton & Associates Impairment Rating Specialists, which provides medical legal evaluations from specialists in a growing number of fields.

His medical practice has now, at least temporarily, come to a halt when Dr. Warbritton represented by counsel appeared for an arraignment on a federal criminal Indictment on October 18, 2016 in case CR 16-00423 CRB BZ pending in the United States District Court, Northern District of California. As the defendant in that case he “agreed to not engage in the practice of medicine, which includes seeing patients and reviewing medical records”. The parties stipulated, and the Court entered the Order that “John David Warbritton, III, M.D., is prohibited from practicing medicine in any manner, during the pendency of the above-captioned criminal proceeding. This Order shall remain in effect until the conclusion of this criminal proceeding or further order of the Court.”

And on November 21, Kamala Harris acting in her capacity as California Attorney General filed an Accusation against Dr. Warbritton seeking to revoke or suspend his license to practice medicine.

According to the allegations of her Accusation, Dr. Warbritton is subject to disciplinary action under Business and Professions Code sections 2234 (a) and (f) for unprofessional conduct and Section 726 in that he in engaged in sexual misconduct while evaluating two patients.

The allegations claim specific acts of sexual misconduct while evaluating two different women who were referred for medical examinations by industrial insurance companies starting in 2008. The alleged conduct includes, in detail, oral comments as well as physical gestures that were inappropriate if not illegal.

However the allegations of the federal criminal indictment add another more sinister layer to allegations Dr. Warbritton will be defending. Federal authorities allege that “On or about March 27, 2016, in the Northern District of California, the defendant, JOHN DAVID WARBRITTON, III, knowingly transported any child pornography, as defined in Title 18, United States Code, Section 2256(8), using any means and facility of interstate and foreign commerce and in or affecting interstate and foreign commerce by any means, including by computer, in violation of 18 U.S.C. § 2252A(a)(l) 24 and (b).”

AFLAC Employee Convicted for $4 Million Disability Fraud

A former sales representative for AFLAC has been found guilty of federal fraud charges stemming from a scheme that bilked the insurance company out of $4 million with fake disability claims.

Patricia Diane Smith Sledge, 60, of Redlands, was convicted in the scheme involving fictitious employers and “employees” who falsely claimed to have suffered injuries that prevented them from working.

At the conclusion of a two-week trial, the jury convicted Sledge of six counts of mail fraud. The jury also found that Sledge committed two counts of witness tampering while on bond in this case.

United States District Judge James V. Selna, who presided over the trial, ordered Sledge to return to court for a sentencing hearing on March 20, 2017, at which time the defendant will face a statutory maximum sentence of 160 years in federal prison.

The evidence presented at trial showed that Sledge, who was residing in Irvine while working for the company formally known as American Family Life Assurance Company, sold disability insurance policies to bogus companies and people who supposedly worked for those companies. Sledge then orchestrated the filing of fraudulent disability claims and directed the purported employees to doctors that would sign off on the fake injury claims.

As a result of the false claims, AFLAC suffered losses of approximately $4 million.

Sledge made money both from the commissions related to the sale of the fraudulent insurance policies and from kickbacks she received from the supposedly injured “employees.”

“Using knowledge she gained as a company insider, this defendant was able to game the system, causing her employer to suffer millions of dollars in losses,” said United States Attorney Eileen M. Decker. “While her scheme went unnoticed for a period of time, her employer was able to uncover the conduct and referred the matter to federal authorities. This cooperation from the victim and a thorough investigation by law enforcement has resulted in this successful prosecution.”

Sledge was also found guilty of witness tampering for encouraging potential witnesses to lie to federal investigators and discouraging them from cooperating in the investigation. Both counts related to conduct after Sledge became aware of the federal investigation, and one count stemmed from conduct after she was indicted in this case and freed on bond in 2012.

“Defendant Sledge illegally misused the authority granted to her as a licensed insurance agent in California for her own personal gain, at the expense of her trusted employer,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “In addition, the defendant’s brazen attempt of witness tampering to tilt the justice system in her favor further demonstrates her lack of respect for the rule of law. The lengthy prison sentence the defendant faces should serve as a warning to anyone contemplating insurance fraud.”

Two others have been prosecuted for acting as fake employers and fake employees in this scheme.