Tag: 2018 News

The City of Los Angeles sued three port trucking companies Monday, alleging the firms exploit their drivers by misclassifying them as independent contractors.

The City alleged that CMI Transportation, K&R Transportation California and Cal Cartage Transportation Express have engaged in schemes to avoid paying minimum wage and employee benefits by classifying hundreds of workers as independent contractors even though the companies “exert near complete control” over the drivers’ schedule.

According to the report in the Los Angeles Times, all three companies are owned by NFI Industries, a New Jersey-based logistics firm. NFI purchased the businesses from Long Beach-based California Cartage in October.

The suits are the latest in a long-running dispute at the twin ports of Los Angeles and Long Beach, where many port truck drivers say they are improperly classified as independent contractors and must lease their rigs under unfair terms.

The terms, they say, are so onerous that for some pay periods they make nothing and actually end up owing the trucking company money.

A large part of the problem, the lawsuits say, are lease programs the companies established to comply with 2008 city rules mandating low-emission trucks be used to deliver goods to and from the ports of Los Angeles and Long Beach.

The city attorney alleged the leases place strict requirements on how many loads must be undertaken for the company, essentially chaining a so-called independent contractor to one firm.

At the end of the leases, the lawsuits allege drivers do not own their truck but are given an opportunity to purchase it for a “significant lump sum.” That leads many drivers to refinance the lease, once again binding the worker to one company.

Last decade, the Port of Los Angeles tried to mandate truckers be employees of companies, fearful that workers couldn’t afford the newer, cleaner rigs. But that mandate was struck down by federal courts, a decision that driver advocates blame for exacerbating an existing problem of abusive leases.

Though ongoing for years, the issue received renewed attention following a series of stories last year in USA Today.

In December, the Los Angeles City Council approved a plan to investigate claims of wage theft by port truck companies and look into whether the city could deny port access to companies in violation of labor laws.

Asked why the suit was filed against the three NFI companies when drivers allege misclassification among many operators, the City Attorney said his office is investigating “additional companies as well.”

Since 2011, the California labor commissioner’s office has awarded port truck drivers more than $46 million in cases where they contended they were misclassified as contractors.

Drivers and the Teamsters union have also organized numerous strikes to put pressure on trucking companies, as well as politicians.

Former licensed insurance agent Frederick Donald Rollins, 42, of Moreno Valley, was sentenced after pleading guilty to one felony count of grand theft, two counts of securities fraud and an aggravated white-collar crime enhancement for stealing more than $100,000 in insurance premiums and investment funds from 10 victims. Rollins has been sentenced to one year in custody and to pay $100,363 in restitution to his victims.

The California Department of Insurance launched an investigation after receiving multiple complaints, including one from an insurance carrier after a company attempted to file a claim for its injured employee under what turned out to be a non-existent policy number and the other from a business owner who discovered they had no legitimate workers’ compensation or liability coverage.

The investigation revealed that Rollins, while working as a licensed agent at an insurance agency, collected premium payments from several clients for workers’ compensation and commercial general liability coverage, but failed to place coverage with any insurance carrier.

After leaving that insurance agency, Rollins continued to sell fraudulent policies under a corporation he registered with the Nevada Secretary of State, but never licensed by the California Department of Insurance. The investigation revealed over $20,000 in premium payments Rollins collected from his victims, either made payable directly to him or to FDR Presidential Services, were spent on personal expenses and not forwarded to insurance carriers to obtain insurance coverage.

To conceal the scheme, Rollins issued false Certificates of Insurance, which listed the names of valid insurance carriers as the insurance providers of the fraudulent policies.

In addition to collecting premium payments for policies that were never placed, Rollins also allegedly presented himself as a registered stockbroker and accepted funds for investments from several victims. Rollins collected nearly $80,000 from various individuals, including insurance clients, under the guise that he was investing their money in stocks.

The Financial Industry Regulatory Authority, a non-governmental organization that regulates stockbrokers and brokerage firms, verified that Rollins has never been licensed in any capacity to act as a stockbroker.

Rollins is no longer licensed as he failed to renew his license after it expired in March 2014. The Department of Insurance is taking appropriate administrative action against Rollins’ license. The case was prosecuted by the Riverside County District Attorney’s Office.

Cal/OSHA has issued citations to Hadley Date Gardens Inc. of Thermal for serious workplace safety and health violations following a bee swarm that stung and killed a tree worker.

On July 3, 2017, a tree worker, Gerardo Balbuena, 49,  was spraying water on date palm fruit from the elevated bucket of a spraying rig when a beehive was disturbed. The bees repeatedly stung the worker, who suffered anaphylactic shock and died at the site.

After he was attacked, Balbuena went into cardiac arrest, said Tawny Cabral, a spokeswoman for the Riverside County Fire Department. He was pronounced dead at the scene.

Balbuena, a native of Morelos, Mexico, worked at Hadley Date Gardens for 27 years, said Albert P. Keck, the company’s president. He said Balbuena was a talented and hardworking employee with a loving family. “He is an immigrant that we should be very proud of as Americans,” Keck said.

Keck said he has been working alongside Balbuena since his family acquired the gardens. He recently told Balbuena they were “going to grow old together.”

“Recognized workplace hazards for tree workers include bee and other harmful insect exposure,” said Cal/OSHA Chief Juliann Sum. “Employers must identify and evaluate workplace hazards, and provide appropriate personal protective equipment and effective training to their workers.”

Cal/OSHA issued four citations totaling $41,310 in proposed penalties for workplace safety and health violations, two of which were classified as serious accident-related.

Hadley Date Gardens, Inc. failed to evaluate the worksite for hazardous bee and insect exposure, and failed to establish appropriate safety protocols, which include providing appropriate personal protective equipment and training that could have prevented this incident.

Cal/OSHA’s Tree Work Safety guidelines specifically cite bee stings as a potentially fatal hazard of which employers must be aware.

James Garbe, an experienced pharmacist, began working at Kmart pharmacy in Ohio in 2007. One day, Garbe picked up a personal prescription at a competitor pharmacy. When he reviewed his receipt, Garbe got a surprise: the competitor pharmacy had charged his Medicare Part D insurer far less than Kmart ordinarily charged it for the same prescription.

Curious to see whether his discovery was a one-off, he started inspecting Kmart’s pharmacy reimburse-ment claims. His amateur detective work revealed that Kmart routinely charged customers with insurance – whether public or private – higher prices than customers who paid out of pocket.

Not all cash customers were charged the same price: people in Kmart’s “discount programs” paid much less. But the ensuing investigation revealed that nearly all cash customers received the lower “discount program” prices. Meanwhile, those “discount program sales were ignored when Kmart calculated its “usual and customary” prices for its generic drugs for purposes of Medicare reimbursement.

Garbe shared his discovery with the government and filed a qui tam suit against Kmart Corporation on July 12, 2008 in the federal district in Los Angeles and later transferred to the Southern District of Illinois. He claimed that Kmart knowingly failed to disclose those discount  prices when reporting to federal health programs its usual and customary prices, which are typically used by those programs to establish reimbursement rates.

Now Kmart Corporation has agreed to pay $32.3 million to the United States to settle allegations that in-store pharmacies in Kmart stores failed to report discounted prescription drug prices to Medicare Part D, Medicaid, and TRICARE, the health program for uniformed service members and their families, the Justice Department announced today.

The agreement resolves allegations arising from a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery.

The settlement agreement with the United States is a part of a global $59 million settlement that includes a resolution of state Medicaid and insurance claims against Kmart. Garbe, who litigated the case after the government declined to intervene in the action, will receive $9.3 million.

The case was handled by the Justice Department’s Civil Division and the U.S. Attorney’s Offices for the Southern District of Illinois and Central District of California. Auditing assistance for the government’s investigation was provided by the U.S. Attorney’s Office for the Central District of California and the National Association of Medicaid Fraud Control Units. Investigative assistance was provided by the U.S. Department of Health and Human Services, Office of Inspector General.

The lawsuit is captioned U.S. ex rel. Garbe v. Kmart Corp., Case No. 12-CV-881-NJR-PMF (S.D. Ill.). The claims settled by this agreement are allegations only, and there has been no determination of liability.m

Reuters Health reported that drugmakers opened the new year by raising U.S. prices on dozens of medicines, but early data showed the increases generally remained within a 10 percent self-imposed limit in response to a backlash from consumers and politicians.

Soaring U.S. prices for both branded and generic drugs have sparked public outrage and government investigations over the past few years.

“Drug price increases are somewhat more constrained in 2017 and 2018 than they have been previously,” Cowen and Co analyst Eric Schmidt said.

Allergan Inc raised prices on 18 different drugs, including dry eye treatment Restasis and irritable bowel syndrome drug Linzess, by 9.5 percent, according to a research note released by Jefferies on Tuesday.

Jefferies cited data collected by Medi-Span Price Rx and refers to list price increases, before potentially significant discounts and rebates that drugmakers provide to win preferred coverage by insurers. Medi-Span did not respond to requests to confirm the data.

Allergan’s chief executive, Brent Saunders, in late 2016 pledged to keep price increases below 10 percent as part of what he called the company’s “Social Contract with Patients.”

Allergan spokesman Mark Marmur said the increases will be the only ones taken on those brands in 2018, adding that discounts to various payers should bring the actual increases to consumers down to the low single digits.

Other drugmakers raising prices include Amgen Inc (AMGN.O), Teva Pharmaceutical Industries Inc (TEVA.TA) (TEVA.N) and Horizon Pharma (HZNP.O), according to Jefferies and Cowen. Amgen raised the price on its blockbuster rheumatoid arthritis and psoriasis drug Enbrel by 9.7 percent and Teva increased prices on its ProAir HFA and ProAir RespiClick asthma inhalers by 6 and 3 percent, respectively.

Drug price increases are coming under more scrutiny from states. California Governor Jerry Brown in October signed legislation requiring drug manufacturers to give 60-day notice if prices are raised more than 16 percent over a two-year period.

However, the trade group representing U.S. drugmakers filed a lawsuit to stop California from implementing a law aimed at reining in prescription drug prices.The Pharmaceutical Research and Manufacturers of America (PhRMA) initiated litigation in the United States District Court for the Eastern District of California challenging SB 17, which it alleges is an unprecedented and unconstitutional California law.

In its federal complaint, PhRMA argues that SB 17 attempts to dictate national health care policy related to drug prices in violation of the United States Constitution, singles out drug manufacturers as the sole determinant of drug costs despite the significant role many other entities play in the costs patients pay, and will cause market distortions such as drug stockpiling and reduced competition.