Tag: 2019 News

County and sheriff’s office authorities nabbed 540 pounds of processed pot and $140,095 overall from five sites in Santa Cruz and Monterey counties while investigating allegations of unlawful distribution and cultivation of cannabis. The businesses also are suspected of tax evasion, money laundering and operating without workers’ compensation insurance.  Five sites were searched April 3 by deputies assigned to the Santa Cruz County Licensing Office:

— Redwood Skyline at the 2700 block South Rodeo Gulch in Santa Cruz.
— Rooted Republic at the 100 block of Manfre Road in Watsonville.
— Newton Enterprises at the 7000 block of Highway 1 in Moss Landing.
— Monterey Botanicals at the 22000 block of Fuji Lane in Salinas.
— Boutique Unlimited at the 100 block of Airport Road in King City.

The business owners are accused of not complying with state and local regulations regarding cannabis cultivation, according to the press release.

In one suspected scheme, authorities claim there is evidence of at least one business using money orders “in a sophisticated effort to launder large amounts of currency” to avoid paying the Santa Cruz County cannabis business tax, according to the release.

All of the searched businesses were controlled by the same corporate group of people, “who are suspected of directing specific financial transactions to avoid financial reporting and tax obligations,” according to the release.

Recent regulations have spurred an uptick in investigations of a once-illicit market.

Multiple residential properties in Santa Cruz County are linked with the corporate officials being investigated. Those properties also have been the focus of recent investigations linked with unregulated, unlawful commercial cannabis. “Investigators are determining whether unregulated cannabis from those properties was introduced into the lawful, regulated market through the five businesses searched,” according to the release.

No one was arrested during the investigation Officials will consult with the District Attorney’s Office to determine whether criminal charges are suitable. Civil assessments also will be considered. “The total amount of unpaid cannabis tax to the County of Santa Cruz will be determined once business records and banking records have been examined,” according to the release.

The WCIRB Governing Committee met this month to review the WCIRB Actuarial Committee’s analysis of December 31, 2018, California workers’ compensation loss and loss adjustment expense experience.

Following review and discussion of the latest data and analysis, the Committee conferred on whether to direct the WCIRB to submit a mid-year 2019 advisory pure premium rate filing to the California Department of Insurance (CDI).

Pure premium rates by definition reflect indemnity and medical losses and loss adjustment expenses only, are advisory and are not required to be adopted by insurance companies. In California’s open rated workers’ compensation insurance market, insurers are largely free to file their own rates and rating plans directly with the CDI.

Recognizing that mid-year filings and adjustments to advisory pure premium rates can be disruptive to employers, agents and brokers as well as insurers, the Committee established a guideline in 2011 stating that mid-year filings would generally not be made by the WCIRB unless there was highly unusual volatility in experience or major legislative, regulatory or judicial action.

Based on the December 31, 2018, experience and analysis, the Committee determined that the overall improvement in experience since the January 1, 2019, approved pure premium rates was more moderate, approximately $0.06 per $100 of payroll or less than 4 percent, than in recent prior years and did not warrant a mid-year 2019 pure premium rate filing.

The Committee also noted in its determination that there are concerns relating to indicated increases in average 2018 claim severities as well as potential distortions in loss development arising from the recent dramatic reductions in pharmaceutical costs.

The Committee instructed the WCIRB to further analyze these areas in preparation for the January 1, 2020, annual pure premium rate filing to be presented to the Committee in August for submission to the CDI.

The Actuarial Committee’s analysis of December 31, 2018, experience is publicly available to all stakeholders as are the documents from today’s Committee meeting, including the agenda and materials presented at the meeting, on the Committee Documents page of the WCIRB website.

Oklahoma’s attorney general dropped all but a single claim against Johnson & Johnson and Teva Pharmaceutical Industries Ltd in a closely watched lawsuit alleging the drugmakers helped fuel the U.S. opioid epidemic.

The move by Oklahoma Attorney General Mike Hunter came ahead of an upcoming May 28 trial, the first in the United States to result from roughly 2,000 lawsuits seeking to hold manufacturers of painkillers responsible for contributing to the epidemic.

Hunter dropped the claims after announcing last week that OxyContin maker Purdue Pharma LP had along with the wealthy Sackler family who own it reached a $270 million settlement.

The 2017 lawsuit accused the three companies of engaging in deceptive marketing that downplayed the addiction risk from opioids while overstating their benefits. The Sacklers were not defendants in the case. The companies deny wrongdoing.

Hunter said he would continue to bring a public nuisance claim against J&J and Teva but was dropping five other claims, including that they violated the Oklahoma Medicaid False Claims Act. Hunter said dropping those claims would not impact the amount of damages the state is seeking. Hunter had been asking for more than $20 billion before Purdue’s settlement.

J&J in a statement said the state’s decision to drop most of its claims “underscores their lack of merit.”  It said the evidence at trial will show that the company appropriately marketed its pain medications.

Teva did not respond to a request for comment.

Hunter said the decision to refocus the case around the single claim that the companies caused a public nuisance that needs remediated will obviate efforts by the companies to delay the upcoming trial.

It will also transform what was to be a televised jury trial into a non-jury one in which a state court judge will decide the case, Hunter said.

More than 1,600 other opioid-related lawsuits are consolidated before a federal judge in Ohio, who has pushed for a settlement ahead of the trial before him in October. Other cases, including Oklahoma’s, are pending in state courts.

A coalition of influential California business groups says it will support a bill that would codify a California Supreme Court decision that placed strict limits on classifying workers as independent contractors – if the legislation includes additional exemptions for certain professions.

“We respectfully SUPPORT if AB 5 is further AMENDED to provide a more progressive and holistic approach that fit today’s modern workforce,” the coalition stated in letters to the bill’s author and the Assembly Labor committee submitted Monday afternoon.

The letters – signed by California Chamber of Commerce, California Retailers Association and California Building Industry Association, among others – ask for broader exemptions for professionals beyond those already agreed to for doctors and insurance agents.

The coalition also seeks a broader exemption for workers “who prefer to control their own schedule,” including consultants, travel agents, and truck, taxi and “gig economy’ drivers; and exempting short-term projects and business-to-business contracts.

The groups’ new position drew cautious praise from the bill’s author and supporters. “It’s a step forward,” said the bill’s author, Asm. Lorena Gonzalez (D-San Diego). “I’m glad they’re not opposing it.” But Gonzalez called the proposed amendments “too broad.”

“They can’t actually think I would agree to those things,” she said, adding that she will continue “to work industry-by-industry to find appropriate situations” for additional amendments and exemptions.

Gonzalez named hairdressers and real estate agents as industries she’s open to including and added that she is “interested but not sold on short-term projects.”

The California Supreme Court issued the ruling – commonly referred to as the “Dynamex decision” – a year ago. It stemmed from a case brought by delivery drivers who believed the company Dynamex misclassified them as independent contractors instead of employees.

Labor groups hailed the decision as a victory that would extend benefits and protections to more workers. Classifying workers as employees requires employers to pay for unemployment insurance, family leave and workers’ compensation, among other benefits and protections.

The “support-if-amended” position demonstrates the tightrope the Chamber and business groups must walk in the Dynamex debate. Employers argue the current version of the bill would “not only (hurt) the business model of a broad swath of industries and billions of venture capital dollars that are increasingly invested in businesses, but also (hinder) California as a national leader in the innovation economy.”

Purdue Pharma L.P. is a privately held pharmaceutical company owned principally by descendants of Mortimer and Raymond Sackler. The company is the target of the Opioid litigation stampede.

In 2007 it paid out one of the largest fines ever levied against a pharmaceutical firm for mislabeling its product OxyContin, and three executives were found guilty of criminal charges. Purdue continues to market and sell opioids

Purdue Pharma was founded in 1892. In 1952, the company was sold to two other medical doctors, Raymond and Mortimer Sackler. OxyContin, was introduced by the company in 1995. Under a marketing strategy that Arthur Sackler had pioneered decades earlier, the company aggressively pressed doctors to prescribe the drug, wooing them with free trips to pain-management seminars and paid speaking engagements. Sales soared.

OxyContin became a blockbuster drug. Purdue had increased its earnings from a few billion in 2007 to US$31 billion by 2016. That had increased to US$35 billion by 2017. According to a 2017 article in The New Yorker, Purdue Pharma is “owned by one of America’s richest families, with a collective net worth of thirteen billion dollars”.

Perhaps in response to rumors that Purdue is considering filing for bankruptcy protection as a strategy to limit its damages, the Massachusetts Attorney General Maura Healey’s lawsuit filed against the company in June in Suffolk County Superior Court, was revised earlier this year to include new allegations. The suit is now the first by a state to try to attempt to hold Sackler family members personally responsible for contributing to the opioid epidemic.

Healey’s complaint cites records to argue that family members, including Purdue’s former President Richard Sackler, personally directed deceptive opioid marketing while making $4.2 billion from Purdue from 2008 to 2016.

They did so even after Purdue and three executives in 2007 pleaded guilty to federal charges related to the misbranding of OxyContin and agreed to pay a total of $634.5 million in penalties, the lawsuit said.

But in their motion, the Sacklers said nothing in the complaint supports allegations they personally took part in efforts to mislead doctors and the public about the benefits and addictive risks of opioids.

They said their role was limited to that of typical corporate board members who participated in “routine” votes to ratify the management’s staffing and budget proposals.

“Not a single document shows an individual director engaging in any unlawful conduct regarding the sale of prescription opioids or ordering anyone else to do so,” the Sacklers’ lawyers wrote.

Healey, in a statement, called the motion “an attempt to avoid accountability.”