Tag: 2019 News

The U.S. Supreme Court rejected Maryland’s bid to revive a law aimed at preventing price gouging by pharmaceutical companies, dealing a setback to the power of states to rein in prescription drug costs.

Last year, Maryland became the first state in the country to give its attorney general the power to take legal action against drug companies that dramatically increase the price of off-patent or generic drugs.

The complicated law applied to generic or off-patent drug makers that manufacture a medicine at least three other firms also make. If those conditions applied, companies could not impose a significant price increase without justifying it to the attorney general, who could ask a judge to order that the price increase not take effect. Violating the law carried a $10,000 fine.

The Association for Accessible Medicines, a trade group representing generic drug manufacturers such as Teva Pharmaceutical Industries Ltd and Mylan NV, sued its Attorney General Brian E. Frosh and Dennis R. Schrader, who was the state’s acting health secretary, to block the measure.

The case worked it way to the U.S. Court of Appeals for the Fourth Circuit, which said in a 2-to-1 ruling that the 2017 law is unconstitutional because it violates the commerce clause of the U.S. Constitution.

“Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause to the Act,” Judge Stephanie D. Thacker wrote for the majority opinion. “We hold that the Act is unconstitutional under the dormant commerce clause because it directly regulates transactions that take place outside Maryland.”

Maryland argued that the 4th Circuit’s decision not only prevents Maryland and other states from reining in abusive prescription-drug prices that harm consumers and public health but that the ruling could call into question other state regulatory efforts. At issue was whether the measure violated Supreme Court precedents that constrain states from enacting laws that burden out-of-state competitors.

The U.S. Supreme Court just declined to take up Maryland’s appeal of the 2018 federal appeals court ruling, without comment, letting a lower court ruling against the law stand.

So far, California as had better results with S.B. 17. The California law requires all drug price hikes over 16% over a two-year span to be subject to transparency requirements, which would discourage double-digit price increases and better negotiations between drug companies and purchasers.

Last August, the U.S. District Court, Eastern District of California dismissed a lawsuit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA) to halt S.B. 17.

PhRMA filed this lawsuit alleging the law as unconstitutional and seeking a permanent injunction preventing its implementation. The U.S. District Court dismissed the suit as PhRMA did not produce enough facts to substantiate their claims or standing.

Evangelina Ruiz began work as a legal assistant with Carter and Carter, APLC in 2007 at their office in Corona. Christopher Carter specialized in mold and mold remediation cases.

In September 2011, Christopher Carter accepted a tort case involving black water and mold in a house. Ruiz was assigned to inspect documents in the case, which she alleged contained mold and mold spores.

Ruiz became ill. Ruiz filed a worker’s compensation claim but Carter advised Ruiz it did not carry worker’s compensation insurance during the time that she alleged to have been sickened by the documents.

Ruiz filed a lawsuit in the trial court and with the Worker’s Compensation Appeals Board (WCAB).

The second amended complaint filed in the trial court, which alleged one cause of action for premises liability. Carter brought a motion for summary judgment, which was granted by the trial court.

Ruiz appealed the grant of Carter’s Motion claiming that (1) because Carter was an illegal uninsured employer, she only had to prove worker’s compensation causation, which is a lower standard than the civil causation standard used by the trial court in granting the Motion; (2) pursuant to Labor Code section 3708, Carter had the burden to prove it was not negligent; and (3) the trial court erred by rejecting Ruiz’s argument when she filed the first amended complaint, that she could allege different theories of negligence

The court of appeal conclude the Motion was properly granted and affirm the judgment in the unpublished case of Ruiz v. Carter & Carter, APL.

LC 3706 states, “If any employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against such employer for damages, as if this division did not apply.” LC 3708 mandates a presumption not present in other tort actions that the injury to the employee “was a direct result and grew out of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence.”

Here, Ruiz had the burden of proving by a preponderance of the evidence that she was injured in the Carter offices. Ruiz failed to provide any competent evidence with the SAC to support she was injured at Carter’s office.

The burden of proof did not shift to Carter under Labor Code section 3708 to prove that it was not negligent because Ruiz failed to present competent evidence that she had suffered an injury at work.

A Beverly Hills workers’ compensation orthopedic surgeon has pleaded guilty to two felony counts of billing fraud for selling marked-up goods to his practice from his own medical supply company over several years.

Gil Tepper M.D. is permanently disqualified from being a provider in the workers’ compensation system and is prohibited from operating any physician-owned medical supply distribution company.

Tepper was ordered to pay more than $1.7 million in restitution to nine insurance companies. The defendant was also sentenced to six months of electronic monitoring and must complete 300 hours of community service.

About $1.1 million in restitution will be paid from Tepper’s frozen funds and he must pay the remaining amount by sentencing on Jan. 28, 2020. If Tepper doesn’t comply with the terms of the plea agreement, he faces a possible maximum sentence of six years in state prison.

According to his arrest warrant, Tepper created and founded Metalink Distributors, which held itself out to be a manufacturer and supplier of medical hardware products. Prosecutors claimed Tepper employed an alleged co-conspirator Dr. Jorge Vital as the Director of Patient Financial Services for MMMC.

During a 2016 raid, officials seized records showing that Tepper used Metalink as a fraudulent shell company to receive healthcare reimbursement payments from insurance companies and government programs through workers’ compensation claims.

MMMC allegedly purchased surgical hardware implants and medical devices from FDA registered surgical hardware suppliers, distributers and manufacturers. Then Vital and Tepper allegedly made it appear that MMMC purchased its surgical hardware from Metalink by creating Metalink invoices with grossly inflated costs, with an average markup 300% over the actual costs.

But MMMC never ordered nor received surgical hardware from Metalink. Vital supposedly instructed MMMC employees to submit the misleading Metalink invoices to numerous insurance companies, including Liberty Mutual, Sedgwick, Farmers, ICW Group Insurance Companies, and Berkshire Hathaway Homestate Companies.

Tepper testified in his deposition in 2012 that he was not aware where Metalink ordered their surgical hardware from and denied ever owning Metalink.

His co-defendant, Jorge Antonio Vital ,is charged with eight counts of workers’ compensation insurance fraud and one count each of conspiracy to commit a crime and attempted perjury under oath, all felonies. The charges include an allegation of taking property valued at more than $3.2 million.

A pre-preliminary hearing for Vital is scheduled for Feb. 19 in Department 50 of the Foltz Criminal Justice Center.

The case was investigated by the District Attorney’s Bureau of Investigation. Case BA456262 was prosecuted by Head Deputy District Attorney Jennifer Lentz Snyder of the Healthcare Fraud Division.

The CDC reports that millions of workers drive or ride in a vehicle as part of their jobs, and motor vehicle crashes are the leading cause of work-related deaths in the United States. All workers are at risk of crashes, whether they drive light or heavy vehicles, or whether driving is a main or incidental job duty. And, the risk of industrial transportation related injury will likely increase according to a new UCLA study of an emerging urban transportation phenomena.

West Los Angeles is the epicenter of the electric scooter phenomenon — Santa Monica was one of the first U.S. cities in which the scooters were widely used — but the vehicles are now available in more than 60 cities nationwide and about a half dozen locations outside of the U.S.

UCLA researchers reporting in the JAMA Network, have found that people involved in electric scooter accidents are sometimes injured badly enough — from fractures, dislocated joints and head injuries — to require treatment in an emergency department.

The researchers examined data from 249 people who were treated at the emergency departments of UCLA Medical Center, Santa Monica, and Ronald Reagan UCLA Medical Center between Sept. 1, 2017, and Aug. 31, 2018. The study found that about one-third of them arrived by ambulance, an indication of the severity of their injuries.

“There are thousands of riders now using these scooters, so it’s more important than ever to understand their impact on public health,” said Dr. Tarak Trivedi, the study’s lead author, an emergency physician and scholar in the National Clinician Scholars Program at the David Geffen School of Medicine at UCLA.

The research, published Jan. 25 in JAMA Network Open, is the first published study on injuries caused by electric scooters. It reports that the most common mechanisms of injury among scooter riders were falls (80 percent), collisions with objects (11 percent), or being struck by a moving vehicle such as a car, bicycle or other scooter (9 percent).

E-scooters can reach speeds of about 15 miles per hour, and it has become common to see them zipping along streets and sidewalks — even though they are intended to be used on streets only — often dodging pedestrians and motorists. Unused scooters are frequently left at the edge of curbs, but they sometimes are abandoned in places where they obstruct sidewalks or block building entrances.

Cities have adopted a hodgepodge of responses to the safety issues posed by the new phenomenon. For example, in August 2018, Santa Monica began a public safety campaign with Bird and Lime, two of the leading e-scooter suppliers. A month later, the city launched a pilot program intended to develop administrative regulations on shared scooters and bikes. (Santa Monica already has a longstanding rule prohibiting bikes and electric devices from sidewalks.)

The authors wrote that the Segway, a two-wheeled personal transporter that was introduced in the early 2000s, and a precursor of the scooters, also carried a serious risk for orthopedic and neurologic injuries.

Last fall, Governor Edmund G. Brown Jr. signed SB 1300 (Jackson; D-Santa Barbara), a comprehensive bill that makes several changes in the law for making sexual harassment claims.

The bill also amends FEHA to specify that an employer may be responsible for the acts of nonemployees for all forms of harassment, rather than the responsibility being limited to sexual harassment, as it was before SB 1300 took effect.

Further, the bill prohibits a prevailing defendant from being awarded fees and costs unless specific conditions are met.

SB 1300 prohibits employers from requiring employees to sign a release of claims under the Fair Employment and Housing Act (FEHA) in exchange for a raise or as a condition of employment.

These provisions took effect on January 1, but employers and defense counsel need to be aware of the bill’s “intent language.”

The broad “intent” language is likely inconsistent with canons of statutory construction and prior court precedent. As such, SB 1300’s intent language will surely increase employer costs as lawyers attempt to erroneously utilize the “findings and declarations” in SB 1300 to expand FEHA litigation.

The general rule of statutory construction is to effectuate the intent of the Legislature, which basically requires the courts to give the statutory language its usual and ordinary meaning. A statute is changed by a material amendment to the statutory language itself, but not by “legislative intent” language.

One intent declaration concerns the Legislature’s view about whether a single harassment incident still could be considered a violation of FEHA. To quote SB 1300: “the Legislature hereby declares its rejection of the United States Court of Appeals for the 9th Circuit’s [decision] and states that the opinion shall not be used in determining what kind of conduct is sufficiently severe or pervasive to constitute a violation of [FEHA].”

Yet, the author removed from her bill the statutory provisions that would have lowered the severe or pervasive standard.

Another declaration concerns the Legislature’s view that “harassment cases are rarely appropriate for disposition on summary judgment.” However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment. However, SB 1300 does not amend Code of Civil Procedure Section 437(c), which sets forth the requirements regarding motions for summary judgment.

Additionally, the intent language of SB 1300 seeks to lower the legal standard for hostile work environment claims by referring to a single quote by a single justice’s concurring opinion in a U.S. Supreme Court 9-0 decision: :the Legislature affirms its approval of the standard set forth by Justice Ruth Bader Ginsburg in her concurrence that, in a workplace harassment suit, ‘the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.’”

Given that SB 1300 did not change the statutory standards for summary judgment and hostile work environment, the superfluous intent language in SB 1300 does not serve to provide guidance regarding either of these standards. As the U.S. Supreme Court has stated, “We are governed by laws, not by the intentions of legislators.”