Tag: 2020 News

Four class-action lawsuits have been filed in California federal court on behalf of small business owners who are feeling hopeless and terrified after four major banks rejected their Paycheck Protection Program (PPP) loan applications.

Congress passed the CARES Act in response to the COVID-19 pandemic, which allocated $349 billion in emergency funds for the small business loan program known as the Paycheck Protection Program. The program, which launched on April 3, was intended to provide loans of up to two-and-a-half times a business owner’s monthly payroll.

The loan program ran out of funds on April 16, leaving most of the small business applicants empty handed.

The lawsuits claim the nation’s four largest lenders involved in the paycheck protection program, JPMorgan, Bank of America, Wells Fargo and US Bank, rigged the loan process to benefit their bottom line.

According to the complaints, instead of a “first-come, first-served basis,” the banks processed the biggest loan amounts first, because it increased the banks’ origination fees while leaving more than 90% of the small businesses owners who applied for loans out of luck once the funds depleted. An origination fee is the compensation a lender receives for processing a new application.

To make matters worse, the banks allegedly concealed from the public that they were reshuffling the PPP applications received and prioritizing the applications that would make the banks the most money.

The lawsuits allege that as a result of their deceptive lending prioritization practices, giving preference to larger “small businesses” over true small businesses, banks received nearly $6 billion in fees while hundreds of thousands of loan applicants got nothing.

The four banks have either denied the allegations, or failed to respond to media requests for a response.

A similar action is pending against Bank of America in Baltimore, for allegedly giving its lending clients a higher priority and denying or limiting access to the Paycheck Protection Program to its depository clients and other small firms. The law firm noted that the bank updated its policy on April 4 by letting depository-only customers apply for PPP loans after the filing of a class action compliant.

However, the law firm said the bank added another requirement: Depository-only clients couldn’t have a credit card or loan with another bank.

The Baltimore firm claims that “Nothing in the CARES Act authorizes or permits defendants to pick and choose who would gain access to or benefit from the federally backed lending program,”

Senators Marco Rubio (R.-Fla.) and Ben Cardin (D.-Md.) have already chastised BOA for imposing criteria not found in the law and selectively choosing who can apply.

In the new panel decision of Harris v Numac Company, SCIF, SIBTF the WCAB went to great lengths elaborating on the requirements for SIBTF eligibility.

In 2005, George Harris fell ill with pneumonia after working on an AC unit in wet and cold weather. He was later diagnosed with stage II sarcoidosis.

On April 3, 2015, Harris filed an Application for Subsequent Injuries Fund Benefits, claiming he had a 2003 pre-existing disability to his back.

On April 23, 2015, the WCJ issued a Findings of Fact, Awards and Order finding that applicant sustained industrial injury on January 8, 2015 to his lungs/pulmonary, skin (sarcoidosis) and psyche, which caused 65% permanent disability.

The parties then went to trial on the following two issues: (1) SIBTF, and (2) the statute of limitations.

The WCJ issued a Findings and Award finding that applicant’s current injury resulted in 48% permanent disability when considered alone and without adjustment to applicant’s occupation or age. The WCJ concluded that 48% permanent disability satisfied the 35% threshold under section 4751, subdivision (b), and proceeded to add 38% from a prior permanent disability rating from applicant’s 1999 and 2003 back injuries. This addition resulted in 86% permanent disability, from which the WCJ then added 34%, which is the non-industrial portion of applicant’s current respiratory disorder that the WCJ reasoned was pre-existing.

As a result, the WCJ found that applicant’s combined pre-existing and current disabilities resulted in 100% permanent disability.

SIBTF’s Petition for Reconsideration raises three issues: (1) whether applicant’s prior 34% lung impairment is labor disabling, (2) whether the WCJ improperly added the prior disabilities to the current disability, and (3) whether applicant’s SIBTF claim is barred by the statute of limitations.

Based on Ferguson and Escobedo, the WCAB concluded that applicant’s sarcoidosis was not labor disabling prior to his industrial pneumonia. Applicant was asymptomatic and had no disability prior to the pneumonia. “This recognizes that the patient apparently had dormant sarcoidosis of non-industrial origin which was not symptomatic and causing no disability prior to the pneumonia, which had an industrial component, and that the patient had no disability prior to the reactivation of sarcoidosis precipitated by the episode of pneumonia.”

Thus, the WCJ erred in adding the 34% non-industrial dormant sarcoidosis in calculating applicant’s combined disability for purposes of SIBTF’s benefits.

However, the WCJ incorrectly determined the permanent disabilities that must be added for SIBTF benefit entitlement. It is derived by adding the 65% subsequent permanent disability, consisting of the three current impairments of respiratory disorder, contact dermatitis and arousal, and the 38% of pre-existing permanent disability in applicant’s back, resulting in 100% permanent disability.

There is no statutory time limit to apply for SIBTF benefits.  It must be filed within a reasonable time after learning from the board’s findings on the issue of permanent disability that the Fund has probable liability.

The Claims Journal reports that data from the California Division of Workers’ Compensation as of Thursday April 16, 1,527 claims coded for COVID-19 on claims notices had been filed, according to agency spokeswoman Erika Monterroza.

Some experts say that COVID-19 claims that require admission to an intensive care unit will likely run into the six figures for medical costs alone. What’s more, employers will be taking full responsibility for whatever complications arise from a coronavirus infection far into the future.

According to Science Magazine, the lack of oxygen and widespread inflammation caused by COVID-19 can damage kidneys, liver, heart, brain and other organs. Studies show that severe pneumonia caused by other diseases sometimes lead to scarring that causes long-term breathing problems. Pneumonia also increases the risk of future illnesses, including heart attack, stroke and kidney disease.

In one study of 138 patients hospitalized in Wuhan, China due to pneumonia from COVID-19, 20 percent suffered acute respiratory distress syndrome.

A separate study published by the New England Journal of Medicine in 2011 found that of 109 survivors of ARDS, 51% suffered physician-diagnosed depression, anxiety or both. Perhaps more relevant to workers’ comp, that study found that just 77 percent of the 83 patients who survived throughout the study period had returned to work five years after being treated. The study found that only 39% of patients were able to walk the distance expected for their age group in six minutes five years later, suggesting a high degree of physical impairment.

The governors of Kentucky, Arkansas, North Dakota and Florida and state regulators in Illinois, Washington, Michigan and Missouri have issued executive orders or amended rules to expand eligibility for workers’ compensation.

Most of those decrees ease the path for benefits only for healthcare workers and first responders, but an emergency order by the Illinois Workers’ Compensation Commission creates a presumption that work is the cause of COVID-19 if contracted by any “frontline worker” identified in Gov. J.B. Pritzker’s March 20 stay-at-home order. That includes workers at grocery stores, laundries, banks and hardware stores, among other businesses.

Kentucky Gov. Beshear issued a similarly broad executive order that created a COVID-19 presumption for workers in grocery stores, child-care centers, domestic violence shelters and rape crisis centers, in addition to first responders and healthcare workers.

In the meantime state legislators are also pushing to expand benefits for COVID-19. Earlier this month, Alaska Gov. Mike Dunleavy (R), Wisconsin Gov. Tony Evers (D) and Minnesota Gov. Tim Walz (D) signed into law bills that create a COVID-19 presumptions for first responders and some healthcare workers.

Bills to create presumptions for COVID-19 have been introduced in the New York, New Jersey, Pennsylvania, Ohio and Utah state legislatures.

Dr. Jennings Ryan Staley, a licensed physician and the operator of Skinny Beach Med Spa in San Diego, was charged with mail fraud in connection with the sale of what he described as a “100%” cure for COVID-19 that he said would render customers immune to the virus for at least six weeks.

FBI Agents began investigating this COVID-19 related fraud immediately upon receiving a tip from the public and shortly thereafter introduced an undercover agent. FBI Agents also executed a search warrant at the business of Skinny Beach Med Spa located in Carmel Valley. Skinny Beach Med Spa, offered a range of beauty-related services such as botox, hair removal, and fat transfer.

In late March, Skinny Beach allegedly began sending emails advertising “COVID-19 treatment packs,” described as a “concierge medicine experience” priced at $3,995 for a family of four, that included among other things access to Dr. Staley, the medications hydroxychloroquine and azithromycin, and “anti-anxiety treatments to help you avoid panic if needed and help you sleep.”

In a recorded call in which Dr. Staley was selling his services to a would-be customer – in fact, the undercover FBI agent – Dr. Staley described the medication he was offering as “an amazing cure” and a “miracle cure” that would cure COVID-19 “100%.” He added that if you take the medication without having the disease, “you’re immune for at least 6 weeks.”

Staley referred to medication he offered as a “magic bullet,” and said, “It’s preventative and curative. It’s hard to believe, it’s almost too good to be true. But it’s a remarkable clinical phenomenon.”

Staley also stated, “I’ve never seen anything like this in medicine, just so you know. Really, I can’t think of anything. That, you’ve got a disease that literally disappears in hours.”

Dr. Staley was interviewed a week later by the FBI as part of the overt investigation. When Dr. Staley was asked by agents whether Skinny Beach has told patients that the treatments are a 100% effective cure for COVID-19, Dr. Staley said, “No, that would be foolish. We would never say anything like that.” He also told the FBI that it was “not definitive” that the medication he offered cures COVID-19.

As set out in the complaint, Dr. Staley also offered the would-be customer Xanax (alprazolam) – a Schedule IV controlled substance – as part of his concierge package, and shipped the drug without conducting any sort of medical examination. He claimed that his broker was smuggling hydroxychloroquine from China to make his own pills, and had concealed the shipment from customs authorities by describing it as sweet potato extract. Shipping records confirmed that Dr. Staley was indeed importing a shipment of “yam extract,” scheduled to arrive in the U.S. in a matter of days.

“The sale of false cures, especially by a medical professional, will be vigorously investigated by the FBI,” said Omer Meisel, the Acting Special Agent in Charge of the FBI’s San Diego Field Office. “The FBI is using a variety of tools to identify anyone who exploits the current crisis with fraudulent scams or a variety of cyber schemes – and is proactively warning the public about products claiming to save lives, before losing their money or creating false hope. Scammers seeking to profit by exploiting fear and uncertainty during this COVID-19 pandemic will be brought to justice.”

The Press Democrat reports that law enforcement, firefighters and other first responders are raising alarms about the unique threat posed by the novel coronavirus to their health – and the need to protect personnel who get sick.

Some states have changed regulations to provide swifter access to workers’ compensation coverage for essential workers in the community during the coronavirus pandemic. These employee- funded benefits can cover lost wages, additional sick leave, job protections and death benefits.

Not yet in California, where lawmakers and Gov. Gavin Newsom have not taken up the issue, leaving each claim to be evaluated on a case- by-case by employers and insurance carriers.

Nine Santa Rosa police officers and one Sonoma County sheriff’s lieutenant have so far tested positive for the coronavirus, including longtime Santa Rosa Detective Marylou Armer, who died March 31 of complications from COVID-19, a respiratory disease caused by the disease. One Santa Rosa firefighter has tested positive for the virus.

The state must act – and soon – to assure these front-line workers don’t have to worry about lost wages, benefits and time away from work if they get sick, said Stephen Bussell, president of the Santa Rosa Police Officers’ Association. “We definitely have a higher risk level than the general public,” Bussell said.

Employees seeking workers’ compensation generally must prove they acquired the illness or got hurt on the job in order for their claims to be approved. There are exceptions for law enforcement and firefighters in California. State law provides automatic workers’ compensation eligibility if they get diseases like tuberculosis, cancer and pneumonia.

Those are just some of the ailments on a list of conditions that, if acquired while employed, allow police and firefighters to receive workers’ compensation benefits without having to document where they got sick or injured. Last year, that list was expanded to include post-traumatic stress syndrome, a change made to acknowledge the heavy and growing toll of wildfires.

“That gets them treatment and paid time-off faster,” said Laura Rosenthal, a Santa Rosa attorney who specializes in workers’ comp claims for law enforcement.

As a new disease, COVID-19 is not included on the list of conditions that make it easier for police officers and firefighters to file a workers’ comp claim.

But those employees who develop pneumonia while battling COVID-19 may have an easier time accessing workers’ compensation benefits because the lung infection is part of the state exemption, Rosenthal said.

No such protections for any workplace-acquired diseases or injuries exist yet for nurses or health care workers. Rosenthal said she hopes the pandemic pushes the state to consider adding protections for health care workers.

“You have law enforcement transporting an individual with a staph infection to the hospital, and he’s covered if he gets it,” Rosenthal said. “But the minute you drop them off at hospital, the workers there don’t get the same protection.”

Bussell said the Santa Rosa Police Department has so far been supportive of employees with coronavirus who are filing workers’ compensation claims, but it’s no easy task to document where they got it. Officers are in the community on patrol and various assignments, they often take individuals to hospitals and are in a variety of settings where they may come in close contact with people carrying the virus.

“Right now we’re doing our best to document exposures. It’s challenging to document it and be accurate,” Bussell said. “But the likelihood that it happened at work is greater than not.”