Tag: 2021 News

The Court of Appeal rejected the application of the “derivative injury rule” to limit the tort claim of the spouse of an injured worker who suffered an admitted workplace COVID injury,  The spouse was infected when the worker returned home from work, and later died from the COVID infection. Thus the exclusive remedy provision does not protect employers from these related tort claims.

Matilde Ek, a worker at a See’s distribution center in Southern California, contracted COVID-19 and apparently infected her 72-year-old husband, Arturo, who died. Ek said she worked on the See’s packing line without proper social distancing or other protections even though some workers were coughing, sneezing and showing other signs of COVID-19 infections.

She and her daughters sued See’s, alleging that since her workplace lacked sufficient safeguards against infection, the company is liable for his death.

See’s acknowledged that Ek’s illness was job-related but argued that since it was, the company was protected from liability for her husband’s death under the “exclusive remedy” doctrine.

Los Angeles Superior Court Judge Daniel M. Crowley refused to throw out Ek’s lawsuit, agreeing with Ek’s attorney that her husband’s death was a separate event from her workplace infection.

And the Court of Appeal affirmed the trial court in the published case of See’s Candies, Inc. v. Super. Ct. (2021).

Defendants argued plaintiffs’ claims are barred by the “derivative injury doctrine” (see Snyder v. Michael’s Stores, Inc. (1997) 16 Cal.4th 991, 1000 (Snyder)), under which “the WCA’s exclusivity provisions preempt not only those causes of action premised on a compensable workplace injury, but also those causes of action premised on injuries ‘ “collateral to or derivative of” ’ such an injury.’ (King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1051 (King).) Among other things, this doctrine preempts third party claims “based on the physical injury or disability of the spouse,” such as loss of consortium or emotional distress. (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 162-163.)

In rejecting this argument the Court of Appeal said that “Snyder approved of cases applying the doctrine to claims by family members for losses stemming from an employee’s disabling or lethal injury, such as wrongful death, loss of consortium, or emotional distress from witnessing a workplace accident. In contrast, the Supreme Court called into question a case applying the derivative injury doctrine outside these contexts based on causation alone.”

However, this decision is just a small part of the case which has yet to be litigated. The Court of Appeal noted “we have no occasion to decide whether defendants owed Mr. Ek a duty of care or whether plaintiffs can demonstrate that Mr. or Mrs. Ek contracted COVID-19 because of any negligence in defendants’ workplace, as opposed to another source during the COVID-19 pandemic. The parties have not raised these issues, and we decline to address them sua sponte.”

The Supreme Court received at least 11 emergency applications on Monday challenging the federal mandate for businesses with over 100 employees to require Covid-19 vaccinations or weekly testing according to a report by Courthouse News.

Enforced through the Occupational Safety and Health Administration, the mandate was reinstated on Friday when a Sixth Circuit panel overturned what had been pause on the nationwide rule imposed by a federal judge. It is set to take effect on January 4.

The groups challenging Biden’s mandate include conservative groups like the Heritage Foundation, 27 states, business associations like the National Federation of Independent Business and the Job Creators Network, BTS Holdings, religious groups like the Word of God Fellowship and the Southern Baptist Theological Seminary, companies like Phillips Manufacturing and construction workers. Most of the groups are challenging OSHA’s authority to enforce the mandate while others are also alleging violations of the First Amendment and religious freedom.

Without a stay from the high court, the mandate would affect about 84 million workers and require unvaccinated employees to wear face masks and be subject to weekly testing for Covid-19.

Ohio is at the helm of the pack of 27 Republican-led states claiming that the mandate is unprecedented and that OSHA does not have the authority to enforce it because Covid-19 is not an occupational danger that the agency can regulate, the virus does not present a “grave” danger, and the mandate does not satisfy the emergency provision requirement.

The National Federation of Independent Business claims the mandate will cause “irreparable harm” on hundreds of thousands of businesses and will cause a devastating labor upheaval.

The religious organizations are challenging the mandate because it does not offer accommodations required by the Religious Freedom Restoration Act of 1993.

Some of the organizations – like BTS Holdings – say Congress did not grant OSHA the powers to authorize the mandate and if it did it would be violating the constitution.

Friday’s majority opinion by U.S. Circuit Judge Julia Smith Gibbons said that the mandate was “not a novel expansion of OSHA’s power” and that the agency had the authority to regulate infectious diseases not unique to the workplace.

“Vaccination and medical examinations are both tools that OSHA historically employed to contain illness in the workplace,” the Bush appointee wrote.

OSHA first announced the mandate in November. The Fifth Circuit had granted a stay to BTS Holdings in its challenge against the mandate, but the onslaught of challenges filed across the country triggered a lottery process and the cases were assigned to the Sixth Circuit for all further proceedings.

Monday’s stay applications were submitted to Justice Brett Kavanaugh, per court rules, and a response from the Biden administration is due by Dec. 30.

The administration has other vaccine mandates that are being challenged in court, and the high court has seen multiple challenges on vaccine mandates come across their docket this year already. So far, the court has turned down relief for workers seeking religious exemptions. Last week the Fifth Circuit overturned an injunction on a vaccine mandate for health care workers in federally funded facilities.

A former doctor and his company were found guilty by a federal jury of scheming to defraud private insurance companies and the Tricare health care program for military service members by fraudulently submitting an estimated $355 million in claims related to the 1-800-GET-THIN Lap-Band surgery business.

Julian Omidi, 53, of West Hollywood, and an Omidi-controlled Beverly Hills-based company, Surgery Center Management LLC (SCM), were found guilty of 28 counts of wire fraud and three counts of mail fraud. Omidi also was found guilty of two counts of making false statements relating to health care matters, one count of aggravated identity theft and two counts of money laundering. Omidi and SCM were found guilty of one count of conspiracy to commit money laundering.

According to evidence presented at his three-month trial, Omidi, a physician whose license was revoked in 2009, controlled, in part, the GET THIN network of entities, including SCM, that focused on the promotion and performance of Lap-Band weight-loss surgeries. Omidi established procedures requiring prospective Lap-Band patients – even those with insurance plans he knew would never cover Lap-Band surgery – to have at least one sleep study, and employees were incentivized with commissions to make sure the studies occurred.

Omidi used the sleep studies to find a reason – the “co-morbidity” of obstructive sleep apnea – that GET THIN would use to convince the patient’s insurance company to pre-approve the Lap-Band procedure.

After patients underwent sleep studies – irrespective of whether any doctor had ever determined the study was medically necessary – GET THIN employees, acting at Omidi’s direction, often falsified the results. Omidi then used the falsified sleep study results in support of GET THIN’s pre-authorization requests for Lap-Band surgery.

Relying on the false sleep studies – as well as other false information, including patients’ weights – insurance companies authorized payment for some of the proposed Lap-Band surgeries. GET THIN received an estimated $41 million for the Lap-Band procedures.

Even if the insurance company did not authorize the surgery, GET THIN still was able to submit bills for approximately $15,000 for each sleep study, receiving an estimated $27 million in payments for these claims. The insurance payments were deposited into bank accounts associated with the GET THIN entities.

The victim health care benefit programs include Tricare, Anthem Blue Cross, UnitedHealthcare, Aetna, Health Net, Operating Engineers Health and Welfare Trust Fund, and others.

Prosecutors estimate Omidi’s total fraudulent billings at approximately $355 million.

United States District Judge Dolly M. Gee has scheduled an April 6, 2022 sentencing hearing, at which time Omidi will face a statutory maximum sentence of 20 years in federal prison for each of the mail fraud, wire fraud, and money laundering counts, as well as a mandatory consecutive two-year sentence for aggravated identity theft.

In 2014, the government seized more than $110 million in funds and securities from accounts held by individuals and entities involved in the criminal scheme, including Omidi. The government is seeking forfeiture of some or all those funds in the criminal case, and intends to pursue civil forfeiture of some or all of the assets.

The criminal case against corporate defendant Independent Medical Services Inc., another company controlled in part by Omidi, has been severed from this litigation and stayed. Co-defendant Dr. Mirali Zarrabi, 59, of Beverly Hills, was acquitted of all charges.

The U.S. Food and Drug Administration, Office of Criminal Investigations; the FBI; the Defense Criminal Investigative Service; IRS Criminal Investigation; and the California Department of Insurance investigated this matter.

Assistant United States Attorneys Kristen A. Williams, Ali Moghaddas, David H. Chao of the Major Frauds Section, David C. Lachman of the General Crimes Section, and James E. Dochterman of the Asset Forfeiture Section are prosecuting this case.

The U.S. Supreme Court will hear a case involving a San Fernando Valley business that could impact the Private Attorney General Act, a law that went into effect in 2004 and which allows employees of a business to sue over labor law violations even if they were not impacted by the violations. At issue in the case is the validity in California of employer-employee arbitration agreements.

In the underlying case of Moriana v Viking River Cruises Inc. a company in Woodland Hills, Angie Moriana sued her former employer Viking River Cruises, Inc. seeking recovery of civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).

Viking moved to compel Moriana’s claims into arbitration. The trial court denied Viking’s motion and the 2nd district Court of Appeal affirmed in the unpublished opinion which will now be reviewed by the U.S. Supreme Court.

Viking argued that the United States Supreme Court’s decision in Epic Systems Corp. v. Lewis (2018) overruled the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, in which the California Supreme Court held “that an employee’s right to bring a PAGA action is unwaivable,” and that “where . . . an employment agreement compels the waiver of representative claims under the PAGA, it is contrary to public policy and unenforceable as a matter of state law.”

Epic Systems Corp. v. Lewis was one of three cases consolidated by the United States Supreme Court in 2017 that raised the issue of the Federal Arbitration Act’s preemptive effect over private employment arbitration agreements prohibiting class and collective actions.

Numerous California Courts of Appeal have rejected the contention that Iskanian is no longer good law in the wake of Epic. On federal questions, intermediate appellate courts in California must follow the decisions of the California Supreme Court, unless the United States Supreme Court has decided the same question differently. Thus the 2nd District Court of Appeal rejected Viking’s arguments on forcing the case to arbitration, and followed Iskanian instead of Epic Systems.

The cruise line argued in its petition to the U.S. Supreme Court “whether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under PAGA.” And that the California Supreme Court was wrong in the 2014 Iskanian case.

In an email to the members of the California Business and Industrial Alliance, the group’s founder and president, Tom Manzo, said that the implications of a Supreme Court decision in Viking’s favor cannot be understated.

“If PAGA cases are subject to arbitration, it offers a clear pathway for employers to obtain relief from frivolous PAGA lawsuits,” wrote Manzo, who started the group, based in Sunland, in 2017 to specifically oppose the state law.

“In advance of the Supreme Court’s oral arguments next spring, we plan to submit a comprehensive amicus brief marshaling all of the data, stories and arguments that you – our members – have helped support these past few years,” Manzo wrote in the email.

According to its website “The California Business and Industrial Alliance (CABIA) is the only trade group exclusively focused on fixing the Private Attorneys General Act (PAGA).” Now that the U.S. Supreme Court has agreed to resolve the dispute between state and federal law, it is likely that CIABA will indeed achieve its mission.

The California Department of Industrial Relations maintains an online database on PAGA notices filed.

Voice of OC is a 501(c)(3) nonprofit news source that has a focus on life in Orange County. One of its current projects is requesting information from the county regarding the worker’s compensation claim costs for COVID claims filed by county employees. They just published an update summarizing current workers’ compensation COVID claims frequency and costs.

Orange County sheriff staff are getting hit with COVID-19 illnesses at a much higher rate than other large county departments, and are by far the largest share of pandemic-related worker’s compensation costs the county has paid so far, according to county data obtained through a records request by Voice of OC.

Sheriff staff, who had the lowest self-reported vaccination rate – at 16% – among county employees as of the latest available data from August, are around 20% of the county government workforce. Yet they account for nearly half of the county worker’s compensation claims for COVID illnesses – $1.4 million of the $3 million total, and about 950 of the roughly 2,000 claims so far – according to county data provided this week.

Voice of OC followed up two weeks ago to request updated vaccination rate data, but the county has not provided it yet.

The next biggest department for COVID worker’s comp costs is the Social Services Agency, which has more employees than the Sheriff’s Department, but half as many Covid-related claims and costs. Many Social Services Agency employees work directly with the public and some visit houses to conduct wellness checks on children and seniors.

The high sheriff’s figures, which have privately drawn concern from county leaders, have prompted questions about what’s driving the department’s higher COVID rates and what can be done to better protect workers.

Sheriff officials didn’t have answers to questions Wednesday about whether it’s related to lower vaccination rates, the indoor work environment at jails – or both – and whether managers have analyzed the data to better protect workers’ health. Department spokeswoman Carrie Braun said she’d have a response after getting further clarification from county officials about the worker’s compensation data.

In a statement, she noted that both sworn and non-sworn sheriff staff have been serving in-person throughout the COVID-19 pandemic. “They have worked tirelessly to provide for the safety of Orange County residents both in the jail and on the streets. Unlike other types of jobs, law enforcement is not a public service that can be provided remotely,” Braun wrote.

“The Department has implemented COVID-19 safety measures consistent with guidelines provided by public health officials for the health and safety of our 3,800 employees.”

The sheriff’s deputies’ union’s president didn’t respond to a phone message for comment. The union previously pushed back against a state mandate requiring jailhouse deputies to be vaccinated.

No OC sheriff staff are reported to have died from COVID-19, though law enforcement officers in neighboring counties have died from the virus.

Among the County of Orange workplaces with active COVID outbreaks this summer were the Sheriff’s Department central jail and headquarters complex in Santa Ana, according to county data.

The latest-available vaccination data showed the Sheriff’s Department had the lowest self-reported vaccination rate among county departments, as outbreaks continued hitting county workplaces in August. At the time, just 16% of sheriff staff self-attested to being vaccinated, compared with 75% of Board of Supervisors staff and about 68% percent of the general population who were eligible for shots at the time, according to county data.

Since June, county data shows sheriff staff have filed an additional 264 Covid-related worker’s comp claims, totaling $367,000. In contrast, staff at the county Health Care Agency – which has about 80% as many employees as the Sheriff’s Department – filed just 15 new claims during the same period, totaling about $500 altogether, according to the county data.