Tag: 2021 News

Rebecca Gage sustained injury to the lumbar spine while employed as a deputy sheriff by the County of Sacramento.

In 2015, she requested advance disability pension payments per section 4850.4. Defendant made payments, but applicant contended that the payments were unreasonably delayed and sought penalties per section 5814. (Lab. Code, § 5814.)

The issue proceeded to trial. In his August 6, 2015 Findings of Fact and Order (F&O), the WCJ determined that advances made under section 4850.4 are compensation pursuant to section 3207 and subject to penalties under section 5814.

In a subsequent Opinion and Decision After Reconsideration, a split panel held that advances for a disability pension paid under section 4850.4 are not compensation and consequently not subject to the penalty provisions of section 5814. The F&O was rescinded and a new decision issued with the majority’s finding regarding this dispute.

The Court of Appeal reversed, and agreed with applicant that advance disability pension payments are compensation under section 3207 and the Appeals Board thus has jurisdiction to issue penalties per section 5814 for an unreasonable delay of payments made pursuant to section 4850.4. (Gage v. Workers’ Comp. Appeals Bd. (2016) 6 Cal.App.5th 1128 [81 Cal.Comp.Cases 1127].)

A Stipulation and Award issued on August 24, 2018 and the the parties resolved all penalties to date.

On February 16, 2021, defendant filed a DOR seeking an order compelling applicant to participate in the resolution process of Labor Code section 4850.4(f). They claimed that a mediation was scheduled to resolve the dispute, but Gage did not attend and subsequently unresponsive to communications.

4850.4(f) provides that “if an employee’s disability application is denied, the local agency and the employee shall arrange for the employee to repay any advanced disability pension payments received by the employee pursuant to this subdivision.”  And …”the local agency may take reasonable steps, including litigation, to recover the payments advanced.”

The WCJ ruled that “This request is denied because the WCAB does not have jurisdiction over this process, despite the Court of Appeal decision in this case…. Defendant further requests that the court set a hearing over the question of jurisdiction in order to create a record, but this appears to be a pure legal question for which no record is necessary and so this request is likewise denied.”

The WCAB panel granted reconsideration of this Order in the newest panel decision of Gage v County of Sacramento ADJ8010054 (2021).

Decisions of the Appeals Board “must be based on admitted evidence in the record.” Furthermore, decisions of the Appeals Board must be supported by substantial evidence. Additionally, all parties to a workers’ compensation proceeding retain the fundamental right to due process and a fair hearing under both the California and United States Constitutions. Additionally, a determination akin to summary judgment is not permitted in workers’ compensation proceedings. (See Cal. Code Regs., tit. 8, former § 10490, now § 10515 (eff. Jan. 1, 2020).)

The matter was remitted to provide both parties with an opportunity to present their arguments regarding this dispute and create an evidentiary record.

Maryam Hedayati suffered catastrophic injuries when Auto Club’s insured, Maurice Vanwyk, ran a red light and struck her in a pedestrian crosswalk. The accident severed one of Hedayati’s legs at the scene, shattered the other, and left her in a coma with broken bones throughout her body. Forty-three years old and a recent medical school graduate at the time, Hedayati was struck while walking as she took a break from studying for her medical board examinations.

The insured driver immediately notified Auto Club of the accident and authorized the Club to disclose his policy limits ($25,000); he also informed Auto Club he had no other insurance or assets. Auto Club’s policy with its insured required him to relinquish to the Club his right to negotiate settlement of potential tort claims falling within the policy. When he inquired about a release, Auto Club inaccurately told its insured driver Hedayati was not willing to sign one.

Despite repeated requests during settlement negotiations from Hedayati’s attorney, Auto Club initially declined to disclose the insured’s policy limits; eventually it relented, but even then Auto Club declined to provide written proof of those limits, which the Club knew was common practice to facilitate a settlement. Auto Club then withheld from Hedayati’s counsel the insured’s written declaration which indicated he had no other insurance, which the Club had confirmed, and the insured’s statements that he had no assets.

Auto Club also, despite multiple requests from Hedayati’s lawyer, failed to provide a copy of its insured’s policy which Hedayati’s lawyer needed to verify its terms.

Auto Club ultimately failed to settle the matter within its $25,000 policy limits. Hedayati subsequently obtained a $26 million judgment against the insured driver, along with assignment of the insured’s claim against the Club for breach of the covenant of good faith and fair dealing implicit in its policy with him.

In following litigation filed by Hedayati for bad faith against Auto Club, Auto Club moved for summary judgment, which was granted by the trial court. The Court of Appeal reversed in the published case of Hedayati v Auto Club.

The trial court explained it “must be guided by how case law defines bad faith” and agreed with “the definition [of bad faith] as an unreasonable refusal to accept a settlement offer within policy limits.” The court, however, reiterated its conclusion that Auto Club “never refused any of plaintiff’s policy limits settlement demands.” According to the court, “All plaintiff has shown is that defendant failed to respond by plaintiff’s self-imposed, arbitrary deadline to a demand defendant received the day before Thanksgiving for not just $25,000, but also for a signed declaration from the insured attesting to certain facts.”

The Court of Appeal carefully reviewed the law of insurance bad faith, and pointed out several errors in the ruling by the trial court. Good faith and fair dealing requirements obligate insurers to make reasonable efforts to settle claims against their insureds. An insurer that unreasonably fails to accept a settlement demand that falls within the policy limits of its insured acts in bad faith. An insurer may also be liable if it breaches other duties owed to the insured, such as the duty to investigate or the duty to communicate, and that breach prevented the insurer from settling the claim within policy limits. A liability insurer has a duty to communicate to its insured any settlement offer that could affect the insured’s interests, particularly where action is required by the insured to secure the settlement.

There was therefore a triable issue of bad faith, and summary judgment was not justified.

According to the Association of Air Medical Services, more than a half a million individuals are transported via air ambulance services each year. The majority of these transports are via helicopter in emergency situations; the remainder are fixed-wing transports for longer distances. Air ambulance companies successfully claimed that they were exempt from state fee schedules in litigation for more than a decade.

At one time, California Administrative Director Rule 9789.70(a) regulated ambulance services fees. The ambulance fee schedule as applied to air ambulance services was challenged by those providers in California.

Ultimately, the WCAB issued an en banc decision in 2013 ( Luis Enriquez (deceased) v Couto Dairy and Zenith Insurance Company ) conceding the preemption of federal law over Official Medial Fee Schedule limits if the air ambulance provider could establish that they were an “air carrier” that provides air transportation within the meaning of the Airline Deregulation Act, and that this Act would then preempt any California law.

This more or less ended the controversy in California workers’ compensation. And decisions in other jurisdictions had a similar result until a recent Texas Supreme Court Decision.

Excessive helicopter transport bills were the crux of the lawsuit in PHI Air Medical, LLC v. Texas Mutual Insurance Company, et al. A trial court rendered judgment in favor of eight plaintiff insurers, which included Texas Mutual Insurance Company and Hartford Underwriters Insurance Company, who disagreed with PHI’s per-trip charge for medically transporting injured workers.

In Split June 26, 2020 Opinion, the Supreme Court of Texas Rejected the Preemption Argument in Worker’s Compensation Disputes in the case of Tex. Mut. Ins. Co. v. PHI Air Med., LLC, 610 S.W.3d 839 (Tex. 2020), cert. denied, _ S. Ct. _, 2021 WL 1602647 (Apr. 26, 2021).

However, a similar case made its way into the Federal court system in Texas, on the same issue. Air Evac EMS, Inc., is an air ambulance provider that offers medical transport services to a wide variety of patients. That includes patients who are injured at their workplace. The price that Air Evac may charge for such transportation is accordingly subject to conflicting regulatory regimes.

Two of the Fifth Circuit sister circuits have unanimously held that the ADA preempts price controls on air ambulance services set by state workers’ compensation regulations. See Air Evac EMS, Inc. v. Cheatham, 910 F.3d 751 (4th Cir. 2018); EagleMed LLC v. Cox, 868 F.3d 893 (10th Cir. 2017).

Now the Fifth Circuit Court of Appeal agreed, and reversed the Texas Supreme Court position. In Air Evac EMS, Incorporated v Texas Commissioner of Insurance (2021).

“In doing so, we agree with our sister courts of appeals, which have unanimously held that the ADA preempts state price caps on air ambulance reimbursements, and that those state price caps are not saved by the McCarran- Ferguson Act. And we disagree with the Texas Supreme Court, which has reached contrary conclusions by a divided vote.”

A string of victories by plaintiffs in the several Monsanto Roundup cancer cases may be paving the way for workers’ compensation subrogation, should those cases be filed by California farm workers as industrial injuries. A new published opinion in California continues to be favoring plaintiffs.

Alberta Pilliod and her husband, Alva Pilliod, each developed non-Hodgkin’s lymphoma after years of spraying Roundup herbicide on their property.

The Pilliods sued Monsanto Company, the manufacturer of Roundup, for damages based on claims of design defect and failure to warn. After a six-week trial, the jury found for the Pilliods, awarded Alberta over $37 million in compensatory damages, awarded Alva over $18 million in compensatory damages, and awarded each of them $1 billion in punitive damages.

The trial court conditionally denied Monsanto’s motion for new trial, contingent on the Pilliods’ acceptance of substantially reduced compensatory and punitive damages, resulting in a total award to Alberta of about $56 million (including about $45 million in punitive damages) and a total award to Alva of about $31 million (including about $25 million in punitive damages). The Pilliods accepted the reductions.

On appeal, Monsanto argues that the Pilliods’ claims are preempted by federal law, the jury’s liability findings are not supported by substantial evidence, the jury was improperly instructed as to the Pilliods’ design defect claim, the jury’s causation findings are legally and factually flawed, the trial court abused its discretion by admitting certain evidence, and the verdict is the product of attorney misconduct.

Monsanto also argues that the punitive damages awards should be stricken or further reduced because they are unsupported by evidence and constitutionally excessive.

In their cross- appeal, the Pilliods argue that the trial court erred in reducing the jury’s awards for compensatory and punitive damages.

The trial court was affirmed in the published option of Pilliod v Monsanto.

The 84 page decision carefully reviewed the scientific evidence, and the history of the plaintiffs’ use of the evidence, and found that it supported the final result.

Monsanto argued that the Pilliods’ claims, which are brought under California common law, are preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA, 7 U.S.C. § 136 et seq.), which governs the use, sale, and labeling of pesticides, including herbicides. On that basis, Monsanto contends that the Court of Appeal should reverse the judgment and direct the trial court to enter judgment for Monsanto.

The Court was not persuaded by their argument. The supremacy clause of the United States Constitution “makes federal law paramount, and vests Congress with the power to preempt state law.” However, California common law does not impose any requirements that are different from or in addition to the requirements of FIFRA.

The San Francisco Sheriff’s Association, the union representing officers in the San Francisco Sheriff’s Department, said that many sheriff’s deputies would resign if the department sought to enforce a new coronavirus vaccine mandate.

In a Facebook post on Friday, the union wrote that the city’s mandate, which threatens termination for noncompliance, was out of step with Gov. Gavin Newsom’s own mandate, which at least offered regular testing as an alternative:

– – The SFDSA has always promoted Covid-19 Safety and has given out masks as well as face shields to first responders and the public during the peak of the pandemic. We believe the data and science speaks for itself and that masking works.
– – The problem we are faced with now is the strict San Francisco Mandate which is vaccinate or be terminated. If deputy sheriffs are forced to vaccinate a percentage of them will retire early or seek employment elsewhere.
– – The majority of Deputy Sheriffs are vaccinated. Approximately 160 out 700 Deputy Sheriffs are not vaccinated prefer to mask and test weekly instead of being vaccinated due to religious and other beliefs. Currently, the staffing at the SFSO is at the lowest it has ever been due to the past 9-month applicant testing restriction placed on the Sheriff’s Office by the Mayor.
– – San Francisco cannot afford to lose any more deputy sheriffs or any first responders. If they retire early or quit this will affect public safety even more. We would like San Francisco to be in alignment with the state guidelines which are require vaccination or test weekly.

San Francisco already faces a crisis in law enforcement, with petty crime soaring and Mayor London Breed proposing to redistribute $120 million from law enforcement to social programs (the final budget increased police funding, using the city’s general fund to provide the money for alternatives to policing, rather than cutting police funding directly)

And other California employers are facing similar headwinds. Disney revealed its new policy last week requiring employees to be vaccinated. That, however, only applied to salaried, and non-union cast members and not the 38,000 union members who make the bulk of the workforce.

The president of Local 362, which represents many cast members, including those in attractions and custodial, says the six unions making up the Service Trades Council have been negotiating with Disney all week and plan to continue doing so.

And union opposition appears in other states as well. The New York State United Teachers union voiced opposition after Gov. Andrew Cuomo encouraged schools to adopt such requirements.