Tag: 2021 News

29 year old Hakob Kojoyan, who lived in Northridge, was sentenced to 33 months in prison and ordered to forfeit his Palm Springs house for participating in a scheme involving the unlicensed wholesale distribution of prescription drugs.

Kojoyan admitted that he engaged in a scheme to distribute illegally obtained prescription drugs to unsuspecting purchasers. In his plea agreement, Kojoyan stated that he and his associates used a Pennsylvania company, Mainspring Distribution LLC, to pose as legitimate prescription drug wholesalers.

They then obtained prescription drugs from unlicensed, black market sources in California. They sold the drugs through Mainspring to unknowing wholesale customers, falsely representing that the drugs were legitimately sourced from licensed suppliers.

Kojoyan and his co-defendants avoided dealing in generic drugs and instead specialized in expensive name-brand prescription drugs used to treat HIV, such as Atripla. Kojoyan himself also supplied prescription drugs for such resale, though he had no license to do so.

Congress mandated prescription drug wholesalers provide their customers with detailed information about the drugs they sell, including a transaction history tracing the drugs back to their licensed manufacturer. The government asserted Kojoyan and his co-conspirators knew about these federal regulations designed to protect vulnerable patients, and they worked diligently to evade them.

They stole the identity of a licensed prescription drug company supplier in California and prepared paperwork falsely suggesting their drugs came from that supplier. The government described how they further mimicked the appearance of a legitimate supply chain by opening bank accounts in names misleadingly similar to the licensed supplier and routing the proceeds of their fraudulent sales through the accounts.

The government further asserted that bank accounts under the control of Kojoyan received approximately $2.2 million from Mainspring-associated accounts, much of which was laundered and distributed to co-conspirators. Kojoyan’s earnings were invested into a house in Palm Springs, which the Court ordered forfeited to the government.

This case is being prosecuted by the Corporate Fraud Strike Force of the United States Attorney’s Office. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Many California agricultural workers have been exposed to a pesticide known as Roundup, and some of them may develop cancers. These cancer cases can then become continuous trauma claims under workers’ compensation law.

Thousands of Roundup tort cases are pending in civil courts in several states. A favorable outcome will likely support subrogation in the decades ahead for these claims.

Monsanto Company manufactures Roundup, a pesticide with the active ingredient glyphosate. Since 2015, thousands of cancer victims have sued Monsanto in state and federal court, alleging that Roundup caused their non-Hodgkin’s lymphoma. This appeal arises out of the first bellwether trial for the federal cases consolidated in a multidistrict litigation.

The jury returned a verdict in favor of plaintiff Edwin Hardeman, awarding him $5,267,634.10 in compensatory damages and $75 million in punitive damages. The district court reduced the jury’s punitive damages award to $20 million.

Monsanto appealed, arguing the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) preempts Hardeman’s failure-to-warn claims; the district court made a series of evidentiary and jury instruction errors; the district court erred in denying judgment as a matter of law; and the punitive damages award violates California law and the Due Process Clause.

Hardeman cross-appeals, arguing the jury’s $75 million punitive damages award was constitutional.

The Ninth Circuit Court of Appeals affirmed the district court in the published case of Edwin Hardeman v Monsanto Company.

The 74 page opinion held that:

(1) Hardeman’s state failure-to-warn claims are not preempted by FIFRA;
(2) the district court ultimately applied the correct standard from Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and did not abuse its discretion in admitting Hardeman’s expert testimony;
(3) the district court did not abuse its discretion in admitting the International Agency for Research on Cancer’s classification of glyphosate as probably carcinogenic and three regulatory rejections of that classification but excluding evidence from other regulatory bodies;
(4) the district court’s jury instruction on causation, though erroneous, was harmless;
(5) Monsanto was properly denied judgment as a matter of law because evidence shows the carcinogenic risk of glyphosate was knowable at the time of Hardeman’s exposure; and
(6) evidence supports a punitive damages award, punitive damages were properly reduced, and the reduced award – while close to the outer limits – is constitutional.

This is the second loss on appeal for Bayer AG, which acquired the agrochemical company in a multibillion-dollar merger in 2018.

In July 2020, a California appellate court upheld a jury’s verdict that Roundup caused another Bay Area man’s cancer and awarding him $289 million.

A third jury verdict is still on appeal in California’s First Appellate District.

However, other trial courts disagreed, such as in the case of Carson v. Monsanto Co., which is pending in the 11th Circuit Court of Appeals. Unlike other cases alleging Roundup caused plaintiffs to develop non-Hodgkin’s lymphoma, Carson’s lawsuit alleges Roundup caused his malignant fibrous histiocytoma. FIFRA preemption was the pivotal issue in the case.

If the 11th Circuit affirms the preemption, it will create a circuit split, which opens the door for the Supreme Court to weigh in on the issue.

If the company wins preemption and wins at the Supreme Court, the victories could adversely effect the many thousands of cases still pending.

The CDC posted an update suggesting that fully vaccinated people no longer need to wear a mask or physically distance in any setting, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance

The CDC update also indicates that that fully vaccinated people can refrain from testing following a known exposure unless they are residents or employees of a correctional or detention facility or a homeless shelter

Gov. Gavin Newsom suggested in a TV interview Tuesday that California will do away with its mask mandate in favor of “recommendations” around June 15, the state’s target date for ending COVID-19 restrictions on businesses.

In a video clip posted to Twitter, Fox 11 Los Angeles anchor Elex Michaelson asked the governor: “Are we looking at masks after June 15?” Newsom’s response: “No. Only in those settings that are indoor. Only in those massively large settings, where people – from around the world, not just around the country – are convening, and where people are mixing in real dense spaces. He later is said to have walked back this position.

However, a report in Business Insurance says that employers are frustrated and confused by conflicting instructions from other sources.

The Occupational Safety and Health Administration guidelines that lean on U.S. Centers for Disease Control and Prevention guidance still call for indoor mask-wearing, and OSHA is getting ready to release a national emergency temporary standard that experts say could echo the guidelines already in place and come with fines for noncomplying employers.

Another issue is employees who don’t understand why the rules remain when they have been vaccinated, said Erik Eisenmann, Milwaukee-based partner and chair of the labor and employment group at Husch Blackwell LLP, who noted that questions around worker safety protocols and vaccinations are among the most common.

“Those employees protesting (masks) are only going to get louder,” he adds.

Todd B. Logsdon, Louisville, Kentucky-based partner and co-chair of the workplace safety practice group at Fisher & Phillips LLP, said the issue has led to frustration, especially for employers that operate in multiple states.

“Some states have completely lifted all restrictions and other states still have a fair amount of their restrictions in place,” he said, adding that the conflicting messages are leading to morale issues among employees.

Eric Conn, Washington-based founding partner of Conn Maciel Carey LLP, said employers have reported that “the single greatest compliance challenge they have faced during this pandemic has been trying to comply with the impossible patchwork of competing and contradicting mandates from local and state health departments, governors’ executive orders, state (occupational safety and health) plan emergency temporary standards, and so on.”

The Workers’ Compensation Insurance Rating Bureau of California has released its September 1, 2021 Experience Modification Estimator for insurers, agents and brokers to help policyholders understand how payroll and claims experience will affect the computation of their September 1, 2021 and later experience modification (X-Mod).

To use the WCIRB September 1, 2021 Experience Modification Estimator, free of charge, click on the following link: September 1, 2021 Experience Modification Estimator.

By entering policyholder-specific payroll, classification and claims information into the Estimator, users can obtain an estimated X-Mod using approved September 1, 2021 California Workers’ Compensation Experience Rating Plan -1995 values (including expected loss rates, D-Ratios and primary thresholds that vary by employer size).

The Estimator’s spreadsheet format makes it easy for users to view and simply copy and paste data into the application and then view, print or save detailed estimated X-Mod information based on that data.

The September 1, 2021 Estimator was updated with the approved experience rating values after the Insurance Commissioner issued a Decision on the WCIRB’s September 1, 2021 Regulatory Filing and is available in the Learning Center of wcirb.com.

The Estimator is for informational purposes only, and results are approximations based on the information entered. The Estimator does not produce WCIRB-published X-Mods. For more information and helpful tips on how to use the Estimator, go to the WCIRB Experience Modification Estimators page.

The National Council on Compensation Insurance (NCCI) revealed in-depth data on the performance of the US workers compensation system in 2020. Because of job losses and shrinking payrolls during the pandemic recession, net written premium dropped 10% to $42 billion in 2020. However, private insurers posted a profitable calendar year combined ratio of 87, the fourth straight year with a combined ratio below 90 for workers compensation insurance.

“The pandemic was the moment to rise to the challenge, and the workers compensation system did so with integrity,” said Bill Donnell, President and CEO of NCCI. “Our workers compensation system is fulfilling its noble mission to help injured workers.”

NCCI Chief Actuary Donna Glenn said, “The pandemic has been devastating for families, healthcare workers, and the economy. The workers compensation system has been strong and resilient. While net written premium dropped significantly during the recession, other financial metrics remain favorable, at or near historic highs. We have seen fewer COVID-19 claims than originally anticipated.”

Here are other key details included in NCCI’s State of the Line Report on workers compensation insurance:

– – Combined Ratio – The calendar year combined ratio is 87, while the reported accident year combined ratio is 100.
– – Reserves – The reserve position for private insurers remains strong, growing to a redundancy of $14 billion as of Year-End 2020.
– – COVID-19 Claims – Workers hurt by COVID-19 made more than 45,000 claims in 2020 with more than 95% of those claims costing less than $10,000. Carriers reported $260 million in total COVID-19 incurred losses in 2020.
– – Workers Hurt by COVID-19 – Hardest hit were workers in nursing homes, hospitals, clinics, and other healthcare settings along with first responders, which all together account for 75% of the claims.
– – COVID-19 Severity – To date, the costliest 1% of COVID-19 claims account for 60% of COVID-19 loss dollars.
– – Claim Frequency – Excluding COVID-19 claims, claim frequency decreased 7% in 2020, continuing the long-term lost-time claim frequency decline.
– – Claim Severity – While indemnity claim severity is expected to increase 3% in 2020, the average cost of the medical portion of a lost-time claim is expected to change between plus or minus 2%.

The complete workers compensation State of the Line Report and State of the Line Guide are available at ncci.com.

Glenn and other NCCI experts noted a series of issues on the organization’s watchlist, including the uncertainty of how workers with long-haul symptoms will fare and how quickly the recovery will drive an increase in payrolls and workers compensation premiums.