Tag: 2022 News

On March 12, 2020, John Rogers filed a putative class action in the Superior Court of the City and County of San Francisco alleging that Lyft misclassified its drivers as independent contractors, rather than as employees. The complaint asserted a single claim for failure to provide paid sick leave under Labor Code section 246. He then filed an ex parte application for an emergency preliminary injunction seeking to enjoin Lyft from classifying its drivers as independent contractors.

The hearing on the ex parte application was set for March 19, 2020. However, on that day, Lyft removed the case to federal court under the Class Action Fairness Act of 2005 (28 U.S.C. § 1332(d)). Plaintiffs submitted their emergency preliminary injunction request to the Federal District Court for the Northern District of California that same day. Lyft then filed a motion in the district court seeking to compel individual arbitration of Rogers’ claims.

The district court granted in part and denied in part Lyft’s motion to compel arbitration. (Rogers v. Lyft, Inc. (2020) 452 F.Supp. 3d 904, 909)  Finally, the court determined that it lacked jurisdiction as to plaintiffs’ claim for public injunctive relief (id. at p. 919), remanding the case back to the superior court to resolve whether the claim actually sought a private injunction, which would be subject to arbitration, or a public injunction, which would be exempt from arbitration.

Upon remand, plaintiffs filed another ex parte application for an emergency preliminary public injunction in the superior court, seeking to enjoin Lyft from “misclassifying its drivers in California as independent contractors and thereby denying these workers their rights under the Labor Code” and under two municipal ordinances pertaining to sick leave.

On remand the superior court granted Lyft’s motion to compel arbitration, and denied the plaintiff’s request for an injunction after concluding that the request was for a public injunction and that a denial of the injunction would not cause plaintiffs to suffer irreparable harm. Two days later, plaintiffs filed their notice of appeal of both of these rulings. The California Court of Appeal dismissed the appeal of both issues in the unpublished case of Rogers v Lyft – A160182 (July 2022).

While this appeal was pending, Proposition 22 passed on November 3, 2020, abrogating Assembly Bill No. 5. In doing so, Proposition 22 declared “app-based drivers” to be independent contractors – not employees – if the rideshare company (in this case, Lyft) provides those drivers with specific wage and hour protections. (See Bus. & Prof. Code. §§ 7451, 7453.) Proposition 22 took effect on December 16, 2020.

Proposition 22 was declared unconstitutional by a different trial court judge last year, but an appeal is pending.

In their opening brief, plaintiffs purport to appeal from the superior court’s “grant of Lyft’s Petition to Compel Arbitration,” which they assert “is appealable pursuant to [Code of Civil Procedure] section 1294 [subdivision](a).” The Court of appeal said that “this assertion is manifestly incorrect.”

Civil Code of Procedure section 1294, subdivision (a) provides: “An aggrieved party may appeal from . . . [a]n order dismissing or denyinga petition to compel arbitration.” (Italics added.) Here, the superior court granted Lyft’s petition to compel arbitration.

In any event, in their reply brief plaintiffs change course, expressly stating that they are not appealing from the order compelling arbitration. Accordingly, to the extent plaintiffs purport to appeal from the superior court’s order granting the motion to compel arbitration, the appeal on this issue was therefore dismissed.

In their opening brief, plaintiffs expressly waive any argument as to “whether an injunction remains appropriate following the passage of Proposition 22,” acknowledging that “a decision on the applicability of Proposition 22 would need to be addressed by the Superior Court in the first instance.” However, they assert that this case “presents a live case and controversy” because Lyft drivers would have received paid sick leave during the COVID-19 pandemic if the injunction had issued, and a reversal here would entitle them to this incidental relief. On this basis, they contend that they “still have a live claim for incidental relief.” Alternatively, they argue that this appeal should be heard because it “presents an important question of state law.”

Lyft contends that the only remaining issue in this appeal, the denial of plaintiffs’ request for an emergency preliminary public injunction ordering Lyft to reclassify its drivers as employees, should be dismissed as moot because plaintiffs “have expressly abandoned the preliminary injunction request that is the entire basis for this interlocutory appeal.”

The court of appeal agreed with Lyft that the appeal from the denial of the emergency preliminary injunction is moot and should be dismissed.

Shannon Liss-Riordan, an attorney for the Lyft drivers, said they are “disappointed in the decision and are considering our options, including petitioning the California Supreme Court for review.”

Amazon inaugurated its migration into the health care industry some time ago when it launched an online pharmacy and telemedicine service almost everywhere in the United States.

And then last year Amazon announced the expansion of Amazon Care, which dispenses “high-quality medical care and advice’ 24 hours a day, 365 days a year, with a goal of delivering the service through companies of all sizes to their employees nationwide.

Taking this initiative even further, this week Amazon and primary-care provider One Medical announced that they have entered into a definitive merger agreement under which Amazon will acquire One Medical.

One Medical says it is is a human-centered, technology-powered national primary care organization on a mission to make quality care more affordable, accessible, and enjoyable through a seamless combination of in-person, digital, and virtual care services that are convenient to where people work, shop, and live.

Amazon still makes most of its revenue from orders placed through its online stores, and most of its profit from its cloud computing arm. Both of those businesses were built almost entirely in house. But Amazon’s largest acquisitions show the company is willing to buy growth in markets that are adjacent to its core competencies.

Before One Medical, Amazon’s two largest acquisitions ever were its $13.7 billion purchase of grocery chain Whole Foods in 2017 and its $8.45 billion purchase of film and television distributor MGM Studios last year.

MGM and Whole Foods deals also tie back to the company’s Prime subscription offering, which gives it a steady stream of recurring revenue from millions of consumers and encourages loyalty. One Medical could follow that same template. Amazon has already added pharmacy benefits to Prime.

Amazon has dabbled in healthcare for several years. Amazon bought PillPack in 2018 for $750 million, then rolled out its own online pharmacy. It also launched Amazon Care, a service that has both telehealth and in-person offerings, first for its own employees before opening it up to other employers last year. The offering competes with One Medical.

Amazon will acquire One Medical for $18 per share in an all-cash transaction valued at approximately $3.9 billion, including One Medical’s net debt. Completion of the transaction is subject to customary closing conditions, including approval by One Medical’s shareholders and regulatory approval. On completion, Amir Dan Rubin will remain as CEO of One Medical.

One Medical is a U.S. national human-centered and technology-powered primary care organization with seamless digital health and inviting in-office care, convenient to where people work, shop, live, and click. One Medical’s vision is to delight millions of members with better health and better care while reducing costs, within a better team environment. One Medical’s mission is to transform health care for all through a human-centered, technology-powered model. Headquartered in San Francisco, 1Life Healthcare, Inc. is the administrative and managerial services company for the affiliated One Medical physician-owned professional corporations that deliver medical services in-office and virtually. 1Life and the One Medical entities do business under the “One Medical” brand.

Consumer Watchdog filed its 834 page Opening Brief in a California Public Records Act (“CPRA”) lawsuit against Insurance Commissioner Ricardo Lara and the Department of Insurance. The CPRA suit alleges that Lara and the Department of Insurance failed to search for and produce records related to a pay-to-play scandal involving insurance companies with business pending before the agency.

The trial will in this case is scheduled to be held on September 2, 2022.

As explained in the Opening Brief, though Commissioner Lara had previously pledged not to accept insurance company contributions, in 2019 individuals linked to workers’ compensation insurer Applied Underwriters and another company, IHC, contributed $53,400 to Lara’s 2022 re-election campaign fund.  Some of the contributions were made in the name of relatives of insurance company executives, allegedly to hide their true source.

Shortly after, Applied’s president, Steven Menzies, requested that Commissioner Lara intervene in proceedings at the Department involving Applied.  Lara did so, overriding Administrative Law Judge orders in at least four proceedings.  Menzies also stood to gain if Commissioner Lara approved his purchase of Applied’s subsidiary, California Insurance Company (“CIC”).

In the wake of statewide news reports Commissioner Lara apologized and promised “transparency.”

Consumer Watchdog then filed two CPRA requests with the Department seeking communications and meeting records involving 13 named individuals and any other individuals “employed by or representing” the insurance companies involved in the scandal.

Several records the Department ultimately produced suggest that Menzies and others improperly discussed the sale of CIC with Commissioner Lara and Department staff simultaneous to campaign fundraising. The Department refused to produce other records and failed to provide an adequate explanation for withholding them.

Consumer Watchdog then filed a public records lawsuit (Consumer Watchdog v. Ricardo Lara et al. Case No. 20STCP00664) asking the court to require the Department to search for and produce all responsive records.

Following the filing of the lawsuit, Consumer Watchdog says that discovery responses from the Department demonstrated that the Department failed to search for records related to at least four individuals that the Department knew were “employed by or representing” Applied and IHC.

These individuals include a former New Mexico insurance regulator who left office following a different pay-to-play scandal, an insurance executive involved in the sale of CIC, and two former California legislators-turned lobbyists, Rusty Areias and Fabian Nunez.

As noted in the Opening Brief Consumer Watchdog “also learned through discovery that Respondents not only refused to search for responsive documents, but Respondents also withheld 96 communications and redacted six others, claiming they are “absolutely protected” under section 6254, subdivision (d), and Insurance Code section 735.5. Yet they “failed to meet their burden to establish that those provisions apply to the records.”

” Respondents have a duty under the CPRA to establish search protocols and adopt search terms adequate to identify responsive records. Respondents violated this duty. . . . An agency fails to conduct an adequate search when it fails to pursue leads in response to a records request that, if followed, could reasonably lead to further responsive records.”

Therefore, they request “that the Court order Respondents to (1) conduct a new search for and produce responsive records of meetings and communications with ‘any individuals employed by or representing’ the companies, and (2) produce the 96 withheld and six redacted records in an unredacted form.”

“Petitioner previously offered to settle the lawsuit if Respondents would simply conduct the required search. Respondents refused.”

The Department of Justice announced criminal charges against 36 defendants in 13 federal districts across the United States for more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes.

The nationwide coordinated law enforcement action includes criminal charges against a telemedicine company executive, owners and executives of clinical laboratories, durable medical equipment companies, marketing organizations, and medical professionals.

Additionally, the Centers for Medicare & Medicaid Services (CMS), Center for Program Integrity (CPI) announced today that it took adverse administrative actions against 52 providers involved in similar schemes. In connection with the enforcement action, the department seized over $8 million in cash, luxury vehicles, and other fraud proceeds.

The coordinated federal investigations primarily targeted alleged schemes involving the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies. Telemedicine schemes account for more than $1 billion of the total alleged intended losses associated with the enforcement action.

These charges include some of the first prosecutions in the nation related to fraudulent cardiovascular genetic testing, a burgeoning scheme. As alleged in court documents, medical professionals made referrals for expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment. For example, cardiovascular genetic testing was not a method of diagnosing whether an individual presently had a cardiac condition and was not approved by Medicare for use as a general screening test for indicating an increased risk of developing cardiovascular conditions in the future.

One particular case charged involved the operator of several clinical laboratories, who was charged in connection with a scheme to pay over $16 million in kickbacks to marketers who, in turn, paid kickbacks to telemedicine companies and call centers in exchange for doctors’ orders. As alleged in court documents, orders for cardiovascular and cancer genetic testing were used by the defendant and others to submit over $174 million in false and fraudulent claims to Medicare – but the results of the testing were not used in treatment of patients. The defendant allegedly laundered the proceeds of the fraudulent scheme through a complex network of bank accounts and entities, including to purchase luxury vehicles, a yacht, and real estate. The indictment seeks forfeiture of over $7 million in United States currency, three properties, the yacht, and a Tesla and other vehicles.  

Some of the defendants charged in this enforcement action allegedly controlled a telemarketing network, based both domestically and overseas, that lured thousands of elderly and/or disabled patients into a criminal scheme. The owners of marketing organizations allegedly had telemarketers use deceptive techniques to induce Medicare beneficiaries to agree to cardiovascular genetic testing, and other genetic testing and equipment.

The charges allege that the telemedicine companies arranged for medical professionals to order these expensive genetic tests and durable medical equipment regardless of whether the patients needed them, and that they were ordered without any patient interaction or with only a brief telephonic conversation. Often, these test results or durable medical equipment were not provided to the patients or were worthless to their primary care doctors.

This announcement builds on prior telemedicine enforcement actions involving over $8 billion in fraud, including 2019’s Operation Brace Yourself, 2019’s Operation Double Helix, 2020’s Operation Rubber Stamp, and the telemedicine component of the 2021 National Health Care Fraud Enforcement Action. Specifically, the Operation Brace Yourself Telemedicine and Durable Medical Equipment Takedown alone resulted in an estimated cost avoidance of more than $1.9 billion in the amount paid by Medicare for orthotic braces in the 20 months following that enforcement action.

Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 16 strike forces operating in 27 districts, has charged more than 5,000 defendants who collectively billed federal health care programs and private insurers approximately $24.7 billion.

EEOC has updated a number of Q&As on July 12, 2022, including former answers A.6 and A.7 which pertain to testing employees for COVID.

EEOC’s assessment at the outset of the pandemic was that the ADA standard for conducting medical examinations was, at that time, always met for employers to conduct worksite COVID-19 viral screening testing.

With the revision of Q&A A.6, below, on July 12, 2022, EEOC makes clear that going forward employers will need to assess whether current pandemic circumstances and individual workplace circumstances justify viral screening testing of employees to prevent workplace transmission of COVID-19.

A.6. offers employers possible factors to consider in making this assessment, including community transmission levels and types of contacts between employees and others in the workplace. This change is not meant to suggest that such testing is or is not warranted; rather, the revised Q&A acknowledges that evolving pandemic circumstances will require an individualized assessment by employers to determine whether such testing is warranted consistent with the requirements of the ADA.

Q&A A.6 provides an answer to the question “Under the ADA, may an employer, as a mandatory screening measure, administer a COVID-19 viral test (a test to detect the presence of the COVID-19 virus) when evaluating an employee’s initial or continued presence in the workplace? (Updated 7/12/22)”

Yes, if the employer can show it is job-related and consistent with business necessity the “business necessity” standard based on relevant facts.

The answer goes on to state that “Possible considerations in making the “business necessity” assessment may include the level of community transmission, the vaccination status of employees, the accuracy and speed of processing for different types of COVID-19 viral tests, the degree to which breakthrough infections are possible for employees who are “up to date” on vaccinations, the ease of transmissibility of the current variant(s), the possible severity of illness from the current variant, what types of contacts employees may have with others in the workplace or elsewhere that they are required to work (e.g., working with medically vulnerable individuals), and the potential impact on operations if an employee enters the workplace with COVID-19. “

“In making these assessments, employers should check the latest CDC guidance (and any other relevant sources) to determine whether screening testing is appropriate for these employees.”

And Q&A A.7 is also relevant to this topic. “Under the ADA, may an employer require antibody testing before permitting employees to re-enter the workplace? (Updated 7/12/22)”

“No. An antibody test, as a medical examination under the ADA, must be job-related and consistent with business necessity. As of July 2022, CDC guidance explains that antibody testing may not show whether an employee has a current infection, nor establish that an employee is immune to infection; as a result, it should not be used to determine whether an employee may enter the workplace”.

“Based on this CDC guidance, at this time such testing does not meet the ADA’s “business necessity” standard for medical examinations or inquiries for employees. Therefore, requiring antibody testing before allowing employees to re-enter the workplace is not allowed under the ADA. An antibody test is different from a test to determine if someone has evidence of infection with SARS-CoV-2 or has COVID-19 (i.e., a viral test).”