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Tag: 2023 News

Invidior Resolves Suboxone Pricing Scheme For $102.5 Million

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Dozens of U.S. states on Friday announced a $102.5 million settlement with the drugmaker behind Suboxone, the brand name for a critical drug used to treat opioid dependence.

The California Attorney General joined a coalition of 42 attorneys general in announcing a settlement against Invidior Inc. to resolve allegations that the global pharmaceutical company violated state and federal antitrust laws by attempting to maintain market exclusivity over Suboxone.

As part of the settlement, Indivior will pay $102.5 million to the states and be prohibited from engaging in future anticompetitive conduct. Manufactured and marketed by Invidior, Suboxone is a prescription drug approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. California will be receiving over $7.1 million of the multi-state settlement funds.

In addition to requiring Indivior to pay $102.5 million, under the settlement”

– – Indivior must provide the states with information and reasons for any reformulated versions of Suboxone;
– – If pharmaceutical companies file for Food and Drug Administration (FDA) approval of generic versions of Suboxone, Indivior must leave the original product on the market for a limited period to allow doctors and patients to choose which formulation they like better; and
– – If Indivior files an FDA Citizen Petition in an attempt to delay generic competition in the future, it must also submit any data or information underlying that petition to the FDA and the states.

Indivior received FDA approval for Suboxone in 2002, along with exclusive rights to sell the drug for seven years based on representations that it was otherwise unlikely to recover its investment in the drug. Suboxone originally came in tablet form. However, in 2010 – a year after Indivior’s exclusive right to the Suboxone tablet had expired and generic manufacturers were set to enter the market – the company switched from tablet to sublingual film, falsely citing safety concerns. Sublingual film is a dissolving film.

In response, the California Attorney General’s office and fellow attorneys general sued Indivior in 2016, alleging that Indivior engaged in a “product-hopping” scheme to block competition to Suboxone. In such a scheme, pharmaceutical companies try to maintain profits generated via a monopoly by slightly reformulating their product in a way that blocks generic competitors without offering any significant medical or therapeutic advantages to patients.

In April 2021, the Attorney General announced a separate $300 million settlement against Indivior resolving claims that Indivior falsely and aggressively marketed Suboxone, resulting in improper use of state Medicaid funds. California was a part of the team of states that negotiated the settlement which was paid to all 50 states, the District of Columbia, and Puerto Rico.

California is joined by the attorneys general of Alabama, Alaska, Arkansas, Colorado, District of Columbia, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

The settlement agreement has been  submitted to the United States District Court for the Eastern District of Pennsylvania for approval.

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Calif. Supreme Court Limits Public Entity Treble-Damage Awards

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The plaintiff, Jane Doe, was a student at Daniel Pearl Magnet High School, operated by Los Angeles Unified School District). Daniel Garcia was an employee at the school when plaintiff enrolled in the ninth grade for the 2014-2015 academic year.

Garcia began to give special attention to plaintiff. He acted affectionately toward her at school, rubbing her legs and holding her hand. Garcia also sent plaintiff flirtatious and sexual text messages. In November 2014, Garcia sexually assaulted her.Plaintiff later told her parents about Garcia’s actions. Her parents immediately contacted the police. In May 2016, Garcia was arrested and charged with criminal offenses associated with his misconduct.

Before these events occurred, the District allegedly had learned in February 2014 that Garcia – who at the time worked as an aide at a different District school – was involved in a “boyfriend-girlfriend” relationship with another female student, H.M. The District did not fire Garcia upon learning of this relationship, but instead transferred him to the high school where he would encounter plaintiff. The District also created a false report stating that Garcia and H.M. had met and dated before Garcia’s employment with the District commenced.

Plaintiff’s civil action alleged sexual abuse, intentional infliction of emotional distress, and sexual harassment against Garcia. Against the District, plaintiff alleged various negligence theories and a claim for failing to report suspected child abuse. In addition to economic and non-economic damages, plaintiff seeks punitive and exemplary damages from Garcia and an award of up to treble damages under Code Civ. Proc., §340.1(b)(1) from the District.

The District brought a motion to strike the request for up to treble damages pursuant to Government Code section 818, a provision within the Government Claims Act, which specifies in relevant part that “a public entity is not liable for damages awarded under Section 3294 of the Civil Code or other damages imposed primarily for the sake of example and by way of punishing the defendant.”

The superior court denied the motion, concluding that section 340.1(b)(1)’s treble damages provision was intended to be compensatory, not punitive. The Court of Appeal reversed, and determined that section 818 shields public entities from liability for enhanced damages under section 340.1(b)(1). The California Supreme Court agreed with the Court of Appeal and affirmed in the case of Los Angeles Unified School District v Superior Court – S269608 (June 2023).

Since the Court of Appeal ruling in this case, other Courts of Appeal also have determined that enhanced damages under section 340.1(b)(1) are not recoverable against public entities, such as the appellate court inX.M. v. Superior Court (2021) 68 Cal.App.5th 1014, review granted December 1, 2021, S271478 (X.M.). Even more recently, the court in K.M. v. Grossmont Union High School Dist. (2022) 84 Cal.App.5th 717 also concluded that section 818 precludes the application of section 340.1(b)(1) to public entities.

The Opinion noted that section 818 manifests an appreciation that when additional impositions upon a public entity are “primarily for the sake of example and by way of punishing the defendant,” they also create a liability that will be borne not by the immediate wrongdoers but by taxpayers, and may not effectively achieve the goals of retribution and deterrence. For these reasons, such awards should not be permitted, at least without a clear indication by the Legislature that they may be imposed.

In this case the first task was to identify the kinds of damages awards to which section 818 applies. Plaintiff argued that this provision prohibits only the imposition of damages that are “simply and solely punitive.” However the Supreme Court concluded “that section 818 is not so limited, and instead immunizes public entities from damages awarded under Civil Code section 3294 and from other damages that would function, in essence, as an award of punitive or exemplary damages.”

The Opinion then discussed Code of Civil Procedure Section 340.1 which is, for the most part, a statute of limitations intended to expand the ability of victims of childhood sexual abuse to hold to account individuals and entities responsible for their injuries. Since its original enactment in 1986 the statute has been amended on multiple occasions to extend the filing periods for claims alleging childhood sexual assault and revive otherwise time-barred claims.

A 2019 amendment revised section 340.1(b)(1) to provide that in an action seeking damages suffered due to childhood sexual assault, “a person who is sexually assaulted and proves it was as the result of a cover up may recover up to treble damages against a defendant who is found to have covered up the sexual assault of a minor, unless prohibited by another law.”

The Opinion went on to note that “This court and others have frequently characterized treble damages as exemplary or punitive.” And it went on to say that “In adding the treble damages provision to section 340.1 of the Code of Civil Procedure, the Legislature presumably was aware of our prior decisions so characterizing treble damages and understood that the provision could be perceived similarly.”

And similarly it said “the damages authorized under section 340.1(b)(1) have substantial punitive qualities beyond the simple fact that they may go well beyond actual damages. These objective characteristics confirm that enhanced damages under the statute function, in essence, as punitive or exemplary damages by serving ‘to punish past childhood sexual abuse coverups to deter future ones.’ ”

Thus the Justices then determined that in enacting Government Code section 818 the Legislature intended to shield public entities from damages under Civil Code section 340.1(b)(1).

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9th Circuit Limits Application of LC 2810.3 Protections For Farm Workers

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Plaintiffs are farmworkers who harvested strawberries in Santa Barbara County, California in 2016 and 2017. They were hired by three farms that grew the berries: Higuera Farms, Inc., Big F Company, Inc., and La Cuesta Farming Company, Inc. (“the Growers).

The fruit was then turned over to Red Blossom Sales, Inc. and Better Produce, Inc. (“the Marketers”) for distribution. The Marketers held master leases to the farmlands and subleased them to the Growers.

The Marketers were each licensed by the U.S. Department of Agriculture to sell produce as a “commission merchant.” Such a license is required for any entity that buys or sells more than 2,000 pounds of fresh or frozen fruits and vegetables in a given day. The Marketers entered into yearly marketing and sublease agreements with the Growers, which specified that the land would be used only to grow strawberries and that the Marketers retained the exclusive right to sell the strawberries to their retail customers.

Under their agreements, the Growers were responsible for preparing and cultivating the land and for supervising and controlling the workers. The Marketers provided the Growers with packaging materials, communicated with them about the quantity of the strawberries produced, and had the strawberries placed into containers with the Marketers’ labels on them. The Marketers retained the right to enter the lands to conduct inspections of the strawberries.

Red Blossom’s retail customers required Red Blossom to conduct additional food safety compliance inspections, including random food safety audits, and to pay for a third-party audit. The Growers conducted the actual farming operations and supervised the plaintiffs’ work.

The Marketers cooled and sold the berries principally to large retail grocery chains. The Marketers conducted their cooling and distribution operations on premises that were close to but separate from the farms.

In 2018, the Growers stopped paying the workers, so they filed a class action lawsuit against both the Growers and the Marketers, alleging wage and hour violations, as joint employers under California and federal law. The Marketers were allegedly client employers under California Labor Code § 2810.3. While the proceedings were ongoing, the Growers filed for bankruptcy.

The parties agreed to bifurcate the trial, with all issues related to the Growers’ liability to be tried later by a jury. The Marketers’ liability was to be determined first in a bench trial. After a two-day bench trial the district court entered judgment in favor of the Marketers

The Plaintiffs’ appealed only with respect to the Marketers’ liability under Labor Code § 2810.3. The 9th Circuit Court of Appeals affirmed the district court and held that Plaintiffs’ were not performing labor within the Marketers’ “usual course of business” as defined by the statute in the published case of Morales-Garcia V. Better Produce, Inc.  2:18-cv-05118-SVW-JPR (June 2023).

This appeal concerns the application of a California labor law enacted in 2014 to protect workers whose labor has been outsourced to a labor provider. Under the statute, the outsourcing entity, known as a “client employer,” is liable for the laborers’ wages if the laborers’ work is within the outsourcers’ “usual course of business.” Cal. Labor Code § 2810.3(a)(1)-(3), (6).

The California Legislature enacted § 2810.3 to establish a new form of liability for employers, termed “client employers,” who obtain workers from third-party contractors. The legislative history of the statute indicates that client employer liability was created to address the growing business model where a business uses a contractor to supply workers who are supervised and paid by the contractor, but appear to be employees of the business.

Under the statute, Cal. Labor Code § 2810.3(a)(1)-(3), (6), the outsourcing entity, known as a “client employer,” is liable for the laborers’ wages if the laborers’ work is within the outsourcers’ “usual course of business.”

The panel held that the Plaintiffs’ were not performing labor within the Marketers’ “usual course of business” as defined by the statute. That term is defined as “the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.”

“By requiring the work to take place on the premises of the client employer, the legislature required that a client employer exercise some element of control over the place where the laborers work. Given the particular facts of this case, the panel concluded that the plaintiffs’ work took place on the farms where the strawberries were grown, not on the premises or worksites of the Marketers, and that the Marketers are therefore not liable as client employers under § 2810.3“.

Given the particular facts of this case, the 9th Circuit panel concluded that “Appellants’ work took place on the farms where the strawberries were grown, not on the premises or worksites of the Marketers. The Marketers are therefore not liable as client employers under California Labor Code § 2810.3.”

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CPT Codes Silent About Amazing Advancements in MRI Equipment

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Medical fee schedules calculate payments by use of Current Procedural Terminology.(CPT) codes. CPT codes for MRI scans are organized by regions of the body. But there are no CPT code categories for the level of technology of the MRI device itself. And not all MRI scanners are the same. The technology is constantly advancing, as there is seemingly an unending list of newly published scientific studies.

GE Healthcare is the leading manufacturer of MRI equipment, with a market share of over 25%. Siemens Healthineers is the second-leading manufacturer, with a market share of over 20%. Philips Healthcare is the third-leading manufacturer, with a market share of over 15%.

The leading manufacturers of MRI equipment continue to invest in research and development, and they are constantly developing new technologies that improve the quality and accuracy of MRI scans.

Here are some of the advancements in MRI equipment over the last decade:

– – Increased field strength: MRI scanners have become more powerful, with field strengths now reaching up to 7 Tesla. This allows for better image quality, especially in areas with high tissue contrast, such as the brain and spine.
– – Improved gradient coils: Gradient coils are used to create a magnetic field gradient, which is necessary for image acquisition. Improved gradient coils allow for faster scan times and better image resolution.
– – New coil designs: New coil designs allow for improved image quality in specific areas of the body. For example, phased array coils can be used to acquire images of the heart, while diffusion tensor imaging coils can be used to study the brain’s white matter.
– – Software advancements: Software advancements have led to faster scan times, improved image quality, and new imaging techniques. For example, parallel imaging techniques allow for faster scans by acquiring data from fewer receiver coils.
– – Open MRI scanners: Open MRI scanners are designed for patients who are claustrophobic or who cannot lie down flat for an MRI scan. These scanners have a larger opening and do not require patients to lie down flat, which can make the scan more comfortable for some patients.

These advancements have made MRI a more versatile and powerful imaging tool. MRI is now used to diagnose a wide range of medical conditions, including cancer, heart disease, stroke, and neurological disorders.

Here are some specific examples of how these advancements have been used to improve patient care:

– – Increased field strength has allowed for better visualization of tumors and other abnormalities in the brain and spine. This has led to earlier diagnosis and treatment of these conditions, which can improve patient outcomes.
– – Improved gradient coils have allowed for faster scans of the heart. This is important for patients who are at risk for heart disease, as it allows doctors to diagnose and treat heart problems early.
– – New coil designs have allowed for improved imaging of the brain’s white matter. This is important for studying conditions such as multiple sclerosis and Alzheimer’s disease.
– – Software advancements have led to faster scans of the entire body. This is important for patients who need to undergo multiple MRI scans, as it can reduce the amount of time they spend in the scanner.
– – Open MRI scanners have made MRI scans more accessible to patients who are claustrophobic or who cannot lie down flat. This has improved the quality of life for many patients who would otherwise be unable to receive an MRI scan.

7 Tesla MRI systems are typically used for research purposes, but they are becoming increasingly available in clinical settings. However, 7T MRI systems also have some disadvantages, including increased risk of side effects.

There is no MRI system with absolutely zero side effects. However, the highest Tesla system with minimal side effects is likely a 3 Tesla (3T) system. 3T systems are becoming increasingly common in clinical settings, and they offer a number of advantages over lower-field systems, such as improved image quality and resolution.

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U.S. Supreme Court Deals Another Blow to Labor Unions

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The U.S. Supreme Court cleared the way for a concrete company – Glacier Northwest – to pursue damages over a truck driver walkout that left it with damaged products.

Glacier Northwest delivers concrete to customers in Washington State using ready-mix trucks with rotating drums that prevent the concrete from hardening during transit. Concrete is highly perishable, and even concrete in a rotating drum will eventually harden, causing significant damage to the vehicle.

Glacier’s truck drivers are members of the International Brotherhood of Teamsters. After a collective-bargaining agreement between Glacier and the Union expired, the Union called for a work stoppage on a morning it knew the company was in the midst of mixing substantial amounts of concrete, loading batches into ready-mix trucks, and making deliveries.

The Union directed drivers to ignore Glacier’s instructions to finish deliveries in progress. At least 16 drivers who had already set out for deliveries returned with fully loaded trucks. By initiating emergency maneuvers to offload the concrete, Glacier prevented significant damage to its trucks, but all the concrete mixed that day hardened and became useless.

Glacier sued the Union for damages in Washington state court, claiming that the Union intentionally destroyed the company’s concrete and that this conduct amounted to common-law conversion and trespass to chattels. The Union moved to dismiss Glacier’s tort claims on the ground that the National Labor Relations Act (NLRA) preempted them.

The trial court agreed with the Union. After the appellate court reversed, the Washington Supreme Court reinstated the trial court’s decision. In its view, “the NLRA preempts Glacier’s tort claims related to the loss of its concrete product because that loss was incidental to a strike arguably protected by federal law.” Glacier Northwest v International Brotherhood of Teamsters Local Union No. 174 – 198 Wash. 2d 768, 774, 500 P. 3d 119, 123 (2021).

The U.S. Supreme Court granted certiorari to resolve whether the NLRA preempts Glacier’s tort claims alleging that the Union intentionally destroyed its property during a labor dispute. In an 8-1 opinion, with Justice Jackson dissenting, the U.S. Supreme Court concluded that “the NLRA did not preempt Glacier’s tort claims alleging that the Union intentionally destroyed the company’s property during a labor dispute” in the case of Glacier Northwest v International Brotherhood of Teamsters Local Union No. 174. (June 1, 2023).

“The drivers engaged in a sudden cessation of work that put Glacier’s property in foreseeable and imminent danger.The Union knew that concrete is highly perishable and that it can last for only a limited time in a delivery truck’s rotating drum. It also knew that concrete left to harden in a truck’s drum causes significant damage to the truck. The Union nevertheless coordinated with truck drivers to initiate the strike when Glacier was in the midst of batching large quantities of concrete and delivering it to customers. Predictably, the company’s concrete was destroyed as a result. And though Glacier’s swift action saved its trucks in the end, the risk of harm to its equipment was both foreseeable and serious.”

“The Union failed to ‘take reasonable precautions to protect’ against this foreseeable and imminent danger. Bethany Medical Center, 328 N. L. R. B., at 1094. It could have initiated the strike before Glacier’s trucks were full of wet concrete – say, by instructing drivers to refuse to load their trucks in the first place.”

The unions argument oversimplified the NLRA. “As we explained, the right to strike is limited by the requirement that workers ‘take reasonable precautions to protect the employer’s plant, equipment, or products from foreseeable imminent danger due to sudden cessation of work.‘ Bethany Medical Center, 328 N. L. R. B., at 1094. So the mere fact that the drivers engaged in a concerted stoppage ofwork to support their economic demands does not end the analysis.”

“Thus, accepting the complaint’s allegations as true, the Union did not take reasonable precautions to protect Glacier’s property from imminent danger resulting from the drivers’ sudden cessation of work. The state court thus erred in dismissing Glacier’s tort claims as preempted on the pleadings.”

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Trilogy of WCAB Decisions Find Valley Fever Presumptively AOE-COE

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Coccidioidomycosis, commonly known as Valley Fever, is a fungal infection caused by the fungus Coccidioides. It primarily affects the lungs but can also spread to other parts of the body, such as the bones, skin, and central nervous system.

Coccidioides fungi are found in soil in certain arid and semiarid regions, particularly in the southwestern United States, Mexico, and parts of Central and South America. When the soil is disturbed, such as through construction, farming, or wind, the fungal spores can become airborne and be inhaled by humans and animals.

Ernest Sanchez was a correctional officer for the State of California. He filed a claim for injury to the respiratory system and musculoskeletal system in the form of coccidioidomycosis. The WCJ issued a Findings and Order of March 30, 2021 finding that he did not sustain the injury as alleged.

The WCAB granted reconsideration, rescinded the WCJ’s decision, and return this matter to the trial level for further development of the medical record and analysis in order for the parties, the reporting physician(s), and the WCJ to consider the applicability of Labor Code section 3212.10 in the panel decision of Sanchez-I v State of California – ADJ12021219 (June 2021).

After further proceedings, the WCJ again issued another Findings and Order on March 3, 2023 finding that the valley fever was again not industrial. And again the WCAB panel granted reconsideration, rescinded the WCJ’s decision and issued a new decision reflecting that applicant sustained presumptive industrial injury in the form of coccidioidomycosis in Sanchez-II v State of California ADJ12021219 (May 2023)

The panel cited Labor Code section 3212.10 as authority for this decision which states: “In the case of a peace officer of the Department of Corrections who has custodial or supervisory duties of inmates or parolees … the term “injury” as used in this division includes … pneumonia, … that develops or manifests itself during a period in which any peace officer covered under this section is in the service of the department or unit.” And that “the … pneumonia … so developing or manifesting itself shall be presumed to arise out of and in the course of employment. “

The panel then cited Lee v. State of California (2017) 2017 Cal. Wrk. Comp. P.D. LEXIS 543 [Appeals Bd. panel]; and Thomas v. State of California (2021) 2021 Cal. Wrk. Comp. P.D. LEXIS 62 [Appeals Bd. panel]),as “previous cases in which valley fever has been found to constitute pneumonia.”

In Lee v State of California the panel noted that “The statutory language in section 3212.10 does not identify or designate a specific type of pneumonia nor does it limit the applicability of the presumption to a specific type of pneumonia. If the Legislature had intended to limit the presumption, it would have done so.”

It then quoted from the AME report from AME Gerald Markovitz, M.D. that stated “”Mr. Lee presented today for AME evaluation in the field of internal medicine. He developed a case of primary pulmonary coccidiomycosis [coccidioidomycosis] (Valley Fever). There is a Presumption for pneumonias in Correctional Officers and he developed a pneumonia, so there is no reason to deny industrial responsibility for his Valley Fever.” From this reporting the panel commenced this trilogy of cases equating valley fever as within the definition of “pneumonia” for purposes of the presumption in Labor Code 3212.10 .

In Thomas v State of California, the second case of the trilogy, PQME Paul J. Grodan, M.D., testified that valley fever constitutes pneumonia. “Therefore, applicant had pneumonia that developed or manifested itself during his service in a custodial role at CDCR. The burden thus shifted to defendant to show that applicant did not develop industrial pneumonia.”

Turning then to Sanchez II v State of California, the third case in the trilogy, after citing Lee and Thomas as authority for application of the “pneumonia” presumption in valley fever cases, the panel noted that the burden of proof shifted to the employer.

The record was developed with two short supplemental reports from qualified medical evaluator Jeffery M. Freesemann, M.D. “However, Dr. Freesemann never states, let alone provides substantial medical evidence, that applicant’s valley fever was probably not contracted at work. Rather, he states that the cause of the injury is “impossible to determine.” Defendant thus did not meet its burden of overcoming the statutory presumption.”

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DHS Ends Form I-9 Requirement Flexibility on July 31, 2023

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In 1986, Congress reformed U.S. immigration laws by passing the Immigration Reform and Control Act of 1986 (IRCA). IRCA prompted the creation of the Form I-9, Employment Eligibility Verification, which was designated as the means of documenting that the employer verified an employee’s identity and U.S. employment authorization.

Since the Form I-9 became a requirement for all U.S. employers hiring new employees, one key rule has remained unchanged. Within three business days after the first day of employment employers must “physically examine” the documentation presented by new employees from the Lists of Acceptable Documents to ensure that the presented documentation appears to be genuine and to relate to the individual who presents them.

In March 2020, ICE announced that it would defer the requirement that employers review employees’ identity and employment authorization documents in the employees’ physical presence, instead allowing that to occur remotely, with the expectation that physical inspection would occur within three business days after normal operations resumed.

In follow-on guidance, ICE noted that employers could continue to implement the flexibilities until affected employees undertake non-remote employment on a regular, consistent, or predictable basis, or the extension of the flexibilities related to such requirements is terminated, whichever is earlier.

In October 2022, DHS and ICE announced that the flexibilities would be extended until July 31, 2023.  

However, on May 4, 2023 the U.S. Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) announced that employers will have 30 days to reach compliance with Form I-9 requirements after the COVID-19 flexibilities sunset on July 31, 2023.

As noted in the March 2020 announcement, under the flexibilities, employers with employees taking physical proximity precautions due to the COVID-19 pandemic were allowed to temporarily defer physical examination of employees’ identity and employment authorization documents. Instead, employers could examine the employees’ documents remotely (e.g., over video link, fax, or email) and enter “COVID-19” as the reason for the physical examination delay in the Section 2 Additional Information field when physical examination took place in the future.

Once the employees’ documents were physically examined, the employer would add “documents physically examined” with the date of examination to Section 2 Additional Information field on the Form I-9, or in Section 3, as appropriate.

However, on Aug. 18, 2022, DHS issued a proposed rule that would allow alternative procedures for the examination of identity and employment eligibility documents. The public comment period closed on Oct. 17, 2022. DHS is currently reviewing public comments and plans to issue a final rule later this year.

This proposed rule would create a framework under which the Secretary of Homeland Security could authorize alternative options for document examination procedures with respect to some or all employers.

Such procedures could be implemented as part of a pilot program, or upon the Secretary’s determination that such procedures offer an equivalent level of security, or as a temporary measure to address a public health emergency declared by the Secretary of Health and Human Services pursuant to Section 319 of the Public Health Service Act, or a national emergency declared by the President pursuant to Sections 201 and 301 of the National Emergencies Act.

This proposed rule would allow employers (or agents acting on an employer’s behalf) optional alternatives for examining the documentation presented by individuals seeking to establish identity and employment authorization for purposes of completing the Form I-9.

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4th Largest Drug Distributor Suspended From Controlled Substance Sales

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Morris & Dickson Co., LLC is a pharmaceutical wholesaler based in Shreveport, Louisiana. It is one of the largest privately held wholesale drug distributors in the country. The company was founded in 1841 by Alexander Dickson and William Morris, and it has been in continuous operation for over 180 years.

It has since become the nation’s fourth-largest wholesale drug distributor, with $4 billion a year in revenue and nearly 600 employees serving pharmacies and hospitals in 29 states.

In October 2017, DEA became aware of the high-volume sales of Oxycodone and Hydrocodone from Morris and Dickson Company to five of the top ten purchasing pharmacies within the state of Louisiana. DEA records indicated that Morris and Dickson Company had not filed any suspicious order reports on any of the pharmacies in question in Louisiana.

A review of the purchases made by these high-volume independent pharmacies showed that these pharmacies were purchasing quantities which were not indicative of the pharmaceutical market. Not only were numerous “independent” retail pharmacies purchasing more Oxycodone and Hydrocodone than the largest chain pharmacies operating within the state, they were purchasing more narcotics than several of the largest chain pharmacies combined within the same zip code. In some instances, DEA noted these “independent” pharmacies were purchasing more than ten times the amount of narcotics the average Louisiana pharmacy purchased per month.

While Morris & Dickson wasn’t the only drug distributor who the DEA accused of fueling the opioid crisis, it was unique in its willingness to challenge those accusations in the DEA’s administrative court. In a scathing recommendation in 2019, Administrative Law Judge Charles W. Dorman said Morris & Dickson’s argument that it has changed its ways was too little, too late.

This month DEA announced it has suspended the DEA Certificate of Registration as a drug distributor pursuant to Title 21, United States Code, Sections 823 and 824. The DEA’s investigation of Morris and Dickson Company determined that the continued registration of this company constitutes a substantial likelihood of imminent danger to public health and safety. This action only applies to the distribution of controlled substances and will not affect non-controlled pharmaceutical drugs distributed by the company.

Morris and Dickson Company received written notice of the factual and legal basis for this action. In addition, they will be given the opportunity for an administrative hearing within the next 60 days. After the hearing, the DEA Acting Administrator will make a final decision on whether Morris and Dickson Company’s registration should be permanently revoked.

DEA Administrator Anne Milgram said in the 68-page order that Morris & Dickson failed to accept full responsibility for its past actions. Milgram specifically cited testimony of then-president Paul Dickson Sr. in 2019 that the company’s compliance program was “dang good” and he didn’t think a “single person has gotten hurt by (their) drugs.”

“Those statements from the president of a family-owned and operated company so strongly miss the point of the requirements of a DEA registrant,” she wrote. “Its acceptance of responsibility did not prove that it or its principals understand the full extent of their wrongdoing … and the potential harm it caused.”

In a statement, the company said it has invested millions of dollars over the past few years to revamp its compliance systems and appeared to hold out hope for a settlement.

“Morris & Dickson is grateful to the DEA administrator for delaying the effective date of the order to allow time to settle these old issues,” it said. “We remain confident we can achieve an outcome that safeguards the supply chain for all of our healthcare partners and the communities they serve.”

The DEA has been highly criticized in the delay it has taken to conclude this investigation.

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AI Used to Discover New Antibiotic for Deadly Superbug

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Scientists used artificial intelligence to identify a new antibiotic that might be useful to fight a deadly drug-resistant bacteria commonly found in hospitals and medical offices. The study has just been published in the journal Nature Chemical Biology. The newly discovered drug – Abaucin is a narrow-spectrum antibiotic that is effective against Acinetobacter baumannii, a superbug that is resistant to many antibiotics. Abaucin works by inhibiting the transport of lipoproteins, which are essential for the growth and survival of bacteria. It has now also been shown to be safe in animal studies

Abaucin was developed by a team of researchers led by James J. Collins at the MIT Jameel Clinic and Jonathan Stokes at McMaster University. The team used an artificial intelligence algorithm to screen thousands of compounds for potential antibiotic activity. Abaucin was one of the compounds that was identified by the algorithm.

Abaucin works by inhibiting lipoprotein transport, which is essential for bacterial growth. It is a narrow-spectrum antibiotic, which means that it is only effective against a few types of bacteria. This makes it less likely to cause resistance to develop. Abaucin is still in the early stages of development, but it has the potential to be a valuable new tool for treating infections caused by Acinetobacter baumannii.

“There’s a lot of trepidation around AI and I genuinely understand it,” said Jonathan Stokes, lead author on the paper and an assistant professor of biomedicine and biochemistry at at McMaster University in Ontario, Canada. “When I think about AI in general, I think of these models as things that are just going to help us do the thing we’re going to do better.“

According to a report by USA Today, Stokes teamed up with researchers from the Broad Institute of MIT and Harvard to screen for potential antibiotics to use on Acinetobacter baumannii, a superbug that can cause infections in the blood, urinary tract and lungs. This bacteria usually invades hospitals and healthcare settings, infecting vulnerable patients on breathing machines, in intensive care units and undergoing operations.

This type of bacteria, resistant to the potent antibiotic carbapenem, infected 8,500 in hospitals and killed 700 in 2017, according to the Centers for Disease Control and Prevention.

Stokes said the lab team developed AI models to predict which ones would have the highest likelihood of antimicrobial activity, narrowing the field to 240 drugs or active ingredients. Researchers then narrowed the field again through testing before discovering a molecule RS102895, renamed abaucin, that appeared to be potent against the superbug.

“It’s important to remember right when we’re trying to develop a drug, it doesn’t just have to kill the bacterium,” Stokes said. “It also has to be well tolerated in humans and it has to get to the infection site and stay at the infection site long enough to elicit an effect.”

Researchers said they can screen a much larger volume of potential drugs by using machine-learning techniques. The study said while existing high-throughput screening can evaluate a few million drugs or chemical ingredients at once, algorithms developed from machine learning can assess “hundreds of millions to billions” of drug molecules.

There are other examples of AI being used to develop new drugs:

– –  Exscientia is a pharmaceutical company that uses AI to design new drugs. The company has developed several drugs that are now in clinical trials, including a drug for Alzheimer’s disease and a drug for cancer.
– –  Insilico Medicine is another pharmaceutical company that uses AI to develop new drugs. The company has developed several drugs that are now in preclinical trials, including a drug for Parkinson’s disease and a drug for HIV.
– –  Atomwise is a company that uses AI to design new drugs for infectious diseases. It has developed several drugs that are now in preclinical trials, including a drug for malaria and a drug for tuberculosis.
– –  BenevolentAI is a company that uses AI to develop new drugs for rare diseases. It has developed several drugs that are also now in preclinical trials, including a drug for Duchenne muscular dystrophy and a drug for cystic fibrosis.

These are just a few examples of the many companies that are using AI to develop new drugs. AI has the potential to revolutionize the drug discovery process, and it could help to develop new treatments for a wide range of diseases.

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California Supreme Court Expands Employee Whistleblower Protections

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A.C.R. worked as a bartender at Kolla’s, Inc., a nightclub in Orange County. In 2014, A.C.R. complained to Gonzalo Estrada that she had not been paid wages owed for her previous three shifts of work. Estrada responded by threatening to report A.C.R. to immigration authorities, terminating her employment, and telling her never to return to the club.

In June 2014, A.C.R. filed a complaint against Estrada and Kolla’s with Department of Labor Relations, Division of Labor Standards Enforcement (DLSE), which opened an investigation.

After determining that Estrada’s immigration-based threats and termination of A.C.R. violated California law, DLSE notified Estrada and Kolla’s of proposed remedies, including payment of lost wages to A.C.R., reinstatement of A.C.R.’s previous position, and payment of civil penalties to A.C.R. and DLSE. After Estrada and Kolla’s declined to accept DLSE’s proposed remedies, the Labor Commissioner sued them for violations of the Labor Code, including retaliation in violation of section 1102.5(b).

The trial court entered an order granting in part the Labor Commissioner’s application for default judgment but ruled against the Labor Commissioner on the section 1102.5(b) claim. The court held that the Labor Commissioner did not state a valid cause of action under section 1102.5(b) because A.C.R. reported her complaints to her employer rather than a government agency. The Labor Commissioner appealed.

The Court of Appeal held that the trial court had relied on an outdated version of section 1102.5(b) and that the current version of the law protects disclosures made to one’s employer. The Court of Appeal nonetheless affirmed the trial court’s judgment on the section 1102.5(b) claim, concluding that a private employee’s report of unlawful activity directly to his or her wrongdoing employer is not a protected disclosure under section 1102.5(b).

The Court of Appeal explained that Estrada, as the owner of the nightclub, “was at least aware of – if not responsible for – the non-payment of wages” and that an ” ’employee’s report to the employee’s supervisor about the supervisor’s own wrongdoing is not a “disclosure” and is not protected whistleblowing activity, because the employer already knows about his or her wrongdoing.’ ”

The California Supreme Court reversed and remanded, and held that a protected disclosure under section 1102.5(b) encompasses reports or complaints of a violation made to an employer or agency even if the recipient already knows of the violation. It further concluded that complainant A.C.R. made a disclosure protected by section 1102.5(b) in the case of P. ex rel. Garcia-Brower v. Kolla’s, Inc. – S269456. (May 2023).

The Legislature enacted section 1102.5 in 1984 to provide whistleblowers with protection from employer retaliation. In 2003, in the wake of a “recent spate of false business reports and other illegal activity by Enron, WorldCom and others,” the Legislature amended section 1102.5(b) to include several additional employee protections.

In 2013, the Legislature again amended section 1102.5(b), expanding its protections to include an employee’s disclosure made “to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.”

The Supreme Court has repeatedly held that section 1102.5(b) “reflects the broad public policy interest in encouraging workplace whistle-blowers to report unlawful acts without fearing retaliation.” (Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 77 (Green); Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, 709 (Lawson); Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 287.)

It is undisputed that the employer’s conduct was prohibited by the Labor Code. The question here is whether a report of unlawful activities made to an employer or agency that already knew about the violation was a protected “disclosure” within the meaning of section 1102.5(b).

The Supreme Court concluded that it was, noting that “Applying the Court of Appeal’s reasoning here would result in outcomes contrary to the Legislature’s purpose.”

And it disapproved Mize-Kurzman v. Marin Community College Dist., 202 Cal.App.4th 832 to the extent it is inconsistent with its opinion. Mize-Kurzman rested on federal precedent subsequently abrogated by Congress. In 2012, Congress passed the Whistleblower Protection Enhancement Act of 2012 (WPEA) (Pub.L. No. 112-199 (Nov. 27, 2012) 126 Stat. 1465), an update to the Whistleblower Protection Act (WPA), that “clarif[ied] the broad meaning” of disclosure to correct Federal Circuit precedent that had “wrongly accorded a narrow definition to the type of disclosure that qualifies for whistleblower protection.”

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