Tag: 2023 News

Courthouse News reports that the former chief financial officer of the defunct Girardi & Keese California personal injury law firm lost his bid to be released from jail while fighting charges he stole $10 million from the firm in a “side fraud” scheme separate from the estimated $100 million disgraced attorney Thomas Girardi is accused to have siphoned off from his clients’ trust funds.

Tom Girardi, a titan of the California plaintiffs bar, is believed to have used his client settlement funds as his own personal piggy bank for years. The 83-year-old lawyer is suffering from Alzheimer’s and his firm went bankrupt two years ago as reports of his malfeasance came out.

Last year, a Chicago law firm accused singer and “Real Housewives of Beverly Hills” star Erika Jayne of acting as a “frontwoman” for her then-husband, Girardi. The court filing called Girardi’s now-shuttered law firm “the largest criminal racketeering enterprise in the history of plaintiffs’ law.”

U.S. District Judge Dale Fischer on Monday rejected the arguments by a lawyer for Christopher Kamon that his client wanted a “fresh start” and that there are perfectly innocent explanations why he liquidated his assets in the U.S., transferred millions of dollars to overseas bank accounts, and bought a $2.4 million home in the Bahamas.

“The government has proven that he’s a flight risk,” Fischer said at the hearing in LA federal court. “The transfer of funds is extremely suspicious in my view.”

Kamon, 49, has been in jail since his arrest Nov. 5 at the airport in Baltimore when he returned from the Bahamas. Prosecutors with the U.S. Attorney’s Office in LA say that Kamon planned to leave the county, change his name and hide, citing an unidentified witness who they say was an unwitting co-schemer who believed the accountant had authority to use the law firm’s funds for his private pursuits.

Prosecutors say Kamon, who worked at the Girardi Keese accounting department for almost two decades, used falsified invoices, fraudulent transfers and cash kickbacks from the firm’s accounts to steal millions of dollars. They also claim he improperly used the firm’s funds for his personal expenses, including home renovations, travel around the world on private planes and and tens of thousands a month for “female companionship.”

It was highly doubtful that he was authorized to provide a $20,000 monthly allowance to an escort, Assistant U.S. Attorney Ali Moghaddas said at the hearing.

If convicted, the accountant could face 11 to 14 years in prison just for his “side fraud,” according to the government. That doesn’t take into account Kamon possible culpability in the broader fraud scheme perpetrated by Girardi and others, which involved an estimated $100 million stolen from client settlement funds, the government said.

In addition, prosecutors said, the $1 million secured bond Kamon proposes to post as bail is far from sufficient to secure his return to court because he still has millions of dollars in foreign bank accounts.

The judge agreed Kamon could easily reimburse his family members and friends who have agreed to put up equity in their homes as part of his bond should he decide to flee rather than risk a possible 15 years in prison.

Jack DiCani, one of Kamon’s attorneys, told Fischer everybody knew where his client was going and that he travelled to the Bahamas and sought residency there under his own name. According to DiCani, he had repeatedly reached out to federal prosecutors in Chicago, where there’s a criminal investigation into the purported fraud by Girardi, and there hadn’t been any indication that Kamon was a target in that probe, which could have prompted him to flee.

“Mr. Kamon wanted a fresh start at life,” DiCani told the judge. “They’ve taken objective facts and read into them a nefarious explanation – that he was trying to hide from law enforcement.”

Kamon doesn’t have a criminal record, is charged with only one nonviolent crime, and nothing in his past or present conduct suggests that he is a flight risk, DiCani previously said in his request for pretrial release.

The government, however, said Kamon has been trying to avoid being served with lawsuits in civil litigation stemming from his role at Girardi Keese and that even his own lawyers didn’t know where he was. They also scoffed at the argument that there was nothing unusual about the fact that he had four mobile phones on him when he was arrested, saying that for some busy professionals it might be normal to have more than one phone, but not for someone who’s unemployed.

The California Legislature passed a law requiring the California State Auditor’s Office to conduct an audit of the State Bar’s attorney complaint and discipline process. The Legislature included this requirement in the law because the State Bar did not take action against Los Angeles lawyer Tomas Girardi, husband of “Real Housewives of Beverly Hills” star Erika Jayne, for misconduct until recently, despite repeated allegations of this attorney’s misconduct over decades.

A Los Angeles Times investigation documented how the now-disgraced attorney Tom Girardi cultivated close relationships with the agency and kept an unblemished law license despite over 100 lawsuits against him or his firm – with many alleging misappropriation of client money. Along with his family and employees, Girardi contributed more than $7.3 million to political candidates.

The Auditor of the State of California 2021 audit report is entitled “The State Bar of California: It Is Not Effectively Managing Its System for Investigating and Disciplining Attorneys Who Abuse the Public Trust” and was released on April 29, 2021.

The Auditor noted that “the State Bar’s backlog grew by 87 percent from the end of December 2015, to the end of June 2020.” As pointed out by the Auditor, this “growing backlog allows attorneys who are under investigation more time to continue practicing law while their cases are pending, increasing the risk for potential harm to the public.” The Auditor’s “analysis indicates that both higher- and lower-priority cases are taking significantly longer to resolve.” Additionally, as the Auditor highlights, the “State Bar is also disciplining attorneys at a drastically lower rate for reasons it cannot adequately explain. From 2015 through 2019, the total number of cases that resulted in discipline – including reprovals, suspensions, and disbarments – declined by 54 percent.”

The public outcry over Girardi’s long history of complaints prompted the State Bar to conduct its own special disciplinary audit, which it published in June 2021. The audit, commissioned by Interim Chief Trial Counsel Melanie Lawrence, revealed mistakes made in some investigations over the many decades of Mr. Girardi’s career going back some 40 years and spanning the tenure of many Chief Trial Counsels.

The State Bar subsequently prepared a proposal to streamline it’s disciplinary process. On October 28, 2022, the State Bar provided the Legislative Analyst’s Office (LAO) with its proposed (1) caseload processing standards for resolving attorney discipline cases within its Office of Chief Trial Counsel (OCTC), (2) establishment of a backlog goal and metrics to measure such a goal, and (3) staffing requirements needed to achieve the new standards.

As required by Chapter 723 of 2021 (SB 211, Umberg), The LAO presented its assessment of the State Bar’s proposal. which raised concerns with some of the assumption the state bar made in developing the new standards.

– – Overarching Comments – Consider Whether Changes for Additional Oversight Are Warranted. The State Bar’s proposal assumes that the existing disciplinary process is generally reasonable. However, the Legislature will want to consider whether it believes changes are warranted. Additionally, we note that the lack of legislative approval of the State Bar budget can make oversight difficult. Accordingly, the Legislature will want to consider what level of oversight it wants to exercise over State Bar processes and funding.
– – New Case Processing Standards – Partially Reasonable, but Raises Several Concerns. We found it reasonable to include both risk and complexity when prioritizing cases. However, we identified several concerns related to the proposed standards. For example, we find it unclear whether the aggressive time lines reflected in the standards are reasonable. In light of these concerns, we raised five key questions for legislative consideration. For example, the Legislature will want to consider how aggressive they believe case processing standards should be.
– – Establishment of Backlog Goal and Metrics – Partially Reasonable, but Also Raises Several Concerns. We found that alternative definitions of backlog could also be reasonable and identified several concerns with the State Bar’s proposal. For example, the State Bar’s proposed backlog metrics measure closed, rather than pending, workload. Based on our review, we identified three key questions for legislative consideration. For example, the Legislature will want to consider how backlog should be defined and calculated.
– – Staffing Analysis – Makes Sense to Delay Analysis. We found that it was reasonable that the State Bar report only provides a preliminary estimate of staffing and resource needs. However, we are concerned with the State Bar’s plan to conduct a staffing analysis in 2023 given that the full impact of various operational changes will likely not be known at that time. Based on our review, we identified two key questions for legislative consideration. For example, the Legislature will want to consider when would be the most appropriate time for the State Bar to conduct the staffing analysis.

The bar’s chief mission officer Yun Xiang said in reply that .”The state bar is pleased to learn that the Legislative Analyst’s Office found the proposed disciplinary case processing standards ‘reasonable’ in many key aspects,” He indicated that the state bar will continue to collaborate with the LAO and the Legislature to provide further clarifications and address the proposal-specific issues.”

Aaron Brown became an inmate at Los Angeles County jail on approximately February 16, 2018. On March 8, 2018 he transferred to “wayside” facility. One week later, he signed an agreement to participate in the conservation work program, which provided “work time” credits of 1 ½ days for every one day of work in the program.

On March 22, 2018, Brown slipped and fell while walking to the coffee pot at the print shop where he participated in the conservation work program. He reported the injury immediately and was examined at urgent care. He returned to urgent care the next evening due to hip pain. Hours later, he was released on the early release program.

Los Angeles County denied his claim for workers’ compensation benefits claiming there was a lack of and employment relationship.

After conclusion of a trial, the WCJ found that Brown was not an employee for purposes of workers’ compensation benefits. The WCJ relied upon an ordinance passed in 1970 that states that county inmates may be forced to labor and that such county inmates shall not be considered an employee for the purposes of workmen’s compensation insurance. Also submitted into the record is the Inmate Worker Agreement.

Brown’s petition for reconsideration was granted, and the WCAB panel concluded that he was an employee at the time in the case of Brown v County of Los Angeles/Sheriff’s Department – ADJ11278318 (December 2022).

Labor Code section 3351 defines “employee,” and section 3357 provides that “Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.” This is a rebuttable presumption.

Penal Code section 4017 provides that county inmates working in the suppression of fire are considered employees of the county. It does not speak as to the employee status of county inmates who do not work in fire suppression. The employee status of county inmates are thus left to the courts to decide.

In making this determination, courts have looked at whether the work that the inmate performed was “voluntary” or “compulsory” as an incident to incarceration and whether there was consideration for the work performed. If an inmate was performing compulsory work as an incident to penal servitude, he is not an employee and has no rights to workers’ compensation benefits. (Parsons v. Workers’ Comp. Appeals Bd. (1981) 126 Cal.App.3d 629 [46 Cal.Comp.Cases 1304].)

In deciding whether an inmate was performing compulsory or voluntary work, trial courts may ask the following questions (the Rowland factors): (1) Did the county require the worker to work as a condition of incarceration? (2) Did the inmate worker volunteer for the assignment? and (3) What consideration were received, if any; for example, monetary compensation, work-time credits, freedom from incarceration, etc. (Rowland v. County of Sonoma (1990) 220 Cal.App.3d 331, 333-334.).

There is a difference in determining employee status between persons incarcerated in state prison and person incarcerated in county jail. State inmates are statutorily included in the definition of “employee” while county inmates are subjected to a compulsory test to determine their employee status.

In more recent laws, employer control is a major factor in determining employment status (the more employer control, the more likely employment status is found, whereas here, the opposite effect results when applying the compulsory test, in that the more control the county exercises, the more likely the inmate’s work is found to be compulsory without the protections of an employment relationship.

The language in a local ordinance with respect to assigning work to inmates is not determinative, although it may be considered in determining whether the inmate’s work is compulsory or voluntary.

In applying the compulsory test above using the Rowland factors, the WCAB panel concluded that applicant’s work at the time was voluntary. Accordingly, it concluded that applicant is an employee of the county and entitled to workers’ compensation benefits.

Hospital overcrowding and healthcare access challenges have prompted two counties in Central California to issue emergency declarations in less than a week. Meanwhile, the largest health system in the region has gone out of network with several commercial insurance plans.

According to the story in Becker’s Hospital Review. the emergency declarations over healthcare access largely stem from the recent closure of Madera (Calif.) Community Hospital, the city’s only hospital for about 150,000 residents. It officially shut its doors at midnight on Dec. 30, after Trinity Health’s plan to buy the hospital fell through because the health system didn’t accept the conditions set forth by California Attorney General Rob Bonta, The Fresno Bee reported Jan. 3. The Madera County Sheriff’s Office declared a local state of emergency on Dec. 29, citing the “significant impact” the closure will have on the community.

“The lack of hospital services in Madera County is expected to strain local resources deployed within Madera County, thereby depleting ambulance and response resources such as law enforcement and fire,” the sheriff’s office wrote in a Facebook post. “By proclaiming a local state of emergency we are formally requesting help from state and federal officials.”

The closure means residents in Madera will have to travel at least a half hour to other hospitals, many of which are in neighboring Fresno County and already overcrowded, Madera County officials said during their Dec. 29 meeting.

In response, Fresno County proclaimed its own emergency declaration on Jan. 3, citing the additional strain the Madera hospital’s closure has put on other area hospitals amid a surge in respiratory viruses. The Fresno County Board of Supervisors also said local emergency services were operating under an “assess and refer” policy, which diverts non-emergency patients from hospitals to other sources of care, and that it adopted the emergency resolution to emphasize the need for assistance at the state and federal level, according to the Fresno Bee.

Fresno County’s largest health system, Clovis, Calif.-based Community Health System, operates four hospitals, a cancer institute and other outpatient facilities in the area.

On Dec. 31, in-network contracts expired between Community and several commercial payers, including UnitedHealthcare, Cigna and Anthem Blue Cross. A system spokesperson told Becker’s Jan. 4 the involved parties are still actively negotiating to reach agreements.

“As Community negotiates in good faith we must ask commercial health plans to acknowledge the unprecedented cost challenges of delivering care to the residents of the Central Valley and join us in reaching a fair and reasonable agreement,” the system wrote on its website.

A spokesperson for UnitedHealthcare told The Fresno Bee Dec. 19 that the system asked for an “egregious and unreasonable” rate increase.

“This is not affordable or sustainable,” the spokesperson said. “We’ve offered [Community Health System] market-competitive rate increases that will ensure its hospitals and facilities continue to be fairly compensated for the care they provide to our members.”

The affected facilities include Community Regional Medical Center, Fresno Heart & Surgical Hospital, Community Behavioral Health Center, Community Subacute & Transitional Care Center, Community Home Health and Community Health Partners, and Clovis Community Medical Center.

On Jan. 2, Centene’s Health Net and Community signed an in-network agreement covering commercial, Medicare and Medi-Cal plans.

Employers – and their vendors – need to be aware of the significant changes that are now in effect as the California Privacy Rights Act (CPRA) became operative on January 1, 2023.

The implementation of privacy rights in California began In 1972, when California voters amended the California Constitution to include the right of privacy among the “inalienable” rights of all people.

Since California voters approved the constitutional right of privacy, the California Legislature has adopted specific mechanisms to safeguard Californians’ privacy, including the Online Privacy Protection Act, the Privacy Rights for California Minors in the Digital World Act, and Shine the Light, but consumers had no right to learn what personal information a business had collected about them and how they used it or to direct businesses not to sell the consumer’s personal information.

San Francisco real estate developer Alastair Mactaggart began advocating for consumer privacy a few years ago, after a Google engineer he met at a dinner party told him Americans would be shocked by how much the company knows about us. Mactaggart successfully pushed the Legislature to pass a landmark data privacy law in 2018, the California Consumer Privacy Act of 2018 (CCPA). into law.

The CCPA gave California consumers the right to learn what information a business has collected about them, to delete their personal information, to stop businesses from selling their personal information, including using it to target them with ads that follow them as they browse the internet from one website to another, and to hold businesses accountable if they do not take reasonable steps to safeguard their personal information.

Mactaggart soon discovered that this law passed by the California legislature needed some changes, so he drove the effort to put Prop. 24 on the 2020 ballot. And voters seemed to have agreed with him.

The California Privacy Rights Act of 2020 (CPRA), also known as Proposition 24, was a California ballot proposition that was approved by a majority of voters after appearing on the ballot for the general election on November 3, 2020. This proposition expands California’s consumer privacy law and builds upon the California Consumer Privacy Act (CCPA) of 2018, which established a foundation for consumer privacy regulations, with an array of consumer privacy rights and business obligations with regard to the collection and sale of personal information.

The new CPRA took effect on Dec. 16, 2020, but most of the provisions revising the CCPA did not become “operative” until Jan. 1, 2023, applying to personal data collected on or after January 1, 2022. The CCPA is codified at Cal. Civ. Code § 1798.100 et seq., and the regulations are found at 11 CCR §§ 999.300 et seq.

CPRA did not replace the CCPA. The CPRA is more accurately described as an amendment of the CCPA. The California Privacy Protection Agency is a new agency, created by the CPRA, which is vested with “full administrative power, authority, and jurisdiction to implement and enforce” the CCPA.

CPRA eliminated the California Consumer Privacy Act’s (CCPA) exemption for employee personal information. Workers now have the same rights as any consumer. This includes requirements that are currently in effect under the CCPA as well as the new requirements added under the CPRA.

CPRA applies only to employees that are California residents, based on the definition of consumer. Businesses with a presence in multiple jurisdictions in the United States can consider applying a uniform approach, but should keep in mind employment laws in those other jurisdictions and any applicable data privacy laws in other jurisdictions. Notably, recent comprehensive data privacy laws passed in Virginia, Colorado, Utah and Connecticut exempt personal data collected in the context of employment.

Employers must provide notice of employees’ rights under the CPRA and give employees a way to tell the employer about their exercise of these rights. The employer has limited time to respond to a request and must properly document all responses.

Business-to-business transactions are now subject to the CPRA. It is not clear how this will apply to worker’s compensation claims administrators who receive information from an employer.

In actions by the California Attorney General, businesses can face penalties of up to $7,500 per intentional violation or $2,500 per unintentional violation (but there is an opportunity to cure any alleged violation within 30 days after receiving notice of the alleged violation). In actions brought by consumers for security breach violations, consumers may recover statutory damages not less than $100 and not greater than $750 per consumer per incident or actual damages, whichever is greater. In actions for statutory damages, consumers must first provide businesses with written notice and an opportunity to cure.

Consumers may also seek injunctive or declaratory relief, as well as any other relief the court deems proper. Businesses may also be subject to an injunction in actions brought by the Attorney General.