Tag: 2024 News

July 22, 2019, Haoxiao Liu, a Goldengate bus driver trainee, was on a multi-hour bus trip with a Goldengate driving trainer. He sustained a host of injuries on this bus trip,

On December 26, 2019, Liu filed an action against Goldengate in small claims court, seeking compensation for injuries sustained on July 22, 2019. Following trial, plaintiff obtained a judgment against Goldengate in the amount of $615.

On July 19, 2021, Liu filed the instant lawsuit against Goldengate Bus Inc., and Gang Guo alleging claims for negligence and intentional tort arising out of the injuries sustained on July 22, 2019.

In his negligence cause of action, plaintiff alleges that defendants “failed to provide [him with] the necessary work environment,” “failed to protect [their] employee,” “failed to do anything to care and protect [their] new employee,” “failed to pay wage that [they] promised to pay,” and “failed to report the injury of the plaintiff to its insurance company.”

In his intentional tort claim, plaintiff similarly alleges that “[a]s a direct result of defendants’ [negligence], abuse of power, [and] hostile work environment,” he suffered injuries.

In response, defendants demurred, arguing that plaintiff’s claims were barred by the exclusive remedy rule and the doctrines of res judicata and/or collateral estoppel.

The trial court sustained defendants’ demurrer without leave to amend. It found that defendants “established that the workers’ compensation exclusivity rule bars Plaintiff’s claims” and that plaintiff’s claims against Goldengate were barred by the doctrine of res judicata.

The Court of Appeal affirmed the dismissal in the unpublished case of Liu v. Goldengate Bus -B320846 (July 2024).

Res judicata describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Under the doctrine of res judicata a judgment for the defendant serves as a bar to further litigation of the same cause of action.

Claim preclusion applies when (1) the claim raised in the prior adjudication is identical to the claim presented in the later action; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior adjudication.

“Here, all elements of res judicata are met. There is a final judgment in favor of plaintiff and against Goldengate arising out of the small claims court action. The claims raised therein are the same as those alleged in this action and involve the same parties. And, there was an adjudication on the merits, namely a trial.”

“Even though Guo was not a party to the small claims court action, the doctrine of res judicata bars plaintiff’s claims against him. As alleged in the complaint, his liability, if any, is entirely derived from Goldengate’s liability.”

Assistant U.S. Attorney Matthew Yelovich, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office for the Northern District of California, announced criminal charges against four defendants in connection with an alleged scheme to defraud federal health care benefit programs including Medicare and Medicaid.

The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action, and are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 193 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.75 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the enforcement action, seized over $231 million in cash, luxury vehicles, gold, and other assets.

The following individuals are charged in the Northern District of California:

– – Riley Levy, 30, of Peoria, Arizona, was charged by information with conspiracy to distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc. (“Done”), Levy, Done’s Executive Leader, Operations and Strategy, conspired to distribute Adderall and other stimulants by means of the Internet that were not for a legitimate medical purpose in the usual course of professional practice..
– – Christopher Lucchese, 58, of Plano, Texas, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc., Lucchese, a medical doctor, issued prescriptions for Adderall and other stimulants that were not for a legitimate medical purpose in the usual course of professional practice.
– – Yina Cruz, 37, of Glenwood, New Jersey, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Cruz, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice. .
– – Katrina Pratcher, 70, of Altadena, California, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Pratcher, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice..

The Northern District of California, in particular, worked with the Department’s Criminal Division and other law enforcement organizations to investigate and prosecute the cases filed during the enforcement period: Drug Enforcement Administration, Homeland Security Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and IRS Criminal Investigation.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force. 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 operates in 27 districts, charged more than 5,400 defendants who collectively billed Medicare, Medicaid, and private health insurers more than $27 billion.

Payments for medical-legal evaluations and reports used to resolve medical disputes in California work injury claims have increased more than expected since a new Med-Legal Fee Schedule (MLFS) took effect in April 2021 according to a new CWCI study, with the average payment for a comprehensive exam up 52%, primarily due to new per-page fees for record review that are paid on top of flat fees for med-legal evaluations services.  

When the Division of Workers’ Compensation (DWC) adopted the new schedule, it anticipated it would result in a 25% increase in payment levels to adequately compensate med-legal evaluators

In addition, 2023 saw a 6 percent increase in Qualified Medical Evaluators (QMEs) compared with pre-pandemic levels

Implementation of the updated MLFS for the California workers’ compensation system three years ago led to a comprehensive overhaul of the payment formulas for med-legal evaluations and reports.  Complexity and time-based payments that had been in effect since 2006 were replaced with flat fees and payments for record reviews exceeding specific page thresholds were added.

.CWCI’s study, which updates a preliminary analysis from 2021, uses payment data for med-legal evaluations and reports with dates of service from January 2015 through October 2023, valued as of December 2023, to compare the utilization and reimbursement of med-legal services rendered before and after the new schedule’s April 1, 2021, effective date.  The study analyzed changes in evaluation and report patterns and payments.  One goal of the new MLFS was to attract and retain Qualified Medical Evaluators (QMEs) to conduct medical-legal evaluations to better meet demand.  CWCI used DWC data from calendar years 2019 to 2023 to track changes in the number of registered QMEs and the number of QME panel assignments by medical specialty.

A review of the mix of med-legal services found that between April 2021 and 2023 there was a big shift in the use of follow-up exams, which was anticipated as the new MLFS calls for the follow-up evaluation code to be used for 18 months after the preceding comprehensive exam, versus 9 months under the 2006 schedule.  Other key findings include:

– –    There has been a 52% increase in the average reimbursement for comprehensive evaluations, and a 29% increase for supplemental reports since the new MLFS took effect.

– –    Additional charges for excess record review were found on 43.3% of the comprehensive evaluations, 24.9% of the follow-up evaluations, and 30.8% of the supplemental reports. For comprehensive evaluations, the new per-page record review fee added an average of $1,817 to the $2,015 flat fee payment for services with page-review.  Page-review payments drove nearly three quarters of the increase in comprehensive evaluation payments under the new schedule.  In addition, the per-page record review payments added an average of $1,338 to the flat fee for follow-up evaluations with excess page review and $1,335 to the flat fee for supplemental reports with excess page-review.

– –    The number of certified QMEs has increased 5.9% from 2,561 in 2019 to 2,712 in 2023. That improvement, however, has been offset somewhat by a 2.9% increase in the number of panel assignments over the same period, resulting in a net gain of about 3 percent.

– –    Physicians specializing in orthopedic surgery provided 44% of the med-legal services in 2023, followed by chiropractors who provided 11% of the services.

CWCI has published its study in a Research Update Report, “Increased Medical-Legal Costs and Current QME Supply – Impact of the 2021 Medical-Legal Fee Schedule.”  The report is available to CWCI members and subscribers who log on to the Research section at www.cwci.org.  Others may purchase the report from CWCI’s online store, here.  

No one tracks how many of Cal Fire’s 12,000 firefighters and other employees suffer from mental health problems, but department leaders say post traumatic stress disorder and suicidal thoughts have become a silent epidemic at the agency responsible for fighting California’s increasingly erratic and destructive wildfires.

In an online survey of wildland firefighters nationwide, about a third reported considering suicide and nearly 40% said they had colleagues who had committed suicide; many also reported depression and anxiety.

Nonetheless, CalMatters claims the response of the California workers’ compensation system for these injured firefighters is a “total system breakdown.”

And  CalMatters goes on to say “California’s workers’ comp – which is supposed to help people get medical treatment for workplace illnesses and injuries – can be a nightmare for firefighters and other first responders with PTSD.

Claims filed by firefighters and law enforcement officers are more likely to involve PTSD than claims by the average worker in California – and they have been denied more often than claims for other medical conditions, according to the research institute RAND.

From 2008 to 2019 in California, workers’ comp officials denied PTSD claims filed by firefighters and other first responders at more than twice the rate of their other work-related conditions, such as back injuries and pneumonia, RAND reported. About a quarter of firefighters’ 1,000 PTSD claims were denied, a higher rate than for PTSD claims from other California workers.

“It’s a fail-first system. You have to get a broken leg to show you are in need of support. With mental illness, we are constantly having to prove to everybody why we were ill. You have to get to the point of suicide,” said Jessica Cruz, the California chief executive officer of the National Alliance on Mental Illness.

CalMatters provides an example to back up its claim. Todd Nelson, former Cal Fire captain, “was running on the Foresthill Bridge, the highest in California, fleeing cops and firefighters after his wife reported that he was su icidal. He hurdled a concrete barrier and straddled the railing of the bridge in the Sierra Nevada foothills, staring down at a large rock 730 feet below. As the rescuers closed in, Nelson leaned precariously over the chasm. His strategy – making the fatal plunge appear accidental, allowing his family to collect his life insurance.”It was not Nelson’s first suicide attempt, he had tried to take his life many times before.

“The incident began the firefighter’s arduous, years-long journey toward wellness, threaded through a bureaucratic labyrinth strewn with more obstacles than he’d ever encountered on a California wildfire: finding qualified medical help, battling an insurance company to pay for it and navigating the tangled morass of California’s workers’ comp. All without going broke or returning to his dark place.”

Jennifer Alexander, Nelson’s therapist, said patients in acute crisis simply don’t have the mental capacity to ride herd on stubborn workers’ comp claims. Alexander said she was once on hold for more than six hours with Cal Fire’s mental health provider attempting to get one of her bills paid, and she has waited years to get paid for treating firefighters.

“People give up. It’s a battle … They are not fully functional,” said Alexander, who for 21 years has specialized in treating first responders with trauma and PTSD and has spent an estimated 25,000 hours treating them. “You are not talking about healthy individuals who can sit on the phone for hours.”

Cal Fire firefighters and other workers also have trouble finding qualified therapists, especially outside major cities in rural areas, where many are based. In 2021, less than half of people with a mental illness in the U.S. were able to access timely care. Therapists are reluctant to take workers’ comp, or sometimes any type of insurance. because they often have to wait months or years to be reimbursed.

Michael Dworsky, a senior economist at the research institute RAND and one of the study’s project leaders, called workers’ comp “challenging and bureaucratic.”

“Even if the claim is accepted, there can be disputes about the medical necessity of individual bills. Just because your claim is accepted, doesn’t mean you are done fighting with the insurance company,” he said.

In 2020 lawmakers took a major step,adding a legal shortcut or “presumption” to the state labor code, stipulating that firefighters and other first responders are considered at high risk for PTSD in the course of doing their job. A law enacted last year extended the presumption to 2029.

Before enacting the law, state officials asked RAND researchers to report on the scope of the problem. They analyzed nearly 6 million claims filed between 2008 through 2019 and interviewed dozens of experts, including a representative sample of 13 first responders. The researchers found a consistent and troubling trend among the 13: “Nearly all workers said that they had filed a workers’ compensation claim for their mental health conditions – yet almost none received PTSD care paid for by workers’ compensation.”

Many therapists say they haven’t seen much, if any, improvement. Nelson’s therapist, Alexander, called workers’ comp a “total system breakdown.” A spokesman for the Department of Industrial Relations refused to grant interview requests from CalMatters or answer questions or provide data about firefighters’ mental health claims.

In 2014, San Marcos Unified School District awarded Lusardi Construction Company a contract to construct the San Marcos K-8 School Project. Lusardi subcontracted with Pro Works to install the iron reinforcing work for the Project..

In 2015, Division of Labor Standards Enforcement (DLSE) opened an investigation into a complaint that Pro Works violated former Labor Code section 1777.5 by failing to: (1) provide contract award information; (2) request dispatch of apprentices from applicable apprentice committees; (3) employ registered apprentices in compliance with a required apprentice to journeyperson ratio; and (4) make certain required training fund contributions to an approved apprenticeship program.

Deputy Labor Commissioner Kari Anderson served several documents on Lusardi and Pro Works including a “notice of investigation” and a request that the forward certain listed documents. The entities responded differently to Anderson’s documents request.

Anderson issued a “Penalty Review” summarizing her findings. She concluded that in February 2015, Pro Works violated the statutes and regulations relating to apprenticeships by failing to submit compliant DAS 140 and 142 forms and other required information. Anderson found that Pro Works “failed to hire any apprentices.” She also concluded Pro Works had a “history” of apprentice violations, and specifically listed their dates and descriptions. Anderson concluded the penalty should be assessed based on Pro Works’s failure to comply with four out of the five factors set forth in former Labor Code section 1777.7, subdivision (f). Penalties were assessed in the amount of $30,800, consisting of $200 per each of 154 days of section 1777.5 violations.

Lusardi timely filed a request for review of Anderson’s decision with the Director. Before the review hearing started, the hearing officer ruled the 2014 version of the relevant Labor Code provisions and regulations would apply, based on the Project’s bid advertisement date. He also ruled regarding the burden of proof that “DLSE will have to come forward with sufficient evidence to provide prima facie support for the penalty assessment.” If this is done, “Lusardi will have . . . the burden of proof set forth in [California Code of Regulations, title 8, section] 232.50[, subdivision] (b).”

On the first day of the hearing, Lusardi’s counsel initially stated three of its representatives as well as Senior Deputy Labor Commissioner Michael Nagtalon who had reviewed and approved the “Penalty Review” would be called to testify. But Nagtalon was not available. DLSE’s sole witness, Anderson, was the only person who testified that day.

On the second and last day of the hearing, Lusardi’s counsel sought the testimony of Nagtalon, who was under subpoena. DLSE’s counsel explained Nagtalon was unavailable as he was outside of the country, but he offered to produce Nagtalon for a rescheduled hearing. However, Lusardi elected not to request a continuance to obtain Nagtalon’s testimony or to put on its case. Instead, its counsel stated, “Lusardi will rest without presenting any further evidence and will not move any of Lusardi’s exhibits into evidence in this matter.” Counsel explained: “We are not going to present any evidence because we feel very strongly the Labor Commissioner has failed to meet its burden in this matter.”

Lusardi’s administrative appeal was unsuccessful and the Director affirmed the hearing officer’s findings, concluding DLSE met its burden to present evidence showing prima facie support for the penalty assessment, including that Lusardi knew of Pro Works’s violations and was liable for the penalties. Lusardi filed a petition for writ of administrative mandamus under Code of Civil Procedure section 1094.5, which the superior court denied. The Court of Appeal affirmed the Director in the published case of Lusardi Construction Co. v. Dept. of Industrial Relations – D081704 (June 2024.)

On appeal, among other issues Lusardi contended the court erroneously adopted the Director’s “interpretation and unprecedented application of the two prongs of [former] Labor Code section 1777.7, subdivision (d)(1)-(4).”

Former section 1777.7, subdivision (d) provided: “If a subcontractor is found to have violated Section 1777.5, the prime contractor of the project is not liable for any penalties under subdivision (a), unless the prime contractor had knowledge of the subcontractor’s failure to comply with the provisions of Section 1777.5 (and the second prong in this case) or unless the prime contractor fails to comply with any of the following requirements” and four additional requirements are listed in this law.

The superior court denied Lusardi’s writ petition, interpreting former section 1777.7 subdivision (d) in the disjunctive: “Based on the plain language of the statute, the [c]ourt believes that the Legislature intended for the [Director] to have the burden of establishing that petitioner had knowledge of the subcontractor’s failure to comply with [former section] 1777.5 or that petitioner failed to comply with any [of] the requirements set forth in [former section 1777.7 subdivision] (d)(1)-(4). [¶] . . . [¶] The Director focused on the first prong of [former section] 1777.7[,subdivision] (d), and made a finding that Lusardi had knowledge of the subcontractor’s apprentice violations.”

The Court of Appeal noted that “Statutory construction is a question of law we decide de novo. [Citation.] Our primary objective in interpreting a statute is to determine and give effect to the underlying legislative intent. [Citation.] ”

In interpreting the disjunctive parts of former section 1777.7, subdivision (d), The Court turned to one court’s discussion of the challenges in interpreting the conjunction “or”: “The fact is that there is nothing very plain about the use of the connective “or” in legal drafting.’ [Citation.] “Sometimes it joins alternatives; sometimes it doesn’t. Sometimes or means and; sometimes it doesn’t[ ].” [Citation.] “Additionally, if ‘or’ is a disjunctive connector, sometimes it connects words in the inclusive sense (i.e., A or B, or both); other times, it connects words in the exclusive sense (i.e., A or B, but not both). [Citation.] Thus, the potential ambiguity created by ‘or’ is not one dimensional.”

The Court of Appeal concluded that “the court did not err in interpreting former section 1777.7, subdivision (d). The statute’s plain language provides two inclusive and alternative ways for imposing liability on a prime contractor for penalties resulting from the subcontractor’s violations of former section 1777.5. Specifically, first, the prime contractor is not liable for the penalties ‘unless [it] had knowledge of the subcontractor’s failure to comply’ with the statute; or, second, it is not liable for the penalties ‘unless the prime contractor fails to comply with any of the’ requirements set forth in the remainder of section (d).”