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Appellate Court Reverses Nonsuit Against Zenith’s Subrogation Case

Ricardo Gonzalez worked at AC Enterprises, a dairy operation in Tipton that was owned and run by Carl Brasil. The night before the accident, Hettinga Transportation, Inc, a company based in Pixley, had delivered the hay by truck to the dairy; Hettinga employees had unloaded and stacked the hay upon delivery.

In the early morning hours of April 29, 2017, Gonzalez, as part of his job duties, dislodged bales of hay from this haystack to feed the cows at the dairy. After Gonzalez downed a few bales of hay from the stack other hay bales toppled onto him, causing serious injury.

Gonzalez received workers’ compensation benefits from Zenith Insurance company, and also filed a civil action against Hettinga for negligence alleging they delivered and negligently stacked hay bales at AC Enterprises. Zenith Insurance Company filed a complaint-in-intervention.

The case proceeded to jury trial. When Gonzalez and intervenor rested after presenting their cases in chief, Hettinga moved for nonsuit. The trial court granted Hettinga’s motion for nonsuit as to plaintiffs’ and intervenor’s negligence claims, on grounds that expert witness testimony on the standard of care for stacking hay was required but not presented in plaintiffs’ and intervenor’s cases in chief.

Plaintiffs Gonzalez as well as intervenor Zenith Insurance Company,appealed the trial court’s ruling. The judgment of nonsuit was reversed and the matter was remanded for the trial court to conduct a new trial in the unpublished case of Gonzalez v. Hettinga Transportation -F083948 (March 2024).

Hettinga’s principal argument is that this case is one of professional negligence, rather than ordinary negligence.  More specifically, Hettinga argues this matter implicates a professional standard of care and that expert testimony was required to establish the applicable professional standard of care. The Court of Appeal disagreed.

Big bales are massive weighing approximately 1,100 pounds or half a ton per bale. When stacked four-high, the bales comprise 4,000 pounds or two tons of hay. Thus, the question is whether in stacking such bales, a reasonably prudent person would have stacked the bales on their narrower three-foot edges when they could have alternatively stacked them on their flat or wide, four-foot edges, especially as stacking the bales on their four-foot edges would result in a lower, overall stack height of 12 feet while stacking the bales on their three- foot edges would result in an “extreme” overall stack height of 16 feet. The bales also could have been stacked in the typical configuration and Brasil’s preferred configuration, that is, three-bale-high/flat, which would have resulted in a very manageable (by all accounts) overall height of nine fee.

Frank Ricardo, Carl Brasil, and Steve Hettinga, all of whom were knowledgeable about stacking hay, indicated that big bales should never be stacked on their narrow, three-foot edges, for reasons of safety and stability, especially when higher stacks were at issue. The Court of Appeal reviewed their testimony, and that of many other witnesses and concluded that the record contains evidence from knowledgeable co-workers which a jury could properly find that Hettinga did not exercise due care in stacking the hay upon delivery to AC Enterprises. Plaintiffs and intervenor presented evidence, in the form of the respective testimony as to the manner in which Hettinga stacked the bales delivered to AC Enterprises on April 28, 2017.

Here, the record taken as a whole, does not indicate that stacking haybales was a highly specialized profession – requiring extensive education and training and involving tasks of great complexity – such that the issue of negligence pertaining to hay stacking would entail a professional standard of care and require expert testimony thereon.”

Finally, Hettinga argued that plaintiffs and intervenor were required to, but did not, “establish that the medical services Mr. Gonzalez received were ‘attributable to the accident, that they were necessary and that the charges for such services were reasonable.’ ”

The jury heard that Gonzalez made a claim for payment of workers compensation benefits, Zenith was the insurer for AC Enterprises, and Zenith paid Gonzalez’s medical bills. The jury was provided with a detailed accounting of the expenses that Zenith had paid and heard testimony that the total amount paid by Zenith was $881,649.56. Under Labor Code section 4600, subdivision (a), Zenith (on behalf of Gonzalez’s employer) is required by law to pay for all medical treatment “that is reasonably required to cure or relieve the injured worker from the effects of the worker’s injury.” (Lab. Code, § 4600, subd. (a).)

Accordingly, the jury could properly infer that Zenith paid $881,649.56 in medical expenses because it was obligated to do so, so as to ensure Gonzalez received all the reasonably necessary treatment for injuries sustained in the accident at the dairy.

“Under these circumstances, a showing of negligence and proximate cause would suffice to establish a claim for reimbursement of workers compensation payments made for Gonzalez’s medical treatment on account of the accident.”

Porterville Man Pleads Guilty of Selling Misbranded Drugs

Huu Tieu, 61, of Porterville, pleaded guilty Tuesday to three counts of introduction of misbranded drugs into interstate commerce.

Tieu was the President and Chief Executive Officer of Golden Sunrise Pharmaceutical Inc. and Golden Sunrise Nutraceutical Inc. Golden Sunrise manufactured, marketed, and sold products that claimed to effectively treat a variety of medical conditions.

According to court documents, beginning on March 30, 2020, Tieu began selling a set of herbal mixtures he called the “Emergency D-Virus Plan of Care” as a COVID-19 treatment.

The treatment consisted of a box containing various vials of Golden Sunrise drug products, including one called “Imunstem,” together with an “Emergency D-Virus Plan of Care” information sheet. Tieu mailed the products to various practitioners, public officials, and other individuals both inside and outside of California.

According to court documents, the labeling for the drugs, including the information sheet that accompanied the drugs, was false and misleading and stated that ImunStem and other Golden Sunrise products were “uniquely qualified to treat and modify the course of the virus epidemic in China and other countries.”

Tieu falsely claimed the products had been the first dietary supplement in the United States to be approved as a prescription medicine by the U.S. Food and Drug Administration (FDA) to treat the COVID-19 virus.

In fact, the drugs were not FDA approved, and no Golden Sunrise product had ever been approved by the FDA for any purpose.

Tieu is scheduled to be sentenced before U.S. Magistrate Judge Barbara A. McAuliffe on June 12, 2024. Tieu faces a maximum statutory penalty of one year in prison and a $100,000 fine on each of the three counts. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by FDA Office of Criminal Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation with assistance from the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Jeffrey A. Spivak and Emilia P.E. Morris are prosecuting the case.

Both Superior Court and WCAB Have Jurisdiction Over Employer’s Lien

Alejandro Chavero Velazquez was employed as a tile setter. In 2018, he was working for his employer on a tile project at the residence of a customer. While working at the residence, Velazquez reportedly suffered a dog bite injury by the homeowner’s dog. He was apparently diagnosed with nerve damage and “complex regional pain syndrome” and underwent several surgeries.

A workers’ compensation case was opened against his employer and the workers’ compensation carrier, NorGUARD Insurance Company. He also filed a personal injury action against the homeowners. One of the disputed issues in the personal injury action was his claim of complex regional pain syndrome. Employer fault was not raised or litigated in the personal injury action. In May 2020, in the personal injury action, NorGUARD filed a notice of lien in the amount of $89,176.27 relating to workers’ compensation benefits that had been paid to Velazquez.

The homeowners had an insurance policy with a $1 million limit. They settled appellant’s personal injury action for the policy limit. The settlement agreement provided that the homeowners’ insurer would pay a portion of the settlement to appellant’s personal injury attorneys and that the amount would not be disbursed by the attorneys until the workers’ compensation lien was resolved. Specifically, the settlement agreement stated that the homeowners’ insurer would pay “$109,587.11 to be held in trust and not disbursed at all until the WC lien is fully resolved by settlement or judicial order payable to the LAMB and FRISCHER Law Firm IOLTA client trust account.” Velazquez’s attorney and NorGUARD’s attorney signed the settlement agreement, approving it “as to form and content,” in January 2022.

NorGUARD and Velazquez were unable to settle the workers’ compensation lien. The parties disagreed regarding the amount by which the lien should be reduced for attorney’s fees and the extent, if any, of employer fault. As a result, NorGUARD filed a civil action against Velazquez for breach of contract, alleging that Velazquez’s “failure to perform under the [settlement agreement] by payment to [respondent] of its workers’ compensation benefits constitutes a material breach of the [settlement agreement] . . . .”

Velazquez filed a special motion to strike the breach of contract cause of action under Code of Civil Procedure section 425.16, commonly known as the anti-SLAPP statute, which provides that a cause of action arising from constitutionally protected speech or petitioning activity is subject to a special motion to strike unless the plaintiff establishes a probability of prevailing on the claim. (§ 425.16, subd. (b)(1).) The trial court denied his anti-SLAPP motion.

Velazquez appealed,contending that the trial court erred in denying his anti-SLAPP motion and that in any event, the Workers’ Compensation Appeals Board (WCAB) has exclusive jurisdiction over this case because it involves an issue of whether the employer was at fault for appellant’s injury.

The Court of Appeal affirmed the trial court’s order in the unpublished case of NorGUARD Insurance Company v. Chavero Velazquez -H050725 (March 2014).

The parties disagree whether this breach of contract action involving respondent’s lien may be litigated in the trial court or must be determined in the workers’ compensation forum. Depending on the circumstances, the issue of employer negligence may be adjudicated in court or in the workers’ compensation arena. (See, e.g., Short v. State Compensation Ins. Fund (1975) 52 Cal.App.3d 104, 107.)

The Court of Appeal concluded tha Velazquez failed “to persuasively demonstrate that the WCAB has exclusive jurisdiction over the issue of employer negligence in the context of respondent’s breach of contract action. On this point, we find Marrujo v. Hunt (1977) 71 Cal.App.3d 972 (Marrujo) instructive.” In the present case, employer fault was not raised in the personal injury action against the homeowners. If the issue had been raised, the employer or carrier could have filed a complaint in intervention to protect a claim for reimbursement.

Velazquez contended that the lawsuit was a SLAPP (SLAPP is an acronym for strategic lawsuit against public participation,) because NorGUARD’s breach of contract claim “interfere[d] with [his] efforts in petitioning” the WCAB. The workers’ compensation attorney stated that the “issue of employer fault and how it will affect the lien and credit rights of [Velazquez]” are “currently being litigated” in the workers’ compensation case. It thus appears that “the proceeds of the settlement were subject to [respondent workers’ compensation carrier’s] lien in the amount of the benefits paid by it.” “In sum, appellant fails to establish that the trial court is an improper forum for resolving the dispute over respondent’s lien.”

In opposition to the anti-SLAPP motion, NorGUARD contended that it sought to enforce its subrogation rights under the Labor Code through its breach of contract action and that the action did not infringe upon appellant’s right to free speech or to petition the government.

In this case, although respondent’s breach of contract action was filed after appellant’s petitioning activity in the workers’ compensation arena, and even assuming appellant’s petitioning activity triggered respondent’s breach of contract claim, we determine that respondent’s breach of contract claim did not “aris[e] from” appellant’s petitioning activity (§ 425.16, subd. (b)(1)). Rather, the basis for respondent’s breach of contract claim, as alleged in the complaint, is appellant’s failure to pay.”

Battle Brewing Over Ballot Measure Repealing PAGA

The California Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits, including class actions, to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Those who intend to pursue PAGA cases must follow the requirements specified in Labor Code Sections 2698 – 2699.5. According to the California Legislative Analyst’s Office, approximately 5,000 PAGA notices are filed annually. Any penalties won under PAGA must be split between the employees (25%) and the state of California (75%).

A proposed ballot measure, the “Fair Pay and Employer Accountability Act,” if passed, will repeal PAGA and replace it with increased enforcement mechanisms in the hands of the Labor and Workforce Development Agency. The initiative at the center of the brewing major political battle, the Fair Play and Employer Accountability Act, got the green light to be placed on the November 2024 ballot almost two years ago.

If passed, the Labor and Workforce Development Agency will enforce labor code violations, focusing on encouraging voluntary compliance over punitive measure and ensure that 100% of the penalties go to workers. Notably, the proposed ballot measure would double potential penalties that could be levied, however, it would remove the threat of an award of attorneys’ fees. In exchange, PAGA – as it exists today, will be repealed. The proposal signifies a landmark development, aiming to maintain employee rights while potentially alleviating the burden of PAGA claims on businesses.

The initiative has received endorsements from the California Chamber of Commerce, Western Growers Association, California New Car Dealers Association, the California Restaurant Association and a long list of organizations.

The California Chamber of Commerce said, “The California Fair Pay and Employer Accountability Act is an opportunity to reform labor law enforcement to prevent frivolous litigation while ensuring that workers receive the wages they are owed in a timely manner, plus any penalties.”

The battle in November heats up as two reports released last week offer dueling narratives about whether PAGA helps or hurts workers – marking the opening of a potentially expensive fight over the landmark law.

On February 15, the UCLA Labor Center, PowerSwitch Action, and the Center for Popular Democracy released a new report, the first examining the impact of a ballot initiative on workers’ ability to fight workplace abuses, and what the authors claim are the theft of billions in wages from their paychecks and violations of sick leave and workplace safety rules. Labor researchers say that the ballot measure, if approved, would harm employees, particularly people with low-wage jobs, by taking away their ability to file what are essentially class-action suits against employers that allege labor law violations. The ballot measure also would weaken the state’s already strained system for enforcing workplace laws.

Corporations are aiming to buy themselves a ‘get out of jail free card’ for labor abuses,” said Minsu Longiaru, Senior Staff Attorney for PowerSwitch Action. “California must stand up for PAGA and send a clear message to big companies that stealing from people’s paychecks has consequences.”

But the business coalition backing the ballot initiative counters that the labor law has resulted in a proliferation of lawsuits that small businesses and nonprofits have little ability to fight. Workers end up getting less money after a long legal process than if they had filed complaints through state agencies. Backers stress it also offers replacement provisions that would bolster state agency enforcement of workplace rules.

Today’s PAGA system is completely broken and does not work well for employees or employers,” said Jennifer Barrera, president and chief executive of the California Chamber of Commerce, in announcing a report released last week by backers of the ballot initiative, called the Fix PAGA coalition.

Barrera said that because one employee can sue on behalf of others, it allows lawyers to stack charges and extract high penalties from employers with few barriers because PAGA claims don’t require the same type of notification and certification of workers allegedly affected that a class-action suit would require.

Barry Jardini, executive director of the California Disability Services Assn., said that members of the trade group, many of which are nonprofits reliant on state or federal funding, are increasingly burdened by PAGA claims. He said 20 out of some 85 members who responded to a recent survey said they dealt with PAGA claims in 2023.

Jardini said that disability service businesses have struggled to provide true “responsibility-free” 10-minute rest breaks in accordance with labor laws because often workers “can’t just walk away” from clients especially if they are out and about instead of at home. He said employers have looked for creative solutions, such as paying employees extra for working through breaks or tacking on breaks at the beginnings or ends of shifts rather than the middle, but these fixes aren’t legal substitutes for rest breaks workers are entitled to.

We run into a bit of a legal rock and a hard place,” he said. “We do have a conflict with the law in terms of some of our services. Once that becomes known, it’s relatively easy for an attorney to try to solicit a client that works in this industry that is maybe ripe for PAGA claims.”

Some disagree that there is rampant of abuse of PAGA. The UCLA Labor Center researchers published a report in February 2020 finding no evidence that PAGA unleashed a flood of frivolous litigation, as its detractors complain, and that it had demonstrably enhanced Labor Code compliance among employers.

Fresno Sleep Clinic Owner Sentenced to 19 Months for $1M Fraud

Travis Gober, 45, of Hanford, was sentenced to 19 months in prison for committing health care fraud and aggravated identity theft by submitting more than $1 million in fraudulent claims for sleep studies to Medicare, U.S. Attorney Phillip A. Talbert announced.

According to court records, Gober owned the VIP Sleep Center, which operated sleep clinics in Fresno and Tulare Counties. Sleep clinics perform diagnostic sleep studies on patients to identify disorders like sleep apnea and narcolepsy.

From October 2019 through September 2021, Gober caused the VIP Sleep Center to submit thousands of claims totaling nearly $1 million to Medicare for sleep studies that were not actually performed on patients. The claims also falsely stated that the patients had been referred for the sleep studies by physicians with whom Gober had previously worked. This was done because Medicare will not pay for a sleep study unless the patient was referred by a physician.

Gober committed this fraud, at least in part, to try to payoff financial debts and address other financial difficulties that his brother, Jeremy Gober, had caused the VIP Sleep Center and him to incur without his knowledge or consent.

This case is the product of an investigation by the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and the California Department of Health Care Services. Assistant U.S. Attorney Joseph Barton is prosecuting the case.

Travis Gober’s brother, Jeremy Gober, was previously charged with, and has pleaded guilty to, health care fraud and aggravated identity theft related to other sleep clinics in the Central Valley. Jeremy Gober is scheduled to be sentenced on May 20, 2024.

In December 2022,  A federal grand jury returned an 11-count indictment today against Jeremy Gober, 42, of Hanford, charging him with health care fraud and aggravated identity theft.

According to court documents, Jeremy Gober owned and operated the Got Sleep center, which was a sleep clinic in Fresno and Orange County, California.

From August 2016 through July 2020, Jeremy Gober caused Got Sleep to bill Medicare and Medi-Cal for thousands of sleep studies, totaling over $8,000,000, that the company did not actually perform on patients. This included sleep studies where the patients had died before the dates on which the studies were purportedly performed.

Duo Sentenced to Prison in $21M DME Fraud

Anthony Duane Bell Sr. and his son, Anthony Duane Bell Jr., were sentenced in federal court to 65 months and 12 months and one day, respectively, for their roles in fraudulently receiving more than $21 million in Medicare payments and lying to cover it up.

The pair, along with others, conspired to commit Medicare fraud by billing for medically-unnecessary durable medical equipment such as knee, ankle, shoulder, wrist and back braces. Bell Sr. pleaded guilty to Medicare fraud while Bell Jr. pleaded guilty to making false statements to a federal officer.

U.S. District Court Judge William Q. Hayes also ordered Bell Sr. to pay $21,725,604.56 in restitution to Medicare and forfeit $806,375.12 and a luxury house in El Cajon. The forfeited property was purchased using money obtained from the fraud. In arriving at the sentence, Judge Hayes found that Bell Sr. intended to defraud Medicare of over $46 million dollars and received over $21 million dollars.

According to court records, the Bells created companies known as Universal Medical Solutions 1 and Universal Medical Solutions 2, which supplied durable medical equipment.

In order to find customers for their businesses, the Bells entered into sham agreements with “marketing” companies that, instead of marketing, provided packets of information about Medicare beneficiaries for $125 to $350 each. These packets of information included a Medicare beneficiary’s personal information, medical history, Medicare number, and an audio recording between a call center and the patient, in which the patient supposedly agreed to accept a brace.

The packet also included a signed prescription from a doctor, obtained via telemedicine, claiming that the brace was medically necessary for the patient – although in almost all cases the prescription was signed by a physician who had no previous doctor-patient relationship with the patient, was often in another state, and at most had conducted an audio call with the patient. In all cases the doctor had not conducted any kind of physical examination of the patient.

The Bells bought thousands of these patient packets, each time indirectly paying the telemedicine doctors through the “marketing” companies. The packets were referred to in the industry as “Doctor’s Orders” or “D.O.s.” The Bells purchased the “D.O.s” for a variety of braces, paying the most (up to $350) for a back brace prescription, the type of medical equipment for which Medicare offered the highest reimbursement.

The Bells could then, after shipping the brace to the patient, bill Medicare around $1,359.89 for each back brace, through their companies. The Bells also bought other braces, including wrist, knee, and shoulder braces, and billed Medicare at much higher prices than they paid for them.

When Bell Jr. was interviewed by the FBI, he lied about his knowledge of the scheme. The case is being prosecuted by Assistant U.S. Attorneys Valerie H. Chu and Christopher M. Alexander of the Southern District of California.

Fraudulent Catheter Claims to Medicare Could Total $3 Billion

A report by National Criminal Justice Association; claimed that Medicare recipients from around the U.S. have said that a company called Pretty in Pink charged their health insurance companies thousands of dollars for urinary catheters that they never ordered or received. Flooded by complaints, the Pretty in Pink Boutique in Franklin, Tenn., a provider of accessories for cancer patients, <a href=”” target=”_blank” >launched a webpage in September to explain</a> that its leaders were dumbfounded. The boutique said another company with the same name was submitting the claims.

The complaints are a piece of an alleged fraud scheme whose scale has little precedent in the history of Medicare, an estimated $2 billion, reports the Washington Post. The case involves fraudulent insurance claims submitted by seven companies to the taxpayer-funded health insurance program. Federal officials are investigating the allegedly fraudulent billing for catheters. the companies collectively went from billing just 14 patients for catheters to nearly 406,000.

The National Association of ACOs (NAACOS) initially reported these findings to the federal government. The association’s allegations came from a review of two billing codes for Medicare claims data from the Centers for Medicare & Medicaid Services (CMS) Virtual Research Data Center. They say urinary catheter payments to beneficiaries accounted for $153 million in 2021 before surging to $2.1 billion in 2023. Catheter spending by DMEs increased by 15.5% as false claims were filed around the country.

In nearly all 50 states, catheter payment growth has skyrocketed. Over half of U.S. states saw an increase in Medicare fee-for-service DME catheter payments of 500% or more from 2022 to 2023. Yet the majority of payments can be attributed back to just seven companies – three companies in New York and one each in Texas, Florida, Connecticut and Kentucky – NAACOS reported.

While the companies used real patients’ information to submit bills, NAACOS found no evidence that the patients wanted the catheters or even received them. “We’ve just never seen anything like this nationally,” said Clif Gaus of NAACOS, whose members spotted and reported the billings to federal officials last fall. Gaus’s team estimates that Medicare was wrongly billed $2 billion for the catheters in 2022 and 2023.

Urinary catheters were an appealing target for scammers because orders for the low-cost products – small tubes often made with latex or silicone – could escape scrutiny on billing for expensive equipment, surgeries and other high-cost claims.

After alerting federal authorities, NAACOS felt they needed to push the envelope when the problem persisted. Last week, major news publications broke the story, though states had begun warning beneficiaries of potential fraud months earlier, and local news outlets had started to uncover elements of the scandal.

Now, providers are worried about a broken insurance fraud reporting process and the impacts data breaches have on a national scale. And experts are concerned this could be just the tip of the iceberg.The Office of Inspector General (OIG) for the Department of Health and Human Services has not revealed whether there is an ongoing investigation, citing internal agency policy.

NAACOS wants the OIG to pay closer attention to fraud reports it receives from ACOs, and it wants to work with CMS to improve the reporting process, a spokesperson said. Despite the troubles ACOs faced in this ordeal, the association says this is why ACOs are so valuable, as fraud detection is more identifiable. NAACOS is also pushing for improved communication between Medicare administrative contractors. Beyond that, it seeks more provider participation and advocates for extending the alternative payment model incentive.

After public reports of a large-scale, year-long Medicare fraud scheme involving catheter billing, leaders from the Energy and Commerce, Ways and Means, and Oversight and Accountability committees, along with GOP Doctors Caucus Co-Chairs, announced on March 6 that they are seeking a briefing from Department of Health and Human Services (HHS) Inspector General (IG) Christi Grimm and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure.

At the time of their announcement, the estimated amount of the fraud in their headline was reported to be “$3 Billion.” This estimate was explained by saying “Public reporting estimates the cost of fraud from this scheme to be at least $2 billion.However, discussions between committee staff and stakeholders suggest the dollar figure may be closer to $3 billion.”

In a new letter, the lawmakers request briefings from the HHS IG and CMS by March 20, 2024, regarding what steps are being taken to address this reported fraud and prevent its reoccurrence.

DOI Announces Key Insurance-Related Board & Committee Appointments

The Insurance Commissioner announced several appointments to the California Department of Insurance related boards and committees.

These appointments include naming Ronald Coleman Baeza as the newest member of the California Life and Health Insurance Guarantee (CLHIGA) Board of Directors, Samantha Tradelius as the newest member of the Curriculum Board,reappointmed members Andrew Chick and Heather Pierce to the California Insurance Guarantee Association (CIGA) Board of Governors, reappointed member Debra Gore-Mann to the California Organized Investment Network (COIN) Advisory Board, reappointed members Linda Akutagawa, Imelda Alejandrino, Annalisa Barrett, and Cecil Plummer to the Insurance Diversity Task Force, and reappointed member Jeremy Smith to the California Workers’ Compensation Insurance Rating Bureau (WCIRB) Governing Committee.

CLHIGA consists of all insurance companies licensed to sell life and health insurance, and annuities in California, and it protects certain policyholders against a company’s financial failure. The Board of Directors is responsible for the overall oversight of CLHIGA, which includes approving contracts and reinsurance treaties, authorizing assessments, borrowing money, taking legal actions, and serving on committees that oversee audit and investment functions. The Board consists of up to thirteen member insurers who are selected by the board members and are subject to the approval of the Commissioner.AB 1104 (Chapter 236, Statutes of 2019) added two additional members to the board who represent the public generally and are appointed directly by the Commissioner.

The Curriculum Board oversees the development of pre-licensing and continuing education curriculum for agents and brokers to uphold professional standards that protect consumers. This includes a list of preapproved courses of study as well as courses of study for professional designations. This Board also develops standards for providers and instructors who offer courses and other training to licensed agents and brokers.

The CIGA Board of Governors oversees the guarantee association’s general operations and management in order to protect policyholders in the event of an insurance company insolvency. Established in 1969 by the Governor and California State Legislature, CIGA comprises all insurance companies admitted to sell homeowners, workers’ compensation, automobile, and other specified property and casualty lines of insurance in California.

The California Organized Investment Network (COIN) was established in 1996 within the Department of Insurance to guide insurers on making financially sound investments that yield environmental benefits throughout California and social benefits within the State’s underserved communities. Commissioner Lara has prioritized COIN investments which drive affordable housing, support small businesses, combat climate change, and encourage investors to utilize diverse investment managers more. The COIN Advisory Board provides guidance to the Commissioner and the COIN program to meet its mission and chief priorities.

The Insurance Diversity Task Force oversees the Department’s Insurance Diversity Initiative, which encourages insurers to advance diversity of insurance company corporate boards and increase procurement contracts with diverse businesses owned by women, veterans and disabled veterans, members of historically disadvantaged communities, and LGBTQ+ people. Additionally, the Task Force makes recommendations to the Commissioner regarding innovative ways to increase diversity within the insurance industry. Last year, Commissioner Lara introduced the first-ever Insurance Diversity Index, a groundbreaking benchmarking tool for a more inclusive insurance industry.

The WCIRB Governing Committee sets policy, oversees WCIRB management, and reviews all issues involving pure premium rates, classifications, rating plans, rating systems, manual rules and policy, and endorsement forms. The WCIRB is a private organization licensed by the Department for the purpose of collecting, analyzing, and compiling rating data, with funding coming from assessments of its insurance company members. All workers’ compensation insurance companies in California are required by law to be members of the WCIRB.  

The next CLHIGA Board of Directors meeting will be held on May 7, 2024, the next Curriculum Board meeting is July 18, 2024, the next CIGA Board of Governors meeting is May 7 and May 8, 2024, the next COIN Advisory Board meeting is March 14, 2024, the next Insurance Diversity Task Force meeting is March 7, 2024, and the next WCIRB Governing Committee meeting is April 17, 2024.

More details are available at: All positions are uncompensated.

New Workers’ Comp and UI Time of Hire Pamphlets for 2024

The California Chamber of Commerce has published a reminder “Mandatory Pamphlet Updates for California Employers.All California employers are required to distribute six pamphlets to employees, and two of them – Unemployment Insurance (UI) and Workers’ Compensation Rights and Benefits – have mandatory updates for 2024. To fulfill their legal obligations, employers must make sure they’re giving the most current pamphlet versions to their employees. And remember, if you have Spanish-speaking employees, you’re required to provide the pamphlet in both English and Spanish.

The first revised pamphlet ― the California Unemployment Insurance pamphlet – notifies employees of their right to unemployment insurance benefits when they are terminated, laid off or take a leave of absence. Employers must provide this information to any employee no later than the effective date of the termination. The UI pamphlet:

– – Describes California’s UI benefits program;
– – Contains information about what makes employees eligible or ineligible for unemployment benefits;
– – Provides information on how to apply for UI benefits; and
– – Fulfills your legal obligation to distribute UI information to all employees who become terminated, laid off or take a leave of absence (note: It is also a best practice to provide this pamphlet when an employee resigns).

The latest Unemployment Insurance pamphlet (DE 2320 and DE 2320S) has “Rev. 67 (1/24).”

Second is the Workers’ Compensation pamphlet, which informs of new employees of their rights and obligations regarding workers’ compensation. The Workers’ Compensation pamphlet describes:

– – The California’s workers’ compensation benefits program, including the types of benefits available;
– – How to predesignate a physician who will provide treatment for work-related injuries;
– – What to do if there is a dispute;
– – The penalties for making fraudulent claims; and
– – What to do if the employee becomes injured at work.

The current Workers’ Compensation pamphlet revision date is 2/1/24.

CalChamber offers a California Required Pamphlets Kit – in both English and Spanish – which contains 20 each of the six required pamphlets. These six pamphlets can also be ordered separately in packs of 20: Paid Family Leave (PFL), Rights of Victims of Domestic Violence, Sexual Assault and Stalking, Sexual Harassment, State Disability Insurance (SDI), Unemployment Insurance and Workers’ Compensation.

Keep in mind, PFL and SDI pamphlets had mandatory changes issued in June 2023 and July 2023, respectively, so make sure you are using the most updated version.

Anti-SLAPP Statute Partially Protects School District from FEHA Claim

Tina Royer was a tenured English professor with the the Los Rios Community College District. For the previous thirteen years, she had worked at the Folsom Lake College campus, and during most of the relevant time period, she was the chair of the English department. Josh Fernandez was an English professor at Folsom Lake College. As department chair, Royer was Fernandez’s supervisor.

Royer is Caucasian, Christian, married to a Christian minister, and active in her church, and her Christian background and conservative views are known to her colleagues at Folsom Lake College. Fernandez is Hispanic and is allegedly affiliated with Antifa.

In the fall of 2018, Fernandez was up for tenure, and Royer was one of three members of his tenure review committee. During the tenure review process, all three committee members expressed concerns about Fernandez’s conduct on campus. All three members of the tenure review committee initially determined Fernandez did not meet the guidelines for granting tenure.

Fernandez, however, had threatened to sue the District for attempting to curtail his activities on campus, and purportedly in response to his threat, Dean Snowden ultimately changed his mind about granting tenure. Royer claimed Dean Snowden and Folsom Lake College President Whitney Yamamura successfully pressured her to vote in favor of granting Fernandez tenure.

Although Royer voted in favor of granting tenure, her evaluation included some “less than satisfactory” marks, and Fernandez received a copy of the evaluation. Shortly thereafter, a colleague told Royer that Fernandez was telling other department members he “hated” her “because he received a ‘less than satisfactory’ evaluation” from her.

Around March 2019, Royer complained to the District about Fernandez’s conduct and the effect it was having on her physical and mental health, and she asked that his classroom be moved so it was not next to hers. The District declined to move Fernandez’s classroom, and offered to move her classroom instead, but she did not think she should have to move when she had done nothing wrong. She asked to work remotely in order to avoid interactions with Fernandez on campus. The District agreed

Controversies escalated, and ultimately Royer sued her employer for six separate violations of the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) (FEHA) and for invasion of privacy.

She claims a coworker subjected her to harassment because of her race and religion, and the District discriminated against her because of her race and religion, retaliated against her for complaining about harassment, failed to prevent harassment, and failed to reasonably accommodate her disability. She also claims that, after she filed a claim pursuant to the Government Claims Act (Gov. Code, § 810 et seq.), the District invaded her privacy by publishing the claim on its Web site without redacting her home address and confidential information about her disability.

The District responded to the lawsuit by filing a special motion to strike pursuant to Code of Civil Procedure section 425.16 (the anti-SLAPP statute). The District’s motion was directed at the entirety of the causes of action for harassment and invasion of privacy, and portions of the causes of action for discrimination, retaliation, and failure to prevent harassment.

The trial court granted the motion as to the discrimination cause of action and denied it as to the other causes of action. The District appealed, and the Court of Appeal reversed in part and affirmed in part, and remanded the case in the unpublished case of Royer v. Los Rios Community College District -C096484 (March 2024).

The District challenges the trial court’s finding that the invasion of privacy claim does not arise out of protected activity under the anti-SLAPP statutes.However when the board met to consider and act on Royer’s claim submitted pursuant to the Government Claims Act, that meeting was an official proceeding authorized by law within the meaning of the anti-SLAPP statute.

Royer argues she “is not suing [the District] for publishing her tort claim,” but instead is suing “because [it] published her tort claim in full without redacting her confidential information.” The trial court appears to have agreed, because it found, “the gravamen of [Royer’s] claim is not the publication of the Tort Claim itself, but the inclusion of her private medical and identifying information unnecessarily.” However the trial court thus should have proceeded to the second step and determined whether Royer met her burden of establishing a probability of prevailing.

The order denying the anti-SLAPP motion was reversed as to Royer’s first cause of action for harassment because she did not establish a probability of prevailing on that cause of action. The order denying the anti-SLAPP motion as to Royer’s seventh cause of action for invasion of privacy is also reversed because the trial court erred in finding it did not arise out of protected activity, and we remand this case to the trial court to determine whether Royer established a probability of prevailing on the invasion of privacy cause of action.