Tag: 2025 News

The California Department of Insurance announced a major enforcement action against State Farm General Insurance Company after an expedited investigation uncovered significant mishandling of insurance claims filed by survivors of the 2025 Los Angeles wildfires. Acting on consumer complaints, Insurance Commissioner Ricardo Lara ordered a Market Conduct Examination that documented a pattern of unlawful behavior in more than half of the claims reviewed.

State Farm policyholders filed approximately 11,300 residential claims related to the Los Angeles wildfires, nearly one-third of the 38,835 claims filed across all insurers, according to the Department’s official claims tracker. The violations identified by the Department indicate that thousands of survivors may have been affected.

The Department’s enforcement action seeks millions of dollars in penalties, considered the largest amount pursued this century following a wildfire disaster. In addition to penalties, the Department is requiring State Farm to take corrective actions to speed up payments and resolve outstanding claims

Department examiners reviewed a sample of 220 claims and found 398 violations of state law in 114 of those claims, many of which contained multiple violations. Major violations mirror the delays and denials reported by wildfire survivors to the Department, including:

– – Slow and inadequate investigation: State Farm failed to begin investigating claims within 15 days, failed to accept or deny claims within 40 days, and failed to pay accepted claims or provide written notice of the need for additional time within 30 days, as required by law.

– – Underpayment of claims: State Farm made unreasonably low settlement offers and underpaid claims.

– – Multiple adjusters causing confusion: State Farm failed to assign adjusters within statutory timelines and reassigned adjusters repeatedly, creating what survivors described as “adjuster roulette.”

– – Smoke damage claim denials and delays: Smoke damage claims represented nearly half of all consumer complaints. Examiners found that State Farm failed to provide required written denials for hygienist and environmental testing, misclassified testing costs, and misrepresented policy provisions related to inspections.

– – Inadequate communication: State Farm failed to respond to policyholders, send required status letters, or provide notice when additional time was needed to determine claims.

Since last January, the Department has recovered more than $280 million from all insurance companies for survivors of the Eaton and Palisades fires through direct intervention. As of March 3, 2026, insurers have paid out more than $23.7 billion to residential, commercial, and auto policyholders impacted by the fires.

The Department has filed an Accusation and Order to Show Cause against State Farm — the first step toward a public hearing before an administrative law judge. The filing alleges violations of the Unfair Insurance Claims Practices Act and related regulations, including the 398 violations identified in the Market Conduct Examination and 34 additional violations based on consumer complaints.

Under California Insurance Code Section 790.035, penalties may reach $5,000 per violation, or $10,000 for willful violations. Penalties may be imposed by the Commissioner following the administrative hearing.

Wildfire survivors experiencing delays, disputes, smoke damage issues, or other claim problems are encouraged to file a formal complaint with the Department of Insurance at insurance.ca.gov or by calling (800) 927-4357.

Separate from today’s action, the California Department of Insurance, Consumer Watchdog, and State Farm General recently reached a three-party settlement agreement over State Farm’s emergency rate request, now set to be reviewed by an impartial Administrative Law Judge.  

State Farm said in a statement it rejected any suggestions it “engaged in a general practice of mishandling or intentionally underpaying wildfire claims” and called the state’s insurance market “dysfunctional.” The company said it has paid out more than $5.7 billion on 13,700 auto and home insurance claims related to the fires.

“The threat to suspend State Farm General’s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California’s homeowners insurance market,” the statement said.

Arturo Vela was hired by Harbor Rail Services of California, Inc. (Harbor) as a railcar repairman and was terminated five months later in October 2021. Before beginning work, Vela signed a mutual arbitration agreement covering all employment-related claims. The agreement also contained a class and representative action waiver, meaning Vela gave up his right to pursue claims on behalf of other workers.

Harbor was not itself a railroad, it was a repair and inspection contractor working under a service agreement with Pacific Harbor Line (PHL), a short-line railroad operating a train yard in Wilmington, California. Larger railroads Burlington Northern Santa Fe and Union Pacific would deliver freight cars to PHL’s yard, where the cars were disconnected from locomotives, taken out of service, and left for inspection and repair. Vela’s work consisted of changing wheels and brake pads, disassembling and reassembling train cars, and welding and fabricating metal components — all performed on decommissioned cars sitting in the yard. Once repaired, the cars were returned to PHL and eventually back to the freight railroads.

In October 2023, Vela filed suit in Los Angeles County Superior Court against Harbor, asserting a slate of California Labor Code violations — unpaid overtime, missed meal and rest period premiums, unpaid minimum wages, late final wages, noncompliant wage statements, and unreimbursed business expenses — along with an Unfair Competition Law claim. Vela brought these claims on his own behalf and on behalf of a proposed class of current and former Harbor employees.

Harbor moved to compel Vela’s individual claims to arbitration and to dismiss his class claims. The trial court held multiple rounds of briefing and, after receiving supplemental evidence and argument, granted Harbor’s motion in February 2025. The court ordered Vela’s individual claims to arbitration and dismissed and struck his class claims, finding the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., governed the parties’ agreement and that no exemption removed it from the FAA’s reach.

The Court of Appeal affirmed the dismissal and striking of Vela’s class claims in the published case of Vela v. Harbor Rail Services of California, Inc., Case No. B344723 (May, 2026).

Railroad Employee. Section 1 of the FAA exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Vela argued he qualified as a “railroad employee” because his work was performed for PHL under Harbor’s service contract with that entity. The court rejected this theory on a threshold ground: a “contract of employment” under Section 1 must have the qualifying worker as one of its parties. Vela had no contract with PHL. Citing Fli-Lo Falcon, LLC v. Amazon.com, Inc., 97 F.4th 1190, 1196–1197 (9th Cir. 2024), and Amos v. Amazon Logistics, Inc., 74 F.4th 591, 596 (4th Cir. 2023), the court held that the Harbor–PHL service agreement — a business-to-business contract — could not qualify. The court also rejected Vela’s reliance on the Railway Labor Act’s definition of “employee,” finding no evidence that PHL supervised or directed Vela’s work; Harbor, by contract, retained exclusive control over its workers.

The FAA Exemption — Transportation Worker. The Supreme Court’s decision in Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), requires courts to (1) identify the class of workers to which the individual belongs based on the work they typically perform, and then (2) determine whether that class is “engaged in foreign or interstate commerce.” Under Saxon, workers who are “directly involved in transporting goods across state or international borders” fall within the exemption. For workers whose duties are more removed from that activity, they must play a “direct and necessary role in the free flow of goods across borders” to qualify. The Ninth Circuit subsequently applied Saxon in Ortiz v. Randstad Inhouse Services, LLC, 95 F.4th 1152, 1160 (9th Cir. 2024), requiring that a worker’s relationship to the movement of goods be “sufficiently close enough” to play “a tangible and meaningful role” in interstate commerce, and in Lopez v. Aircraft Service International, Inc., 107 F.4th 1096, 1101 (9th Cir. 2024), which found an airplane fuel technician qualified because refueling was a “vital component” of an aircraft’s ability to engage in interstate transportation.

Applying this framework, the court held that Vela’s class — workers who inspect and repair freight cars that have been removed from service and placed in a maintenance yard — is too far removed from actual transportation to qualify. The cars were decommissioned and unusable until Vela and his coworkers finished their tasks. It was only after repairs were completed that the cars re-entered service and resumed a role in moving goods. The court also noted the absence of any evidence that Vela’s class typically worked on cars that still contained freight. Cases Vela cited in support, including Betancourt v. Transportation Brokerage Specialists, Inc., 62 Cal.App.5th 552 (2021) (package delivery driver), and Nieto v. Fresno Beverage Co., Inc., 33 Cal.App.5th 274 (2019) (delivery truck driver), were distinguished because those workers played active roles in moving goods — Vela did not.

Because the FAA applied and no exemption saved Vela from it, the class action waiver in his arbitration agreement was enforceable under federal law, which preempts California doctrine that would otherwise void such waivers. See Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348, 359 (2014).

For half a century, the medical world has classified traumatic brain injuries using essentially the same tool: the Glasgow Coma Scale, a bedside scoring system developed in 1974 that rates a patient’s eye opening, verbal responses, and motor function on a 15-point scale. A score of 13 to 15 is “mild,” 9 to 12 is “moderate,” and 3 to 8 is “severe.” That three-tier system has driven clinical decision-making, research design, insurance determinations, and — critically for this audience — workers’ compensation claims adjudication for decades.

That system is now being replaced. In May 2025, an international team of 94 experts from 14 countries, led by the National Institutes of Health and the National Institute of Neurological Disorders and Stroke, published a new classification framework in The Lancet Neurology. Called CBI-M, it represents the most significant change in how traumatic brain injuries are assessed and categorized since the Glasgow Coma Scale was introduced. Trauma centers nationwide are beginning to test it, and workers’ compensation professionals handling head injury claims need to understand what is coming.

The problem with the mild/moderate/severe classification is not that it is inaccurate — it is that it is incomplete. Within the “mild” TBI category alone, there is enormous variation. One patient might sustain a brief blow to the head with no loss of consciousness and a momentary gap in memory. Another patient in the same “mild” category might lose consciousness for 20 minutes and have a small brain bleed visible on imaging. Under the current system, both receive the same classification, the same label, and — too often — the same clinical follow-up, which for “mild” TBI frequently means discharge from the emergency department with minimal arrangements for ongoing care.

The new framework does not discard the Glasgow Coma Scale — it expands on it. CBI-M stands for Clinical, Biomarker, Imaging, and Modifier, representing four pillars of assessment that together provide a multidimensional picture of the injury rather than a single number.

The clinical pillar retains the Glasgow Coma Scale but uses each component score individually rather than collapsing them into a single sum. It also incorporates pupillary reactivity — whether the pupils respond normally to light — which is a significant predictor of outcomes that the traditional GCS sum score alone does not capture.

The biomarker pillar is entirely new to TBI classification. It incorporates blood-based measures that can detect the presence and extent of brain injury. The FDA approved the first blood test for brain injury in 2018, and the technology has advanced rapidly since. Specific proteins released when brain tissue is damaged — including glial fibrillary acidic protein (GFAP), ubiquitin C-terminal hydrolase L1 (UCH-L1), and S100 calcium-binding protein B (S100B) — can now be measured from a standard blood draw within hours of injury. Elevated levels indicate that brain injury has occurred, even when the patient’s clinical presentation appears mild and CT imaging looks normal.

The imaging pillar formalizes the role of brain imaging — CT and MRI — in characterizing the injury. Rather than simply asking whether a scan is “positive” or “negative,” the framework categorizes the specific types of pathology present, such as contusions, hemorrhages, or diffuse axonal injury, each of which carries different implications for recovery.

The modifier pillar accounts for individual factors that influence clinical presentation and outcome: the mechanism of injury, the patient’s age, preexisting medical conditions, prior head injuries, and psychosocial factors. These modifiers have always been relevant to prognosis, but the current classification system ignores them entirely.

Independent medical examinations will need to adapt. Medical evaluators who currently rely on the GCS classification to frame their opinions about injury severity and causation will need to engage with the new framework. The biomarker pillar deserves special attention because it introduces something the workers’ comp system has never had for traumatic brain injury: an objective, measurable indicator of injury that does not depend on patient self-reporting or clinical judgment. Brain injury has historically been one of the most difficult conditions to evaluate in the claims context precisely because it lacks the kind of objective evidence — an X-ray showing a fracture, an MRI showing a disc herniation — that other orthopedic injuries produce. Blood-based biomarkers change that equation.

This does not mean biomarker testing will resolve all disputes. Elevated protein levels indicate brain injury but do not, by themselves, predict the duration of symptoms or the degree of functional impairment. And the science is still maturing — reference ranges, timing windows for testing, and interpretation standards are all subjects of active research. But the direction is clear: TBI evaluation is moving from subjective to objective, and the workers’ comp system will need to keep pace.

The CBI-M framework is not yet in universal clinical use. The authors describe it as a framework that will require validation and refinement before full adoption. But it is being tested at trauma centers now, it was published in one of the world’s leading neurology journals, and it carries the imprimatur of the NIH. The trajectory is unmistakable.

For further reading, the CBI-M framework was published in The Lancet Neurology in May 2025: A New Characterisation of Acute Traumatic Brain Injury: The NIH-NINDS TBI Classification and Nomenclature Initiative. The NIH-NINDS also published an accessible summary: New Framework for Classifying Traumatic Brain Injury.

On the morning of Monday, September 12, 2022, Kai-Lin Chang was riding his bicycle on Victory Boulevard in West Hills when Dr. Brittany Doremus, a palliative care physician employed by Southern California Permanente Medical Group (SCPMG), made a left turn across his path while pulling into a dry cleaner’s parking lot to drop off her children’s Halloween costumes. Chang collided with her vehicle and was hospitalized with injuries. He sued both Doremus and SCPMG, alleging Doremus was acting within the scope of her employment at the time of the accident and that SCPMG was therefore vicariously liable under the doctrine of respondeat superior.

Doremus’s work schedule was not a simple nine-to-five arrangement. On Mondays and Tuesdays she worked at her office at the Woodland Hills Medical Center. On Wednesday mornings she could work from home, on Thursday and Friday she worked with patients at the medical center’s hospital, and when on call on nights or weekends she worked from home. SCPMG also provided its physicians with employer-issued cell phones equipped with special communication software. On the morning of the accident, Doremus testified she had left home around 8:30 a.m. to drive to the office and was on a purely personal errand — dropping off the costumes — when the collision occurred. She did not recall being on any call before the accident. Following the collision she called 911, then sent a group text to the nurse and social worker on her team to cancel her appointments for the day.

SCPMG produced a text message log from Doremus’s wireless carrier showing no texts between 8:30 and 8:44 a.m., with a cluster of messages beginning at 8:44 — the post-accident notifications to her coworkers. A call log showed no work calls before the accident.

The trial court granted SCPMG’s motion for summary judgment. The court found the going and coming rule plainly applied: Doremus was commuting to work on a Monday, as she did every week, and was in the middle of a personal errand — wholly unrelated to her employment — when the accident occurred. The court found no recognized exception to the rule applied: Doremus was driving her own personal vehicle that SCPMG neither provided nor required, she was on no special errand for her employer, and SCPMG derived no incidental benefit from her use of the vehicle. The court overruled Chang’s evidentiary objections to the call and text records, noting that Chang himself had relied on those same records in his opposition. Chang appealed.

The Second District affirmed summary judgment for SCPMG in full in the published case of Chang v. Southern California Permanente Medical Group Case No. B340770 (April 2026). The court awarded SCPMG its costs on appeal. The opinion was originally filed April 9, 2026 without publication, then certified for publication on April 28, 2026, with no change in judgment.

SCPMG met its burden of proof; Chang did not meet his. The court emphasized that in respondeat superior cases involving driver testimony, an employer does not have to eliminate every conceivable possibility of work activity — sworn testimony that the driver was not working is sufficient to shift the burden. Doremus’s deposition testimony that she was commuting on a personal errand, not on a call, and driving her own vehicle accomplished exactly that. Chang then had to offer admissible contradictory evidence, and he failed to do so.

The “hybrid worker” argument failed on the facts. Chang’s more novel contention was that because Doremus sometimes worked from home, her home had become a second worksite, and her Monday morning drive was therefore transit between worksites rather than an ordinary commute — placing her within the scope of employment. The court rejected this categorically. Doremus worked at the medical center on Mondays without exception. Even accepting the premise that a home can become a second worksite, it is only a worksite when the employee is actually working from home — not as a permanent all-day status. On Monday mornings Doremus was not working from home; she was driving to the office. The court found that none of the cases Chang cited — including Wilson v. Workers’ Comp. Appeals Bd. (1976) 16 Cal.3d 181, 184, Bramall v. Workers’ Comp. Appeals Bd. (1978) 78 Cal.App.3d 151, Zhu v. Workers’ Comp. Appeals Bd. (2017) 12 Cal.App.5th 1031, and State Ins. Fund v. Industrial Commission (Utah 1964) 15 Utah 2d 363 — supported the proposition that a hybrid worker’s home is a second worksite on days when she is not working from it.

Workers’ compensation cases are the wrong measuring stick. The court also noted — pointedly, since Chang had himself argued below that workers’ compensation cases had “no applicability in tort cases” — that the going and coming rule as applied in tort is more restrictive than in workers’ compensation. Citing Pierson v. Helmerich & Payne Internat. Drilling Co. (2016) 4 Cal.App.5th 608, 619, the court observed that workers’ compensation law resolves any reasonable doubt in the employee’s favor, a policy tilt that does not carry over to third-party tort liability against employers.

Policy reinforced the holding. The court offered a final, practical observation: ruling for Chang would effectively abolish the going and coming rule for any employee who sometimes works from home, creating a perverse incentive for employers to curtail workplace flexibility to avoid expanded tort exposure. The court found no sound policy rationale for that result.

As we reported in our April 13, 2026 newsletter, Jeanette France worked as an occupational health nurse for the Los Angeles Department of Water and Power (DWP).On February 1, 2017 — less than a month after she had reported a work injury — the DWP terminated her employment. The DWP maintained that France was terminated for poor job performance that predated her injury.

France filed a civil lawsuit under the Fair Employment and Housing Act alleging disability discrimination and retaliation. In December 2019, the Los Angeles County Superior Court granted summary judgment for the DWP, finding that France was terminated for legitimate, nondiscriminatory reasons — namely, poor performance predating her injury — and that France failed to raise a triable issue of pretext.

France also filed a workers’ compensation petition alleging the DWP violated Labor Code section 132a, which prohibits employers from discharging employees for filing or threatening to file a workers’ compensation claim. After a multi-day hearing, the workers’ compensation judge denied the claim, finding that France failed to prove the termination was retaliatory in light of the performance evidence, and that she produced no evidence that those involved in terminating her even knew about her statements in the workers’ compensation meeting minutes earlier.

France sought reconsideration. The Workers’ Compensation Appeals Board (WCAB) granted the petition, reversed the judge, and found the DWP had violated section 132a. The WCAB concluded the DWP failed to carry its burden of establishing good cause for termination, emphasizing the absence of written disciplinary records, the lack of a stated reason on termination paperwork, and the fact that Dr. Israel could not recall exact dates for the performance issues she observed.

On April 8, 2026 the Court of Appeal granted the DWP’s petition for writ of review in the unpublished case of L.A. Department of Water & Power v. Workers’ Compensation Appeals Board Case No. E086551 (April 2026) and annulled the WCAB’s decision, directing the WCAB to reinstate the workers’ compensation judge’s original order denying France’s section 132a claim.

The Court of Appeal held on April 8th that the WCAB’s findings were unreasonable because the Board systematically ignored relevant evidence rather than evaluating the record as a whole. Specifically, the court identified several ways the WCAB mischaracterized the record, such as ignoring the superior court’s summary judgment order — part of the record — containing Israel’s declaration placing those issues in October and November 2016, well before the injury. The court stressed that the WCAB was free to weigh evidence and make credibility determinations, but it was not free to simply ignore evidence that cut against its conclusions.

The WCAB Petitioned the Court of Appeal for a Rehearing of the April 8 appellate decision against it. On April 27, 2026 the Court of Appeal issued and Order Denying Petition for Rehearing and Modifying Opinion [No Change in Judgment]

Footnote 2 on page 12 of the April 8, 2026 Court of Appeal decision it was noted that “At oral argument, counsel for the WCAB contended that the reporter’s transcript of the February 2025 hearing, at which both Barnett and Israel testified, was not available to the WCAB when it issued its decision. The contention is based entirely on matters outside the certified record, so we cannot consider it. (§ 5951.) The reporter’s transcript of the February 2025 hearing is part of the record of proceedings that counsel for the WCAB certified is “a full, true and correct copy of the record of proceedings (consisting of 9 volumes) before the Appeals Board in the above-entitled matter involving a claim by Jeanette France. We also note that the reporter’s transcript of the February 2025 hearing was certified by the reporter in April 2025, and the WCAB issued its decision in June 2025.”

On its own motion, the Court Ordered that the opinion filed April 8, 2026, be modified as follows. “At the end of footnote 2 on page 12, add the following paragraph:”

“The WCAB advances the same argument in its petition for rehearing, but the petition does not address or even mention the analysis in the first paragraph of this footnote. The WCAB argues that because it did not receive the reporter’s transcript before issuing its decision, we cannot rely on it.”

“But as we have explained, the WCAB’s assertion that it had not yet received the transcript when it issued its decision is based entirely on matters outside the certified record, so we are required by statute to reject it. (§ 5951 [“No new or additional evidence shall be introduced”].)”

“Again, the record certified by the WCAB contains the transcript, and we are required by statute to base our decision on the certified record. (Ibid. [“the cause shall be heard on the record of the appeals board, as certified to by it”].) In addition, as we explain post, the reporter’s transcript of the hearing is not the only evidence that the WCAB unreasonably ignored.“

“For example, the certified record contains both the order granting summary judgment in the FEHA action and excerpts of Okhanes’s deposition testimony, both of which include evidence of the problems with France’s job performance. The WCAB ignored all of that evidence, and that dereliction is not explained by the WCAB’s alleged lack of access to the reporter’s transcript of the hearing.”

“The modification does not change the judgment.”