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Tag: 2025 News

Employer’s $257K Attorney Fee Award Against Employee Affirmed

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Nick Miletak was hired to participate in Royal Coach Tours’ student driver trainee program. On the day formal classroom instruction was set to begin, Miletak showed up, handed in his resignation, and demanded compensation for time he had been available before the formal training started. Royal Coach refused but still paid him for 11 hours of classroom time he had logged during informal training.

About a week after resigning, Miletak filed a civil lawsuit against Royal Coach alleging five causes of action. After Royal Coach demurred, Miletak filed an amended complaint asserting two claims: promissory estoppel and constructive discharge. Following a court trial, judgment was entered in Royal Coach’s favor. Miletak appealed, and the Sixth District affirmed. Royal Coach then sued Miletak for malicious prosecution.

A bench trial was held on the malicious prosecution claim without a court reporter present. The trial court issued a statement of decision finding that Miletak’s prior employment action had terminated in Royal Coach’s favor, that Miletak lacked probable cause to bring the claims, that he pursued the action with malice, and that Royal Coach suffered damages. The court awarded Royal Coach $257,197.53, including punitive damages.

Miletak subsequently filed motions for a new trial, to dismiss, and to vacate the judgment. The trial court denied each one.

The Sixth District Court of Appeal affirmed the judgment in its entirety in the unpublished case of Royal Coach Tours, Inc. v. Miletak, -H052687 (May 2026). Miletak raised thirteen separate contentions on appeal; the court rejected all of them.

Miletak appealed in pro per. The court’s analysis was shaped throughout by Miletak’s repeated failure to meet basic appellate requirements — providing adequate record citations, presenting developed legal arguments, and confining his claims to matters in the record. The court invoked the principle from Jameson v. Desta (2018) 5 Cal.5th 594, 609, that the burden falls on the appellant to demonstrate error on the basis of the record presented.

On personal jurisdiction, Miletak argued the trial court lost jurisdiction when he relocated to Florida. The court held that once a trial court acquires jurisdiction over a party, that jurisdiction continues to final judgment and is not defeated by the party’s relocation, citing Goldman v. Simpson (2008) 160 Cal.App.4th 255, 263–264. Miletak’s reliance on Daimler AG v. Bauman (2014) 571 U.S. 117 was misplaced because that case addressed an entirely different question about claims by foreign plaintiffs against a foreign defendant.

On the absence of a court reporter, Miletak claimed he requested one at trial. But the settled statement, the order denying his new trial motion, and the trial court’s own statements at the settled statement hearing all indicated that no such request was made. Without record evidence of a request, the court found no error.

On the denial of a jury trial, the record showed Miletak failed to timely request a jury or demonstrate that his partial fee waiver covered jury fees. The court applied TriCoast Builders, Inc. v. Fonnegra (2024) 15 Cal.5th 766, which holds that a litigant challenging the denial of relief from a jury waiver for the first time on appeal must show prejudice — something Miletak never attempted.

On probable cause, the central substantive issue, Miletak argued that the denial of Royal Coach’s nonsuit motion in the underlying employment action conclusively established probable cause under the interim adverse judgment rule. The court disagreed. Drawing on Parrish v. Latham & Watkins (2017) 3 Cal.5th 767 and Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, the court explained that the interim adverse judgment rule applies only to rulings on the merits, not those resting on procedural or technical grounds. Here, the nonsuit motion was denied based on Miletak’s opening statement — before any evidence was presented — so the denial said nothing about the substantive merits of his promissory estoppel claim.

The court also noted that Miletak attributed a fabricated quotation to Parrish, claiming that probable cause for any single claim insulates the entire suit. The California Supreme Court has held precisely the opposite: a malicious prosecution suit may be maintained where even one of several claims in the prior action lacked probable cause. See Crowley v. Katleman (1994) 8 Cal.4th 666, 671.

On the remaining issues — evidentiary rulings, judicial bias, fraud on the court, the settled statement, denial of writ petitions, and the prior anti-SLAPP appeal — the court found each contention either unsupported by record citations, procedurally forfeited, or substantively without merit. Multiple claims were deemed waived under Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856, for failure to cite the record.

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Major Drug Maker to Pay $13.6M to Resolve Kickback Case

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Takeda Pharmaceuticals U.S.A., Inc. is the U.S. subsidiary of Takeda Pharmaceutical Company Limited, a major global biopharmaceutical company headquartered in Osaka, Japan It is one of the world’s leading R&D-driven pharmaceutical companies, with a strong emphasis on oncology, rare diseases, neuroscience, gastroenterology (and inflammation), plasma-derived therapies, immunology, and vaccines.

The company has a major presence, including its global hub and research center in Cambridge, Massachusetts (making Takeda the largest life sciences employer in the state). It has sites in 39 states and employs more than 20,000 people in the U.S. (part of ~50,000 worldwide).

Takeda Pharmaceuticals, U.S.A., Inc. has agreed to pay $13,670,921 to resolve allegations that it knowingly caused the submission of false claims to Medicare and other federal health care programs by paying kickbacks to healthcare providers to induce prescriptions of Trintellix, an antidepressant medication that Takeda marketed and sold to treat major depressive disorder.

Trintellix (vortioxetine) is a prescription antidepressant medication used to treat Major Depressive Disorder (MDD) in adults. It is marketed in the U.S. by Takeda Pharmaceuticals (in collaboration with H. Lundbeck A/S, which originally developed it).

The civil settlement resolves allegations that, from January 2014 to October 2020, Takeda paid improper remuneration, including in the form of speaker honoraria and meals at high-end restaurants, to healthcare professionals to induce them to prescribe the antidepressant medication Trintellix in violation of the Anti-Kickback Statute.

The United States contends that Takeda selected certain healthcare providers to be part of the Trintellix speaker bureau and provided them paid speaking opportunities with the intent that the speaker honoraria and meals would induce them to prescribe Trintellix. The government further contends that certain prescribers who attended multiple programs on the same topic and received meals and drinks from Takeda received no educational benefit from attending duplicate programs.

Takeda (including its subsidiaries and predecessors like TAP) has faced other False Claims Act (FCA) allegations, Medicaid fraud claims, kickback-related matters, and similar government program issues in the U.S.

– –  2001 TAP Pharmaceuticals Settlement (Lupron): Takeda’s former joint venture with Abbott (TAP) paid $875 million to resolve criminal and civil charges. Allegations included providing free drug samples to doctors who then billed Medicare/Medicaid, kickbacks, and improper pricing. This was one of the largest pharma fraud settlements at the time.

– –  In 2023 Takeda subsidiaries (along with others from the Shire acquisition) agreed to pay a combined ~$42.7 million to resolve Texas Medicaid Fraud Prevention Act claims. Allegations involved providing improper nursing/reimbursement support and paying nurse educators to recommend Vyvanse to Medicaid providers (~2014–2015). This was a whistleblower-initiated case.

Takeda paid ~$2.4 billion in 2015 to settle thousands of U.S. lawsuits alleging the diabetes drug caused bladder cancer and that risks were inadequately disclosed. Some claims involved marketing practices, but these were primarily personal injury/product liability.

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Court Finds County Liable for Losing Personnel & CalPERS Records

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Kay Marie Gibbs worked as a court reporter for the Humboldt County Superior Court for nearly 40 years, starting in June 1982. She became eligible for enrollment in the California Public Employees’ Retirement System (CalPERS) in December 1983, but the county did not enroll her until November 1989 — a gap of roughly six years.

When Gibbs began preparing for retirement in 2019, she discovered she would not receive CalPERS service credit for those early years. CalPERS told her it could not adjust her benefits without a certification from the county of her full employment history. What followed was a prolonged and fruitless effort to get the county to produce those records. Gibbs alleged that three individual employees in the county’s human resources department lost, destroyed, or failed to search for the requested records. After repeated promises, the county eventually sent CalPERS an incomplete compilation that was missing records for multiple periods spanning from 1982 to 1989.

Gibbs attempted to mitigate the damage by purchasing “prior service credit,” but she could not do so without the county’s certification of her employment history. She alleged she was forced to delay retirement and stood to lose hundreds of thousands of dollars in benefits.

Gibbs filed suit asserting four causes of action under Government Code section 815.6, each based on the county’s alleged failure to discharge a mandatory statutory duty — specifically, duties to maintain CalPERS-related records, allow inspection of personnel records, timely enroll her in CalPERS, and properly maintain employment information. She also asserted a fifth cause of action for negligence against all defendants.

The trial court sustained the county’s demurrers to all four statutory causes of action without leave to amend. It allowed Gibbs to amend only the negligence claim. She filed a second amended complaint focused on negligence, but the court sustained the demurrer to that claim as well, concluding that no statutory authority supported the duties Gibbs alleged. The court suggested that “a simple mandamus will suffice” if Gibbs wanted to review withheld records.

The First District Court of Appeal largely reversed in the partially published case of Gibbs v. County of Humboldt et al., -A173637 (May 2026). It found the trial court’s result “untenable” — that Gibbs, who alleged the county failed to enroll her in CalPERS through no fault of her own, was left without a claim because the county also lost her records through no fault of hers.

The court reversed on three of Gibbs’s causes of action. It affirmed on only one — the fourth cause of action under Government Code sections 26205 and 26205.1, which the court found authorizes destruction of certain records rather than mandating their retention.

On the personnel records claim, the court held that Government Code section 31011 and Labor Code section 1198.5 impose mandatory, nondiscretionary duties on public employers to let employees inspect their personnel records and to maintain those records for at least three years after employment ends. The court rejected the county’s argument that the Trial Court Employment Protection and Governance Act (TCEPGA), which transferred court employees from county to court employment effective January 1, 2004, extinguished its obligations. Gibbs was never terminated — she continued the same work — and the Public Employees’ Retirement Law (PERL), Government Code § 20000 et seq., itself, provides that a contracting agency’s obligations “continue through the memberships of the respective members.” (Gov. Code, § 20164, subd. (a).) The court was guided by Thornburg v. El Centro Regional Medical Center (2006) 143 Cal.App.4th 198, which found a private right of action under similar record-inspection statutes.

On the failure to enroll claim, the court held that the PERL imposes a mandatory duty on contracting agencies to timely enroll employees in CalPERS, pointing to sections 20283, 20502, 20281, and 20028. The Supreme Court had already recognized a “duty to enroll employees in CalPERS” in Metropolitan Water Dist. v. Superior Court (2004) 32 Cal.4th 491, 506. Reading the enrollment obligation as discretionary, the court said, would render the statutes’ benefits “illusory,” citing Henderson v. Newport-Mesa Unified School Dist. (2013) 214 Cal.App.4th 478, 494–495.

On the negligence claim, in the unpublished portion of the opinion, the court concluded that Gibbs stated a viable claim against the individual defendants for breaching their duties of care, and the county could be held vicariously liable under Government Code section 815.2. The court rejected the defendants’ invocations of discretionary-act immunity (§ 820.2) and the economic loss rule, finding neither applicable.

The court also rejected the argument that mandamus was Gibbs’s exclusive remedy, distinguishing Crumpler v. Board of Administration (1973) 32 Cal.App.3d 567 and Metropolitan, neither of which held that a writ is the only available path when an employee was wrongfully denied CalPERS enrollment.

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Stanford Breakthrough Could Make Knee Replacement Obsolete

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A study published in the journal Science by Stanford Medicine researchers has demonstrated something the orthopedic world has been chasing for decades: the ability to regrow cartilage that has been lost to aging or injury, using a simple injection rather than surgery. If the approach translates from the laboratory to clinical practice — and early signs suggest it may — the implications for workers’ compensation claims involving knee and hip injuries would be profound.

Osteoarthritis is the single most common joint disease in the United States, affecting roughly one in five adults. It occurs when the cartilage that cushions joints wears away, leading to pain, stiffness, and progressive loss of function. There is currently no drug that can slow or reverse the disease. Every treatment available today — anti-inflammatory medications, corticosteroid injections, physical therapy, viscosupplementation — manages symptoms. When those fail, the endpoint is surgical joint replacement.

More than one million Americans undergo knee or hip replacement surgery each year, and workplace injuries are a significant driver of the demand. Workers who sustain knee injuries — meniscus tears, ligament damage, repetitive stress injuries — are at elevated risk for developing osteoarthritis in the affected joint. Roughly half of all people who suffer an ACL tear develop osteoarthritis within 10 to 20 years of the injury, even after successful surgical repair. For workers’ compensation, that means an acute knee injury claim can evolve into a decades-long medical management case culminating in joint replacement.

The Stanford research offers the first realistic prospect of breaking that cycle. The research team, led by Drs. Helen Blau and Nidhi Bhutani, focused on a protein called 15-PGDH — classified as a “gerozyme,” an enzyme whose levels increase as the body ages and which drives the gradual loss of tissue function. Higher levels of 15-PGDH are linked to declining muscle strength, reduced bone repair, and diminished nerve regeneration in older animals. The Stanford team hypothesized that the same protein might be responsible for the cartilage loss that underlies osteoarthritis.

They were right. In aged mice, knee cartilage that had naturally thinned and deteriorated — the animal equivalent of age-related osteoarthritis — thickened and regenerated after the mice received injections of a small-molecule drug that blocks 15-PGDH activity. The treated cartilage closely resembled the cartilage of young, healthy animals.

The researchers then tested whether the treatment could prevent arthritis after a traumatic injury. They induced ACL-like knee injuries in young mice — the kind of injury that reliably leads to osteoarthritis in both mice and humans — and administered the 15-PGDH inhibitor. Untreated mice developed arthritis within four weeks. Treated mice did not. They avoided cartilage breakdown, moved more normally, and placed more weight on the injured limb.

Critically, the treatment also worked in human tissue. When the researchers applied the 15-PGDH inhibitor to human cartilage samples in the laboratory, the cartilage cells responded by shifting their gene expression toward a younger, healthier profile.

Previous attempts at cartilage regeneration have relied on stem cell transplantation — harvesting cells from one part of the body, cultivating them, and surgically implanting them into the damaged joint. These procedures are complex, expensive, and have produced inconsistent results. The Stanford approach is fundamentally different: it does not introduce new cells. Instead, it causes the existing cartilage cells — the chondrocytes already present in the joint — to change their behavior. The drug essentially reprograms aged, deteriorating cartilage cells to act like younger, healthier versions of themselves, without requiring stem cells or surgery.

The mechanism works through prostaglandin E2, a naturally occurring molecule. While prostaglandin E2 is commonly associated with inflammation and pain, the researchers found that small, controlled increases — achieved by blocking the enzyme that breaks it down — actually promote tissue regeneration rather than inflammation.

How close is this to clinical use? Closer than one might expect for a laboratory breakthrough. A version of the 15-PGDH inhibitor has already completed Phase 1 safety testing in humans for a different age-related condition — muscle weakness — and did not raise safety concerns. That existing safety data could significantly accelerate the pathway to human trials for joint applications. The researchers have indicated they are moving toward clinical trials for cartilage regeneration.

However, important caveats remain. The current results are in mice and in human tissue samples in the laboratory, not yet in human patients with osteoarthritis. The transition from animal models to human clinical practice is uncertain, and even with fast-tracked development, it would likely be several years before a treatment could reach clinical use. The therapy would also need to demonstrate that regenerated cartilage is durable and functionally equivalent to native cartilage over the long term.

Even at this early stage, the research is worth tracking for several reasons. Knee injuries are among the most common and costly workers’ comp claims. Any development that could reduce the long-term progression from acute knee injury to osteoarthritis to joint replacement has the potential to significantly alter the lifetime cost trajectory of these claims. Joint replacement surgery, with its associated surgical costs, hospitalization, rehabilitation, temporary disability, and potential complications, is one of the most expensive procedures in the workers’ comp system.

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Employers File More RICO Actions Against Plaintiff Lawyers

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Plaintiff Lawyers are now calling the RICO cases filed in several states, including California, by employers against plaintiff lawfirms for filing alleged exaggerated claims a “Very Dangerous Trend.” Ostensibly, this “trend” became of interest recently when Uber Technologies, Inc. filed three racketeering lawsuits recently against lawyers and medical providers for alleged fraudulent insurance claims, with a California lawsuit against Downtown LA Law Group et al.being the third.

The the first was filed in New York in 2025 targeting a group of lawyers and medical providers in New York for allegedly exploiting Uber’s state-mandated $1 million rideshare insurance policy to file fraudulent personal injury claims. The scheme allegedly involved directing claimants to pre-selected medical providers who produced fraudulent medical records and bills to inflate settlement demands.

The second was filed in South Florida (Uber v. Law Group of South Florida et al., Case No. 25-cv-22635-CMA) and Uber accused the defendants of staging car accidents, manufacturing damages, and pursuing unnecessary medical procedures to exploit insurance policies between 2023 and 2024.

Uber Technologies filed another lawsuit in the United States District Court for the Central District of California alleging a fraudulent scheme involving personal injury claims filed against them in California. The complaint alleges that this “scheme begins when Defendants (Igor) Fradkin, Downtown LA Law Group, Emrani, and Law Offices of Jacob Emrani identify individuals with potential personal injury claims against rideshare companies such as Uber.” And goes on to allege “Both firms aggressively pursue clients to sue Uber, as shown in this online advertisement by Emrani” which appears to be screen grab of an advertisement showing Jacob Emrani next to an UBER/Lyft logo above the words “Uber or Lyft Accident?” followed by a banner that reads “Call Jacob.com.”

Uber then alleges that a “key repeat participant in this fraud is Defendant Greg Khounganian, a spinal surgeon who owns and controls GSK Spine, an orthopedics practice. Working with personal injury coordinators at Defendant Radiance Surgery Center, a surgery center which specializes in treating patients with pending personal injury lawsuits and which also does business as Sherman Oaks Surgery Center.

Following these three RICO cases, there were more to come, with Federal Express joining as a plaintiff, when Uber Technologies and Federal Express sued Philadelphia personal injury attorney Marc Simon, his firm Simon & Simon P.C., and several medical professionals — chiropractors Ethel Harvey and Daniel Piccillo of Philadelphia Spine Associates, pain management physician Clifton Burt of Premier Pain & Rehab Center, and medical examiner Lance Yarus — under the federal Racketeer Influenced and Corrupt Organizations Act (RICO). The companies alleged the defendants ran a coordinated fraud scheme spanning dozens of lawsuits filed over the past four years in Philadelphia County courts.

According to the complaint, the scheme worked like a conveyor belt. Simon & Simon would sign up clients involved in motor vehicle accidents with Uber or FedEx drivers — clients who typically suffered minimal or no injuries and often carried limited-tort insurance. The firm then directed those clients to the same small group of medical providers. Drs. Harvey and Piccillo administered extensive chiropractic treatments and ordered MRIs that came back negative or showed only mild degenerative changes unrelated to the accidents. Despite those results, the chiropractors continued treatment at the lawyers’ direction, generating voluminous records that in some cases reflected care that was allegedly never actually delivered or was documented using cut-and-paste boilerplate.

On May 11, 2026 the court denied the defendants’ motion to dismiss in its entirety in the case of Uber Technologies v. Simon & Simon P.C., Case No. 25-5365 (E.D. Pa.) (May 2026)  allowing all of Uber’s RICO claims to proceed to discovery. Every defense raised — Noerr-Pennington immunity, res judicata, the Rooker-Feldman doctrine, and challenges to the sufficiency of the RICO allegations — was rejected at this stage.

Noerr-Pennington immunity is a common defense raised in these cases. The defendants argue their conduct was protected petitioning activity under the First Amendment. The Philadelphia court acknowledged that filing and serving lawsuits is classic petitioning activity, but held the alleged pre-filing conduct — directing doctors to create false medical records and manufacture evidence — was not “incidental” to petitioning.

Even assuming the conduct could qualify as petitioning, the court found Uber plausibly invoked the sham litigation exception. Under the series-of-petitions framework from California Motor Transportation Co. v. Trucking Unlimited, 404 U.S. 508 (1972), the allegations supported an inference the lawyers filed cases without regard to merit and to extract settlement value through the litigation process itself. The abrupt dismissal of claims once discovery threatened to expose the scheme was particularly telling.

Ford Motor Company v. Knight Law Group LLP et al., 2:25-cv-04550, was filed May 21, 2025 in the Central District of California. Plaintiff alleged that attorneys with Knight Law Group, Altman Law Group, and Wirtz Law APC submitted thousands of fictitious time entries in Lemon Law cases over the past decade to extract more than $100 million in inflated legal fees. The legal hook is California’s Song-Beverly Consumer Warranty Act (the state’s Lemon Law), which is fee-shifting — prevailing consumer plaintiffs recover their attorneys’ fees from the manufacturer.

Ford’s audit allegedly identified 34 days in which a lawyer claimed more than 24 hours of work and 66 entries showing over 20 hours in a single day, including one entry for “an ostensibly heroic but physically impossible 57.5-hour workday in November 2016.” Ford also cited instances where attorneys billed for multiple full-day depositions in different locations on the same day.

On November 24, 2025 the court granted Knight’s motions to dismiss with leave to amend. The dismissal turned on the Noerr-Pennington doctrine — the First Amendment-rooted rule shielding petitioning activity from liability. The court reasoned that Ford was attempting to impose RICO liability “for conduct connected to Defendants’ fee petitions,” and that a successful RICO claim would “quite plainly” burden defendants’ ability to seek fees for their litigation activity, since seeking fees is at least “incidental to the prosecution of the suit”. This is the same doctrinal wall the Gori firm is now invoking against J-M, and the same wall that defeated parts of J-M’s earlier suit against Simmons Hanly Conroy.

Ford did not appeal; it pivoted. In an amended complaint filed January 5, 2026, Ford withdrew its RICO claims against Knight Law Group as an entity, along with Altman Law Group, Wirtz Law APC, and several attorneys and a former paralegal, and instead strengthened its case against three individual attorneys formerly associated with Knight Law — founding partner Steve B. Mikhov, managing partner Roger Kirnos, and partner Amy Morse — alleging perjury and obstruction of justice for submitting false statements to courts about how legal fee records were created.

And another case recently filed case by a California employer adds asbestos claims instead of Uber type automobile type litigation. J-M Manufacturing (the Los Angeles-based pipe maker that does business as JM Eagle) filed its federal RICO complaint against The Gori Law Firm on January 29, 2026 in the U.S. District Court for the Southern District of Illinois, asserting claims under RICO along with common-law fraud, unjust enrichment, and civil conspiracy. It’s based on information from a “whistleblower” attorney who formerly worked at the Gori firm.

J-M accuses the Gori firm of establishing a “bounty” system since at least 2018, in which “depo attorneys” who took clients’ depositions could earn up to 2% of total settlement proceeds if they successfully coached clients to testify they were exposed to J-M’s (and other companies’) products. The complaint alleges depo attorneys were trained to tell plaintiffs that even if they couldn’t recall the products, “the Gori Firm had done lots of research, and based on their research, the plaintiff was exposed to the products of the defendants recommended for inclusion by the attorney” Gori named J-M in more than 400 asbestos lawsuits since 2018, mostly in Madison and St. Clair counties in southern Illinois.

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Sutter Health Resolves ERISA Class Action for $4.3M

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A class action under ERISA was filed U.S. District Court for the Eastern District of California on behalf of participants and beneficiaries of the Sutter Health 403(b) Savings Plan. The claims alleged breaches of fiduciary duty in the management of the retirement plan.The case was filed in 2020 (case number 1:20-cv-01007). The class was certified by stipulation on January 26, 2024.

Specifically the Plaintiffs allege that Defendants breached their fiduciary duties of prudence and loyalty under ERISA by retaining underperforming funds with excessive fees, instead of offering less expensive, readily available prudent alternative investments. Specifically, Plaintiffs assert Defendants were imprudent in offering the Fidelity Freedom Funds target date series, the Parnassus Core Equity Fund, the Dodge & Cox Stock Fund, and the Lazard Emerging Markers Equity Fund. Plaintiffs also argue that Plan participants paid excessive recordkeeping and administrative fees and the Plan’s total plan cost was too high.

This case falls within a large wave of ERISA excessive-fee lawsuits targeting 403(b) retirement plans at nonprofit hospital systems and universities — cases that accelerated after the Supreme Court’s 2015 decision in Tibble v. Edison International 135 S.Ct. 1823 (2015) 575 U.S. 523, which clarified fiduciaries’ ongoing duty to monitor plan investments. The Uniform Prudent Investor Act confirms that “[m]anaging embraces monitoring” and that a trustee has “continuing responsibility for oversight of the suitability of the investments already made.” § 2, Comment, 7B U.L.A. 21 (1995) (internal quotation marks omitted).”

These are the standard categories of claims in the 403(b) excessive-fee litigation wave, and the Sutter Health case fits squarely within that pattern. Similar cases were filed against Dignity Health, Providence Health, Kaiser Permanente, and many other large nonprofit health systems during the same period.

A settlement was reached through mediation with an experienced neutral mediator, after the parties had sufficient information to evaluate the case’s settlement value.The fairness hearing was held April 10, 2026, and final approval was entered May 11, 2026 by Judge Lee H. Rosenthal.

The Settlement Class includes all participants and beneficiaries of the Plan at any time during the Class Period, including beneficiaries of deceased participants and Alternate Payees under QDROs. Excluded are Sutter Health itself, the Defined Contribution Oversight Committee, the Board of Directors, and their individual members and beneficiaries.

The Settlement Amount was $4,300,000. The court found this amount fair, reasonable, and adequate given the costs, risks, and delay of continued litigation. Distribution requires no claim filing for participants with active accounts; former participants without active accounts need only submit a modest claim form.

The court awarded Class Counsel attorneys’ fees of $1,433,333.33 (approximately one-third of the settlement fund), plus applicable interest and litigation expenses. Class Representatives were awarded $12,500 each as compensatory awards for costs and expenses related to their representation of the class. All amounts are payable from the settlement fund within 35 business days of the Effective Date.

Upon entry of the order, all class members fully and permanently release the Defendant Released Parties from all Released Claims, regardless of whether a class member received notice, filed a claim, objected, or received any monetary benefit.

The court retains exclusive jurisdiction over disputes related to the settlement’s performance, interpretation, or enforcement. If the Settlement Agreement is terminated, the order becomes void and the case reverts to its pre-settlement status. The Settlement Administrator has final authority over allocation decisions, and unresolved distribution questions for active account holders are referred to the Plan’s fiduciaries.

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SCIF Prevails in 20 Year Long Employer Premium Audit Litigation

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What began as a routine workers’ compensation insurance premium audit mushroomed into a 20-year dispute that wound through nine separate decisionmaking bodies, including two state appellate courts, two federal courts, and a bankruptcy court. At its core, the case asked a deceptively simple question: did nurse-staffing agency ReadyLink Healthcare, Inc. owe State Compensation Insurance Fund (SCIF) an additional $555,327.53 in premiums for the 2005 policy year?

ReadyLink operated by paying its nurses wages far below the California average — in many cases just above minimum wage at $6.75 per hour — while supplementing their pay with large, tax-free daily “per diem” payments. Under workers’ compensation insurance, premiums are calculated based on payroll. If per diem payments counted as payroll, ReadyLink owed more in premiums. For five consecutive policy years (2000–2004), SCIF’s auditors reviewed ReadyLink’s records, which openly disclosed the per diem program, and said nothing. Then, during the 2005 audit, a SCIF auditor — who had never seen an agency pay more than 50 percent of compensation in per diem form — demanded documentation. ReadyLink provided none. SCIF included the per diem payments in payroll and invoiced ReadyLink for $555,327.53 in additional premiums.

ReadyLink refused to pay and challenged the audit through a cascade of proceedings. An administrative law judge (ALJ) ruled against it, finding the per diem payments did not qualify for exclusion from payroll under the California Workers’ Compensation Uniform Statistical Reporting Plan (USRP), because ReadyLink had paid nurses without verifying whether they actually incurred duplicate living expenses — and, notably, 108 of its 257 nurses lived within 20 miles of their job assignments, with 11 living in the same zip code.

The Insurance Commissioner adopted the ALJ’s decision as precedential. The Los Angeles County Superior Court denied writ review. The Second District Court of Appeal affirmed in ReadyLink Healthcare, Inc. v. Jones (2012) 210 Cal.App.4th 1166. A federal class action was dismissed on abstention grounds, and the Ninth Circuit affirmed that dismissal in ReadyLink Healthcare, Inc. v. State Compensation Insurance Fund (9th Cir. 2014) 754 F.3d 754.

Still, ReadyLink did not pay. SCIF filed a breach of contract action in Riverside County Superior Court in 2015. In defending that suit, ReadyLink made a significant discovery: the prior proceedings had all assumed that the USRP governed premium calculation, but ReadyLink claimed that SCIF had filed its own “rate deviation” with the Insurance Commissioner that set a different — and ReadyLink argued more lenient — standard for excluding per diem payments from payroll.

Under the SCIF rate filing, per diem could be excluded if based on “actual or documented expenditures” of a type not normally assumed by an employee, rather than the USRP’s requirement that expenditures be “reasonable” and supported by records showing the employee worked at a location requiring additional expenses. ReadyLink argued its payments qualified because they tracked IRS federal CONUS reimbursement tables. In 2020, the Fourth District reversed an earlier judgment on the pleadings, holding in State Compensation Insurance Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422 that the amount actually owed had never been fully litigated and that ReadyLink was entitled to present its defenses at trial.

When the case returned to the Riverside County Superior Court, the court navigated a thicket of pretrial motions. It denied SCIF’s motion for summary judgment, finding a triable issue on ReadyLink’s estoppel defense, but granted summary adjudication dismissing ReadyLink’s fraud and Insurance Code section 381 defenses. It sustained demurrers to ReadyLink’s amended cross-complaint on all claims except breach of contract. It then granted motions in limine and a bifurcation motion that excluded evidence about the SCIF rate filing from the jury trial, sent SCIF’s breach of contract claim and ReadyLink’s waiver defense to the jury, and reserved ReadyLink’s estoppel defense for post-verdict determination.

At trial, SCIF presented two witnesses — a 30-year premium collection specialist and an independent certified public accountant — who each confirmed that the $555,327.53 additional premium had been correctly calculated. ReadyLink did not rebut the testimony and affirmatively stipulated that the mathematical calculations were correct. The jury was instructed that it could not revisit the determination that per diem payments constituted payroll. Both opening and closing arguments by ReadyLink’s counsel framed the sole remaining question as whether SCIF had waived its right to collect the additional premium by accepting ReadyLink’s exclusion of per diem payments in the five prior policy years.

The jury answered “No” on waiver — against ReadyLink — but then awarded zero damages. After the verdict, the trial court also found against ReadyLink on its estoppel defense. SCIF moved for judgment notwithstanding the verdict (JNOV) and for a new trial. The court granted both motions and entered an amended judgment awarding SCIF $555,327.53.

The Fourth District Court of Appeal affirmed the amended judgment in favor of SCIF in the unpublished case of State Compensation Insurance Fund v. ReadyLink Healthcare, Inc., Case No. D083359 (May 2026).

1. Exclusion of the SCIF Rate Filing Evidence. ReadyLink argued the trial court committed reversible error by excluding evidence about SCIF’s rate filing and by dismissing its rate-filing-based defenses and cross-claims before trial. The court disagreed. Even accepting ReadyLink’s interpretation of the rate filing’s “documented expenditures” standard as permitting reliance on CONUS tables, the ALJ had already found — in findings affirmed through multiple prior proceedings — that ReadyLink had made no effort to ascertain the distance between nurses’ homes and their job assignments and had kept no documentation of how per diem funds were actually spent. The court concluded that “documented,” however broadly construed, cannot mean blanket, per-employee application of CONUS table amounts without any individualized record-keeping to verify eligibility. Because the factual deficiencies were the same under either standard, the exclusion of rate-filing evidence was not prejudicial.

2. The JNOV Was Proper. The court applied the well-established standard that JNOV is appropriate when no other reasonable conclusion is legally deducible from the evidence — citing In re Lances’ Estate (1932) 216 Cal. 397, 400. The analysis was straightforward: SCIF presented unrebutted expert testimony that the additional premium owed was $555,327.53; ReadyLink stipulated to the accuracy of the calculations; the jury rejected ReadyLink’s only liability defense (waiver); the trial court rejected the remaining defense (estoppel); and no other defenses remained. Under those circumstances, a jury verdict of zero damages was unsupportable. ReadyLink’s argument — that SCIF suffered no “real” harm because it could have chosen not to collect the premium or could have enforced its rights only prospectively — misunderstood contract damages law. Once a breach is established and defenses are defeated, the measure of damages is the benefit of the bargain: the full amount promised under the contract. SCIF was owed $555,327.53, and nothing in the record supported any other figure.

3. New Trial Order Was Moot. Under Code of Civil Procedure section 629, subdivision (d), a new trial order entered alongside a JNOV takes effect only if the JNOV is reversed on appeal. Because the court affirmed the JNOV, the new trial order never took effect, and ReadyLink’s challenge to it was moot.

SCIF is entitled to costs on appeal. A separate appeal concerning $907,998.38 in prejudgment interest awarded by the trial court remains pending as Case No. D086045.

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WCAB Arbitrator Held to Same Procedural Standards as WCJ

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Antonio Guzman worked as a rebar ironworker for Harris Rebar Northern California for approximately 25 years. The work was physically grueling by any measure — Guzman testified that his daily duties amounted to carrying and bending tons of rebar, with individual rods sometimes weighing over 100 pounds. He filed a workers’ compensation claim for continuing trauma injuries sustained over that career, alleging damage to his low, thoracic, and cervical spine, bilateral knees, shoulders, hips, wrists, a psychiatric injury, and hearing loss.

The case was tried before a workers’ compensation arbitrator (WCA). The employer’s insurer, BITCO Insurance/Old Republic General Insurance (administered by Gallagher Bassett Services), presented a report of a QME, Dr. Charles Xeller, who found injury limited to the left knee, low back, neck, and bilateral shoulders. Guzman was evaluated by his own physicians, Dr. Henri and Dr. Newton (an agreed medical evaluator in neurology), who found a broader range of industrial injuries consistent with his complaints. On the question of vocational rehabilitation and permanent disability, the defense argued that Guzman possessed transferable skills — pointing to his claimed GED, bilingual ability, and smartphone use — and that apportionment to non-industrial factors was appropriate, including a 40% apportionment of his hearing loss to age-related presbycusis.

On January 15, 2026, the arbitrator issued a Findings and Award in Guzman’s favor on virtually every disputed issue. The arbitrator found: (1) all claimed body parts, including the thoracic spine, right knee, bilateral hips, bilateral wrists, and psychiatric injury, were industrially caused; (2) permanent disability was 100%; (3) there was no valid apportionment to non-industrial factors; (4) Guzman was entitled to future medical care; (5) outstanding medical bills were the defendant’s responsibility; and (6) his attorney was entitled to a 15% fee.

The defendants Petitioned for Reconsideration. In his Report on Reconsideration, the arbitrator was plainly skeptical of the defense’s position, describing as absurd the notion that 25 years of heavy ironwork would injure only selected body parts and not others. He also dismissed the defense’s transferable-skills arguments point by point: Guzman’s claimed GED was unsupported by any certificate or documentation; his “bilingual” ability amounted to a limited capacity to understand — not speak — English; his smartphone use consisted of making calls and playing games downloaded by his daughter; and when defense counsel asked whether his job required critical thinking, Guzman answered that when you spend hours carrying rebar on your shoulders, “I don’t think you need too much thinking.” The arbitrator recommended that reconsideration be denied.

The Workers’ Compensation Appeals Board granted the defendant’s Petition for Reconsideration in the panel decision of Guzman v. Harris Rebar Northern California; BITCO Insurance/Old Republic General Insurance, -ADJ12909831; -ADJ12910091 (May 2025). However the WCAB panel expressly stated that this was not a final decision on the merits. The Board deferred issuance of a final decision pending further review of the record and applicable law.

The Board’s decision to grant reconsideration rested on procedural and record-completeness grounds, not on any disagreement with the arbitrator’s substantive findings.

The central reason for granting reconsideration was that the arbitration record forwarded to the Board was materially incomplete. Citing WCAB Rule 10914 (Cal. Code Regs., tit. 8, § 10914(c)), the Board identified five categories of required documents that were missing: minutes of the arbitration proceedings; pleadings, briefs, and responses filed by the parties; a clear identification of exhibits offered and any objections thereto; the parties’ stipulations and the issues submitted for decision; and the arbitrator’s summary of evidence with evidentiary rulings. Only the transcript of the November 18, 2025 hearing had been received.

The Board emphasized that meaningful review of an arbitrator’s decision requires an “ascertainable and adequate record,” including an orderly identification of what evidence was submitted, admitted, or excluded — relying on Lewis v. Arlie Rogers & Sons (2003) 69 Cal.Comp.Cases 490, 494, and Hamilton v. Lockheed Corporation (2001) 66 Cal.Comp.Cases 473, 476 (Appeals Board en banc). Without such a record, the Board stated it could not evaluate whether the arbitrator’s findings were supported by substantial evidence, the governing standard under Braewood Convalescent Hospital v. Workers’ Compensation Appeals Board (Bolton) (1983) 34 Cal.3d 159, 164 [48 Cal.Comp.Cases 566], and Escobedo v. Marshalls (2005) 70 Cal.Comp.Cases 604, 621 (Appeals Board en banc).

The Board underscored that administrative efficiency cannot come at the cost of due process, citing Fremont Indemnity Co. v. Workers’ Compensation Appeals Board (1984) 153 Cal.App.3d 965, 971 [49 Cal.Comp.Cases 288], and Ogden Entertainment Services v. Workers’ Compensation Appeals Board (Von Ritzhoff) (2014) 233 Cal.App.4th 970, 985 [80 Cal.Comp.Cases 1]. Every party seeking reconsideration is entitled to a meaningful, de novo consideration of the merits based on the evidentiary record and applicable law.

Finally, the Board noted that granting reconsideration has the effect of reopening the entire record — not just the issues raised in the petition — citing Great Western Power Co. v. Industrial Accident Commission (Savercool) (1923) 191 Cal. 724, 729 [10 I.A.C. 322]. The Board retains full authority under Labor Code section 5803 to rescind, alter, or amend any order or award for good cause at any time.

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Huntington Park Doctor Resolves False Claim Act Case for $6.7M

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A Huntington Park-based medical practice and its physician have agreed to pay more than $6.73 million to resolve allegations that they violated the False Claims Act by submitting false claims for medically unnecessary vascular interventional procedures on 20 Medicare beneficiaries.

The United States alleged that, from 2016 to 2024, Dr. Feliciano Serrano of Serrano Kidney & Vascular Access Center performed medically unnecessary dialysis access interventions, including angioplasty and stent procedures, on 18 patients, purportedly to treat stenosis in patients’ dialysis segments.

Dr. Serrano scheduled interventions on a routine basis, without waiting for complications to present, and he frequently repeated procedures on patients every few days or weeks despite that the procedures were not effective and did not result in any clinical benefit. One Medicare patient received approximately 42 stents in the dialysis segment between 2016 and 2023, including during a period when Dr. Serrano informed the patient he did not need dialysis.

The United States also alleged that from 2019 to 2024, Dr. Serrano performed medically unnecessary peripheral artery disease interventions, including stent and atherectomy procedures, on 17 patients, purportedly to treat stenosis in patients’ legs. Dr. Serrano performed interventions on patients who had only mild or no stenosis and who had only minor symptoms.

Although patients complained of pain only in one leg, he performed procedures on both legs and then repeated procedures on both legs every few months. Dr. Serrano told patients that if they did not receive the procedure, their legs would need to be amputated, when, in fact, there was little risk of amputation for mildly symptomatic peripheral artery disease. One Medicare patient received approximately 16 atherectomies in his legs between 2019 and 2023.

The United States alleged that across both categories of procedures, Dr. Serrano performed interventional procedures on vessels that did not qualify for treatment under accepted standards of medical practice; overstated the degree of stenosis to make the procedures appear to meet generally recognized medical standards when, in fact, they did not; falsely documented patient symptoms and conservative therapy measures in medical records to justify the procedures; and performed procedures in excess of accepted standards of medical practice.

As a result of the settlements, Dr. Serrano will pay nearly $6.51 million to the United States and nearly $229,000 to the State of California.

The civil settlement includes the resolution of claims brought by Lincoln Analytics, Inc. under the qui tam or whistleblower provisions of the False Claims Act. Under the act, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States and State of California ex rel. Lincoln Analytics, Inc. v. Dr. Feliciano Serrano, et al., Civil Action No. 23-cv-04178 (C.D. Cal.).  Lincoln Analytics, Inc. will receive approximately $976,000 as its share of the federal recovery.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the United States Attorney’s Office for the Central District of California, and the California Department of Justice, with assistance from the Department of Health and Human Services, Office of Inspector General.

Assistant United States Attorney Karen Y. Paik of the Civil Frauds Section and Justice Department Trial Attorney Tiffany L. Ho of the Civil Division’s Commercial Litigation Branch, Fraud Section handled this case.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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Jury Convicts Bay Area Man of Insurance Fraud After 7 Day Trial

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A federal jury convicted Colin Jackson of conspiracy to commit wire fraud, wire fraud, and money laundering. The jury’s verdict followed a seven-day trial before U.S. District Judge Trina L. Thompson.

The jury found that Jackson conspired with others, including a previously convicted defendant, Kirill Afanasyev, to defraud an automobile insurance company concerning the submission of a fraudulent insurance claim on an already-wrecked car in 2018.

According to court documents and the evidence presented at trial, Jackson, 39, of San Francisco, obtained an insurance policy on an undrivable car in June 2018. He made a number of misstatements in his application for that policy, including regarding his estimated annual mileage on the car.

Five months later, in November 2018, Jackson and Afanasyev worked together to submit a fraudulent claim concerning a fake accident to the insurer. Unaware it had insured a wrecked car, the defrauded automobile-insurance company approved the claim and paid Jackson about $27,000—the insurer’s estimate of the replacement value of the car, which had been titled in Jackson’s name.

The 2018 fraud followed a similar scheme in 2017, when Jackson and Afanasyev obtained a payout from the insurer of approximately $30,000 on another already-wrecked car titled in Jackson’s name.

United States Attorney Craig Missakian, FBI Acting Special Agent in Charge Matthew Cobo, and IRS Criminal Investigation (IRS-CI) Oakland Field Office Special Agent in Charge Linda Nguyen made the announcement.

Jackson is next scheduled to appear before Judge Thompson for sentencing on September 25, 2026.

With the jury’s verdict against Jackson, more than a dozen defendants have either pleaded guilty or been convicted at trial as part of an ongoing federal investigation into automobile insurance frauds and an unrelated arson conspiracy involving an overlapping defendant, Jose Badillo, who previously pleaded guilty to participating in both parts of the scheme.

Operation Hammer Down was a federal investigation into automobile-insurance frauds orchestrated by Afanasyev and Badillo, the former owner of Jose’s Towing, Auto Towing, and Specialty Towing. In total, Afanasyev, Badillo, and others submitted and conspired to submit more than 50 fraudulent insurance claims that caused in excess of $1.5 million dollars in losses to automobile insurance companies.

Operation Hammer Down also concerned arsons orchestrated by Badillo, who sought to impede his competitors’ business prospects to exact revenge against them for perceived wrongs. For his role in the arson campaign, Badillo was sentenced in February 2026 to 60 months in custody by U.S. District Judge Rita F. Lin.

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