Tag: 2025 News

California Insurance Company provided worker’s compensation insurance to businesses. Eighty-five percent of its business is in California. In 2011 it patented a “Reinsurance Participation Agreement” (RPA). The RPA was designed to allow an insurer to offer a retrospective rating policy to small and medium-sized companies. The RPA would accomplish this by having an employer take out a guaranteed cost policy, then the insurer would cede some of the insured risk to a reinsurer, such as a captive reinsurer, together with a portion of the premium. The reinsurer would then enter into a side agreement with the policyholder to cede some of that risk back to the policyholder. At the end of the policy period, the reinsurer would refund some of the premiums to the policyholder if the losses were lower than expected or charge the policyholder more if the losses were higher.

Under a program called EquityComp, CIC followed this template and issued guaranteed cost policies that had been submitted to the rating organization for the commissioner’s approval. CIC had its affiliate, Applied Underwriters Captive Reinsurance Assurance Company (AUCRA), reinsure some of the risk and issue the side agreements to the policyholders, which were not submitted for the commissioner’s approval.

Beginning in 2012, 68 EquityComp policyholders filed various claims or actions challenging the RPA. In a 2016 ruling in one of those challenges, the commissioner found that the RPA constituted a misapplication of CIC’s filed rates in violation of Insurance Code § 11737. (Matter of Shasta Linen Supply, Inc., Insurance Commissioner (June 22, 2016) No. AHB-WCA-14-31 (Shasta Linen).) The decision declared that CIC’s failure to file and secure approval of the RPA as required by section 11658 rendered it void as a matter of law. CIC petitioned for review of Shasta Linen in Los Angeles Superior Court, and in 2017 the parties settled their dispute. The parties agreed they had a good faith dispute about whether the RPA was void as a matter of law and the remedy authorized by the Insurance Code. A recital to the agreement stated that this dispute was “ultimately for the courts to decide.”

Litigation on the other RPA claims and actions policyholders had filed against CIC continued in California courts, federal courts, administrative proceedings before the commissioner, and in arbitration. CIC succeeded in defeating class certification motions. (E.g., National Convention Services, LLC v. Applied Underwriters Capital Risk Assurance Co. (S.D.N.Y. July 27, 2019, No. 15cv7063) 2019 WL 3409882, at *1; Shasta Linen Supply, Inc. v. Applied Underwriters, Inc. (E.D.Cal. Apr. 17, 2019, Nos. 2:16-cv-158-WBS AC, 2:16-cv-1211 WBS AC) 2019 WL 3244487, at *2.) One federal court granted CIC and its affiliates summary judgment on claims that the RPA violated the Unfair Competition Law because it was void. (Pet Food Express, Ltd. v. AUI (E.D.Cal. Sept. 12, 2019, No. 2:16-cv-01211 WBS AC) 2019 WL 4318584, at *2, *4.)

As of January 2019, Berkshire Hathaway, Inc. (Berkshire Hathaway) indirectly owned 81 percent of CIC and its affiliates. Berkshire Hathaway agreed that month to sell its shares to Steven Menzies, CIC’s president and chief operating officer, who already owned 11.5 percent of the company. The agreement allowed Berkshire Hathaway to retain a $50 million breakup fee if the transaction did not close by September 30, 2019.

In April 2019 Menzies submitted an application to the department for approval of the transaction. After the commissioner found Menzies’ first two applications insufficient Menzies submitted a third on September 7, 2019. The department informed CIC that it could neither approve nor disapprove CIC’s application by September 30. Berkshire Hathaway required $10 million for an extension of the transaction deadline until October 10, 2019.

Menzies then proposed and the New Mexico Office of the Superintendent of Insurance agreed to hold an expedited approval process to re-domesticate CIC in New Mexico by merging CIC into a newly formed New Mexico corporation, CIC II. The New Mexico superintendent approved the merger, conditioned on the stock transactions between Menzies and Berkshire Hathaway closing by October 10, 2019.

CIC II satisfied the New Mexico superintendent’s conditions for approval, so the merger of CIC with CIC II would be completed by filing a certificate of merger with the California Secretary of State. (Corp. Code, § 1108, subd. (d).) On October 22, 2019, the department asked CIC by telephone not to file the certificate of merger with the California Secretary of State so that the parties could meet and resolve their issues. CIC agreed, but the parties never met.

On November 4, 2019, without notice to CIC, the commissioner filed an ex parte application to be appointed conservator of CIC. In January 2020, CIC unsuccessfully moved to vacate the conservatorship. CIC II and an affiliate of CIC filed federal actions seeking to vacate the conservatorship and enjoin it. (Applied Underwriters, Inc. v. Lara (E.D.Cal. 2021) 530 F.Supp.3d 914; California Ins. Co. v. Lara (E.D.Cal. 2021) 547 F.Supp.3d 908.) The district courts dismissed both suits, and the Ninth Circuit Court of Appeals affirmed. (Applied Underwriters, Inc. v. Lara (9th Cir. 2022) 37 F.4th 579, 600.)

In October 2020, the commissioner filed an application for approval of a rehabilitation plan, which would end the conservatorship. CIC opposed the settlement provision in section 2.6 of the plan. The trial court approved the plan in April 2024. CIC appealed and also filed a petition for writ of mandate challenging the approval of the plan. This court summarily denied the petition in a one-paragraph order, noting that CIC had failed to demonstrate that its remedy on appeal was inadequate. (Cal. Ins. Co. v. Superior Court (June 20, 2024, A170573).)

With regard to the CIC appeal, the Court of Appeal found no merit in any of CIC’s arguments and affirmed the trial court’s order in the published case of Insurance Commissioner of the State of California v. California Insurance Company et al. – A170622 (July 2025)

Multiple news outlets, including PBS, The Washington Post, and The Associated Press, reported that the U.S. Department Of Labor is aiming to rewrite or repeal over 60 workplace regulations. These reports cite a statement from Secretary of Labor Lori Chavez-DeRemer, describing the initiative as the “most ambitious proposal to slash red tape of any department across the federal government.”

The proposed changes cover regulations like minimum wage requirements for home health care workers, standards for exposure to harmful substances, and safety procedures in industries such as construction and mining. The goal, according to the DOL, is to reduce costly and burdensome rules to align with President Donald Trump’s deregulation agenda.

While the exact list of all 60+ changes is not fully detailed in available sources, several significant proposals have been highlighted across reports for their potential impact on workers and industries. The following are notable among the proposed changes.

– – Reversal of Minimum Wage and Overtime Protections for Home Health Care Workers: The proposal would reverse 2013 regulations under President Barack Obama, reverting to a 1975 framework. This could allow an estimated 3.7 million home health care workers to be paid below the federal minimum wage ($7.25/hour) and lose eligibility for overtime pay in states without equivalent protections.

– – Elimination of Retaliation Protections for Migrant Farmworkers: The DOL proposes to reverse a 2024 rule protecting H-2A migrant farmworkers from retaliation for actions like filing complaints or participating in investigations. It also includes rescinding a requirement for seat belts in employer-provided transportation for agricultural workers.

– – Removal of OSHA’s Construction Site Lighting Requirement: The Occupational Safety and Health Administration (OSHA) plans to rescind a rule mandating adequate lighting at construction sites, arguing it doesn’t significantly reduce risks. OSHA would rely on its “general duty clause” to address lighting deficiencies.

– – Limiting OSHA’s Authority in High-Risk Entertainment and Sports:OSHA proposes to limit its “general duty clause” from penalizing employers for injuries or deaths in “inherently risky” activities like movie stunts, animal training, or sports (e.g., NFL punt returns, NASCAR racing). The DOL argues Congress didn’t intend OSHA to regulate such activities.

– – Reduction of Mine Safety and Health Administration (MSHA) Oversight: The proposal would strip MSHA district managers of authority to mandate improvements to mine ventilation or roof collapse prevention plans, arguing this oversteps Congressional intent by allowing unelected officials to create rules without public comment.

– – Repeal of Affirmative Action Requirements for Apprenticeships: The DOL plans to eliminate affirmative action requirements for apprenticeship programs, which aimed to increase diversity and inclusion in training opportunities.

These changes stand out due to their broad reach across industries (healthcare, agriculture, construction, mining, entertainment), their potential to affect millions of workers (e.g., 3.7 million in home care), and their implications for safety, wages, and worker protections. Critics, including labor unions and advocacy groups, argue they disproportionately harm vulnerable populations like women, minorities, and migrant workers, citing increased risks of injury, death, or exploitation. Supporters, including conservative groups and industry leaders, argue they reduce compliance costs and foster economic growth.

The 60+ proposals require public comment periods and further stages before implementation, meaning they’re not yet written, published and finalized.

Uber Technologies filed a lawsuit yesterday 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, Khounganian accepts referrals from lawyers who have cases against Uber with the understanding that he will perform specific acts to increase the value of their lawsuits and/or claims.”

Uber futher alleges “Both he and Radiance Surgery Center conceal their secret side agreements with the referring lawyers to discount such liens. To increase his desirability as a referral source for the lawyers, Khounganian produces fraudulent records of medical necessity and/or causation that he transmits to the lawyers for the purposes of artificially inflating claimed amounts. These lawyers include Defendants Igor Fradkin and his law firm, Downtown LA Law Group, as well as Jacob Emrani and his law firm, Law Offices of Jacob Emrani.”

Allegedly “Many of Fradkin’s and Emrani’s clients actually have health insurance. But to maximize their eventual recovery in their fraudulent lawsuits, Fradkin and Emrani steer these claimants away from medical providers who would bill their health insurance. Instead, these claimants are directed to specified medical providers, selected by the attorneys, who bill on a lien basis pursuant to a kickback scheme, in which certain medical providers agree to surrender their lien rights in exchange for a steady supply of claimants from the lawyers. “

And “These medical providers then generate bills for their services at above- market, artificially inflated rates that they send to Fradkin, Emrani, and their respective law firms for insurance claims and for use in the litigation against Uber and other targets of the scheme.”

Uber seeks restitution of funds obtained through the scheme, treble damages, costs, and attorneys’ fees under RICO (18 U.S.C. § 1964(c)), equitable relief, including injunctions, disgorgement, and appointment of a monitor or receiver to prevent further violations, punitive damages and prejudgment interest. The lawsuit was filed on July 21st by Perkins Coie LLP.

Uber Technologies, Inc. has filed three racketeering lawsuits in 2025 against lawyers and medical providers for alleged fraudulent insurance claims, with this 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.

All three lawsuits allege a similar pattern where personal injury lawyers and medical providers collude to inflate claims by directing claimants to providers who perform unnecessary treatments or produce fraudulent medical records. These claims target Uber’s mandatory $1 million liability insurance, leading to inflated settlements or lawsuits.

As directed by the Joint Legislative Audit Committee, the office of the California State Auditor conducted an audit of the Division of Occupational Safety and Health (Cal/OSHA) and its efforts to enforce health and safety standards that protect California’s nearly 20 million workers.

It reviewed 60 case files that Cal/OSHA handled from fiscal years 2019–20 through 2023–24 and reported that it found deficiencies in Cal/OSHA’s enforcement processes and staffing levels that may undermine some of California’s workplace protections.

In a letter sent to the Governor and Legislative Leaders by Grant Parks, the California State Auditor said that in general “Cal/OSHA did not demonstrate that it had sufficient reasons for closing some workplace complaints and accidents without conducting an on-site inspection.” In nine of the 30 uninspected complaints it reviewed it questioned Cal/OSHA’s rationale for deciding not to inspect “because the case files lacked evidence to support that Cal/OSHA had complied with its own policies. Some accident cases also lacked support for Cal/OSHA’s decision not to inspect.”

Parks wrote that his office also “observed some critical weaknesses among the on-site inspections that Cal/OSHA did conduct. It reported that Cal/OSHA did not consistently document effective reviews of employers’ injury and illness prevention programs,” causing the Auditor to question whether it may have overlooked potential violations in some instances.

“When Cal/OSHA identified hazards and cited employers for violations, it did not always document that those employers had abated the hazards. Furthermore, the fines that Cal/OSHA assessed employers were sometimes less than the violations may have warranted, and Cal/OSHA often did not document a clear rationale for further reducing fines in post-citation negotiations with employers.”

“Cal/OSHA’s process deficiencies and staffing shortages are root causes for many of the concerns we identified. Cal/OSHA has left key policy documents unrevised for years, conducted internal audits inconsistently, and relied on paper-based case files. Cal/OSHA had a 32 percent vacancy rate in fiscal year 2023–24 and even higher vacancy rates in many of its district offices, significantly limiting its ability to protect workers.”

Katrina S. Hagen, Director Department of Industrial Relations, responded to the report. “Prior to the audit commencing, many positive changes were in progress. The recommendations in the audit align with these ongoing efforts.”

“Understaffing contributed to several of the findings identified in the audit. In recent years, DIR has been working to address structural and process issues, as well as recruitment and retention issues, that have contributed to staffing shortages at Cal/OSHA.”

“One challenge with recruiting Associate Safety Engineers is the lack of candidates with safety knowledge, skills, abilities and experience – especially in the geographic locations Cal/OSHA needs them in. To address this gap, we broadened our search to include entry-level positions, offer on-the-job training, and created partnerships with educational institutions to help develop the skills needed for the job. “

“Findings related to the enforcement branch’s onsite inspections were largely based on deficiencies in case files. Cal/OSHA is working to immediately address these deficiencies through training.”

“Furthermore, Cal/OSHA is prioritizing the modernization and automation of its data management system, which we anticipate will reduce documentation failures and other deficiencies identified in the audit. Cal/OSHA is the largest state-run OSHA program in the country, yet the division lags behind other states in terms of technology and automation. Currently, Cal/OSHA uses the Federal Occupational Safety and Health Information System (OIS), which does not meet our state-mandated needs, and we still rely heavily on paper case files to capture many California requirements not captured in OIS. The limitations of this system were especially felt during the pandemic when Cal/OSHA received a record number of complaints and had challenges accessing information on our enforcement activities.”

Gilead Sciences, Inc. is an American biopharmaceutical company headquartered in Foster City, California, that focuses on researching and developing antiviral drugs used in the treatment of HIV/AIDS, hepatitis B, hepatitis C, influenza, and COVID-19, including ledipasvir/sofosbuvir and sofosbuvir. Gilead is a member of the Nasdaq-100 and the S&P 100.

California joined a coalition of 48 other attorneys general in securing $202 million from Gilead Sciences, Inc. (Gilead), for running an illegal kickback scheme to promote its HIV medications. Gilead allegedly violated federal law by illegally providing incentives – including awards, meals, and travel expenses – to healthcare providers to prescribe Gilead’s medications, resulting in millions of dollars of false claims submitted to government health care programs, including Medi-Cal.

The settlement in principle, reached in coordination with the U.S. Department of Justice and approved by the U.S. District Court for the Southern District of New York, provides $49 million for Medicaid programs nationwide, including $4,118,184 for California, with the remainder going to Medicare, Tricare, and the AIDS Drug Assistance Program (ADAP).

From January 2011 to November 2017, Gilead allegedly violated federal anti-kickback laws by providing gifts to healthcare providers who attended and spoke at promotional speaker programs for Gilead’s HIV drugs: Stribild, Genvoya, Complera, Odefsey, Descovy, and Biktarvy. Gilead paid high-volume prescribers tens to hundreds of thousands of dollars to present as “HIV Speakers.” The company also covered travel expenses for speakers, including those traveling long distances and to attractive destinations, such as Hawaii, Miami, and New Orleans, and hosted dinners at high-end restaurants.

Gilead’s internal compliance mechanisms failed to halt these violations. The company’s internal policies and procedures failed to prevent its sales representatives from improperly offering incentives to induce prescriptions.

The Division of Medi-Cal Fraud and Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $69,244,976 for Federal fiscal year (FY) 2025. The remaining 25 percent is funded by the State of California. FY 2025 is from October 1, 2024 through September 30, 2025.

Gilead Sciences has had at least one prior problem with resolving claims for illegal kickbacks. Back in 2020 Gilead agreed to pay $97 million to resolve claims that it violated the False Claims Act by illegally using a foundation, Caring Voice Coalition (CVC), as a conduit to pay the Medicare co-pays for its own drug, Letairis.

In that prior case the government alleged that Gilead used CVC, which claimed 501(c)(3) status for tax purposes, as a conduit to pay the co-pay obligations of thousands of Medicare patients taking Letairis, which is approved to treat pulmonary arterial hypertension (PAH). According to the government’s allegations, Gilead used CVC to cover the patients’ co-pays in order to induce those patients’ purchases of Letairis. Gilead knew that the prices it set for Letairis otherwise could have posed a barrier to those purchases.