Tag: 2025 News

Edgar Osuna worked for Spectrum Security Services, Inc., from October 2011 to February 2022. During his tenure Spectrum allegedly committed Labor Code violations against Osuna and other employees. The violations against other employees purportedly continued after Osuna’s employment terminated.

In August 2023, Osuna notified the Labor and Workforce Development Agency (LWDA) of Spectrum’s alleged failure to comply with the Labor Code. After the LWDA failed to respond within the statutory period Osuna filed a representative PAGA claim based on the underlying violations identified in Osuna’s LWDA notice, and individual and class claims based on the same allegedly unlawful conduct.

Spectrum demurred to the PAGA claim. It argued the applicable one-year statute of limitations bars the claim because Osuna did not provide the LWDA with notice of the alleged Labor Code violations until 18 months after his employment ended. Spectrum also argued Osuna lacks standing to bring his PAGA claim because he was not employed during the time he sought to represent other aggrieved employees. (Citing Robinson v. Southern Counties Oil Co. (2020) 53 Cal.App.5th 476 (Robinson).) It urged the trial court to sustain the demurrer without granting leave to amend.

The trial court agreed with Spectrum’s argument and dismissed Osuna’s class claims, sent his individual claims to arbitration, and sustained Spectrum’s demurrer to his representative PAGA claim without granting leave to amend. It concluded that Osuna lacked standing to bring the PAGA claim because he did not suffer a Labor Code violation during the one-year statute of limitations period for recovering civil penalties.

The Court of Appeal reversed the portion of the order sustaining Spectrum’s demurrer to Osuna’s representative PAGA claim in the published case of Osuna v. Spectrum Security Services, Inc. CA2/6 – B338047 – (May 2025).

Before turning to the issue of representative PAGA standing, the Court of Appeal resolve the threshold issue of appealability. Spectrum contended that it should dismiss Osuna’s appeal because “an order sustaining a demurrer to [fewer] than all of the [claims in a complaint is not immediately appealable.” It also contends the “death knell” doctrine – an exception to this general rule – is inapplicable here because Osuna has not shown that the trial court’s order was “a de facto final judgment for absent plaintiffs.”

The Court of Appeal concluded “the Miranda rule applies here.” (citing Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal.App.4th 196) The order dismissing the representative PAGA claim without leave to amend operates as “a de facto final judgment for absent plaintiffs” (In re Baycol Cases I & II (2011) 51 Cal.4th 751, 759) and is appealable”

Due to the systemic underenforcement of the Labor Code, the Labor Code Private Attorneys General Act of 2004 (Labor Code,1 § 2698 et seq.; PAGA) deputizes employees to stand in the shoes of the state to pursue civil penalties on behalf of themselves and other “aggrieved employees.” (Arias v. Superior Court (2009) 46 Cal.4th 969, 980 (Arias).) So long as they were employed by the alleged violator and personally suffered at least one Labor Code violation, aggrieved employees have standing to bring representative PAGA actions.

The Legislature recently adopted Assembly Bill No. 2288 (2023-2024 Reg. Sess.), which amended portions of Labor Code § 2699. Among other changes, Assembly Bill No. 2288 “requir[es] an aggrieved employee to have personally suffered the alleged violations within [PAGA’s] one-year statute of limitations.” (Sen. Com. on Judiciary, Rep. on Assem. Bill No. 2288 (2023-2024 Reg. Sess.) as amended June 21, 2024, pp. 15-16.) Because those amendments apply only to lawsuits filed on or after June 19, 2024, they are inapplicable here. (See Stats. 2024, ch. 44, § 1.)

If after notification the LWDA does not investigate, does not issue a citation, or fails to respond to the notice within 65 days, the employee may sue. But not every private citizen can maintain such a suit. Only an “aggrieved employee” has PAGA standing.The Labor Code defines such an employee as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” The issue here is whether Osuna meets that definition. The Court of Appeal concluded that he did.

“The words of section 2699, former subdivision (c) are clear and unambiguous: To have standing to bring a PAGA action, “[t]he plaintiff must be an aggrieved employee, that is, someone ‘who was employed by the alleged violator’ and ‘against whom one or more of the alleged violations was committed.”

Beckers Hospital Review just reported that in May 2025, a federal jury in the U.S. District Court for the Central District of California awarded $147 million in damages to Scottsdale, Arizona–based Innovative Health, a medical device reprocessor, in a lawsuit filed in 2019 against Johnson & Johnson’s subsidiary, Biosense Webster.

The jury found that Biosense Webster violated federal antitrust laws (Sherman Antitrust Act, Sections 1 and 2 and California Cartwright Act) by engaging in anticompetitive practices, specifically by withholding clinical support from hospitals that used reprocessed catheters instead of purchasing new ones from Biosense.

The lawsuit centered on Biosense Webster’s policy of tying access to clinical support for its CARTO 3 cardiac mapping system to the exclusive purchase of its high-density mapping and ultrasound catheters.

Innovative Health alleged that this policy, implemented after they received FDA clearance in 2016 to reprocess Biosense’s catheters, pressured hospitals to buy new devices, stifling competition and maintaining Biosense’s monopoly in the cardiac mapping catheter market.

Internal emails presented during the trial showed hospitals expressing interest in Innovative’s cost-effective reprocessed catheters but facing warnings from Biosense about discontinued support.

Biosense defended the policy, arguing it was necessary to ensure service quality and prevent competitors from “free-riding” on their clinical support infrastructure.

However, the jury sided with Innovative Health, determining that the tying arrangement and monopolistic practices were illegal.

The case was initially dismissed in 2022 but revived by the Ninth Circuit Court of Appeals in 2023, leading to the trial that began in April 2025.

Association of Medical Device Reprocessors issued the following statement: “Friday’s unanimous verdict by a federal jury in Santa Ana, California for Innovative Health against Johnson & Johnson (NYSE: JNJ) is a victory for America’s hospitals, providers, patients, and the environment. The jury found that Biosense Webster violated federal and state antitrust laws by withholding clinical support to hospitals using Innovative Health’s FDA regulated, reprocessed catheters.”

“For too long, Johnson & Johnson has used tying arrangements and other tactics to interfere with fair competition from lower-cost, FDA-regulated, reprocessed ‘single-use’ devices (SUDs),” the association’s CEO Daniel J. Vukelich said in a news release. “We hope this jury’s message will be heard loud and clear: Hospitals want to reduce costs and greenhouse gas emissions by using more reprocessed SUDs without fear of retribution by their original equipment manufacturers (OEMs).”

The verdict is seen as a significant win for reprocessors and hospitals seeking cost-effective, FDA-regulated reprocessed devices to reduce costs and environmental impact.

Deborah Hemsted’s workers’ compensation claim is based on an injury she sustained on September 24, 2014, when she was a Medical Assistant III for United Indian Health Service at Arcata, California.

The history of the United Indian Health Services began in 1968. It was a time when Native activism coincided with the nation-wide Civil Rights Movement and the Office of Economic Opportunity programs. Together these factors helped create a new era of self-determination for Indian peoples.

Hemsted first received benefits and treatment for her injury through United Indian’s tribal workers’ compensation system. After a dispute arose, Hemsted filed a claim with the state workers’ compensation system. United Indian took the position that, in light of its tribal immunity, California’s workers’ compensation system lacked jurisdiction to adjudicate the claim.

In a March 2024 decision, the workers’ compensation administrative law judge (ALJ) rejected United Indian’s claim of sovereign immunity after applying the California Supreme Court Miami Nation’s five-factor arm-of-the-tribe test. (People v. Miami Nation Enterprises (2016) 2 Cal.5th 222.)

With respect to United Indian’s method of creation, the ALJ found that it was a California non-profit created through the Indian Health Board and authorized by several tribes, including federally recognized tribes, to provide health services to their members. The ALJ observed that eight or nine tribes have sanctioned United Indian as their health provider. The ALJ noted that most of the tribal resolutions did not specifically designate United Indian as a tribal organization. Based on these circumstances, the ALJ concluded that United Indian’s method of creation weighed against sovereign immunity.

As to the question of intent, the ALJ found no evidence that the tribes intended to share their sovereign immunity with United Indian. The ALJ held that United Indian’s purpose – to serve the health needs of Indians in Humboldt and Del Norte Counties – weighed in favor of sovereign immunity.

As for control, the ALJ concluded that “[c]ontrol weighs against sovereign immunity because the Board [of Directors of United Indian] consisted of tribal members and others who may or may not be tribal members.”

With respect to the financial relationship between United Indian and the tribes, the ALJ found United Indian was not funded by the tribes, but instead by grants obtained by the Indian Health Board and distributed to United Indian. The ALJ reasoned that, because United Indian is incorporated separately from the tribes, “any action against [United Indian] would not threaten the tribes’ resources, nor the resources of the members of the board.” The judge therefore concluded that this factor weighed against immunity.

In her report on reconsideration, the ALJ recommended that the Board deny United Indian’s request for reconsideration. The ALJ appeared to change her view on the funding factor, stating: “Defendant’s argument on Reconsideration with regard to funding is well made. The[ir] point [that] any monies lost through suit would not be available to [United Indian] to provide medical treatment to the tribes weighs in favor of sovereign immunity.” However, the ALJ’s overall assessment remained that United Indian had failed to establish its entitlement to sovereign immunity.

Denying United Indian’s reconsideration request, the Board adopted and incorporated the ALJ’s report on reconsideration. The Board found no abuse of discretion in the ALJ’s rejection of United Indian’s claim of sovereign immunity.

The Court of Appeal granted a petition for writ of review, and reversed the Boards decision in the unpublished case of United Indian Health etc. v. Workers’ Comp. Appeals Bd. – A170950 – (May 2025).

“No one Miami Nation factor of the five-factor test is dispositive.” Whether sovereign immunity applies to an entity is a question of law reviewed de novo. (Miami Nation, supra, 2 Cal.5th at p. 250.) the Court of Appeal also applid the de novo standard when interpreting written instruments, except to the extent that the interpretation turns on conflicting extrinsic evidence.

Considering both the law and the circumstances under which United Indian was formed (Miami Nation, supra, 2 Cal.5th at pp. 245-246), the method of creation factor weighs somewhat in favor of sovereign immunity.

The ALJ concluded the tribes had no intent to share their sovereign immunity with United Indian. The record contained no tribal documents stating the tribes’ intent to extend sovereign immunity to United Indian. “However, that even absent express statements of a tribe’s intent, tribal intent may be inferred from the tribe’s actions or other circumstances.” And as United Indian asserts, it may be possible to infer the intent to share tribal immunity based on the fact that the tribes established and sanctioned United Indian to provide healthcare services to tribe members under a federal system intended to further tribal self-governance.

The Court of Appeal agreed with the ALJ that United Indian’s provision of health care serves a purpose central to tribal self-sufficiency and self-governance, weighing in favor of sovereign immunity

The control factor also weighs in favor of sovereign immunity. The tribes participate in the management and control of United Indian in at least three respects.

Finally, the financial relationship factor likewise weighs in favor of immunity. Miami Nation makes clear that where a judgment against the tribal entity would significantly reduce tribal resources, sovereign immunity is appropriate, even if the tribe’s treasury is not directly affected.

“In sum, although there is no express evidence that United Indian’s participating tribes intended to share their immunity, the remaining factors reflect that United Indian is an arm of the tribes that it serves.”

Abel Vazquez was employed as a seasonal agricultural worker by Inocensio Renteria on March 17, 2017, when he sustained an industrial injury to his left ankle and left calf, and claims to have sustained injury to his left lower extremity, psyche, and in the form of hypertension, diabetes, and hyperlipidemia.

Ira Fishman, M.D., was selected as a QME to evaluate the compensability of applicant’s internal complaints, and issued two reports. Dr. Fishman initially evaluated applicant on May 21, 2021. On May 31, 2022, he issued a supplemental report following his review of additional records.

On July 29, 2024, applicant requested a re-evaluation with Dr. Fishman.The next available evaluation date was for December 2, 2024, which was 127 days later.

On August 5, 2024, defendant requested a replacement panel pursuant to AD Rules 31.3(e) and 31.5(a)(2), because the re-evaluation appointment with Dr. Fishman was scheduled more than 120 days from the date of applicant’s request.

On August 15, 2024, applicant objected to the request for a replacement panel, arguing that the time limits only applied to initial evaluations and not to subsequent evaluations. Defendant responded to applicant’s letter by citing AD Rule 31.3(f) and arguing that the timeframes for QME appointments apply to both initial and subsequent evaluations.

The Division of Workers’ Compensation (DWC) Medical Unit issued a replacement panel on September 12, 2024. Applicant objected, and the issue of whether a replacement panel was appropriate was set for trial. The WCJ found that defendant was entitled to a replacement panel due to the QME’s inability to set an appointment within 120 days.

The WCAB sitting en banc (Lab. Code, § 115.) granted applicant’s petition for reconsideration in the case of Vazquez v Inocensio Renteria -ADJ11017003 90 Cal.Comp.Case ___ (May, 2025). It rescinded the March 11, 2025 F&O and return the matter to the trial level for further proceedings.

In doing so it held that:

1. Only the Appeals Board has jurisdiction to determine whether a replacement panel is valid or otherwise appropriate.
2. In a represented case, where a QME does not timely establish availability to set an appointment pursuant to AD Rule 31.3, a WCJ or the Appeals Board has discretion to order a replacement QME for good cause. The WCJ or the Appeals Board may consider the following:
a. The length of delay caused by the QME’s unavailability.
b. The amount of prejudice caused by the delay in availability versus the amount of prejudice caused by restarting the QME process.
c. What efforts, if any, have been made to remedy the QME’s availability.
d. Case specific factual reasons that justify replacing or keeping the current QME, including whether a party may have waived its objection.
e. The Appeals Board’s constitutional mandate to “accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character.” (Cal. Const., art. XIV, § 4.)

As explained in the decision, “when sections 4062.5 and 139.2(j)(1) are read together, a party’s statutory right to seek replacement of a QME in represented cases arises when the QME fails to timely issue a report following a medical evaluation. In represented cases, the determination of whether a QME should be replaced due to unavailability to set an evaluation is within the discretionary power of the Appeals Board, and a QME may be replaced where a party demonstrates good cause for the replacement.”

Application of this decision is prospective only.

Alonzo McClanahan claimed workers’ compensation benefits for an alleged industrial injury to his right shoulder that occurred on July 25, 2017, while working at Employer DPR Construction (DPR). At the time its workers’ compensation carrier was National Union Fire Insurance Company. DPR’s claims administrator denied the claim a few months later.

The following year, McClanahan sought board adjudication of his claim. (§ 5500; Cal. Code Regs., tit. 8, § 10455.) Dr. Hanley was originally designated as the qualified medical evaluator and prepared two reports in that capacity in 2018 (the Hanley reports). He was later replaced as the qualified medical evaluator by Dr. Foglar and then by Dr. McGahan.

After engaging in discovery, the parties participated in a mandatory settlement conference (§ 5502, subd. (d)), which was unsuccessful, so the matter was set for trial. The pretrial conference statement stipulated to Dr. McGahan as the qualified medical evaluator (§ 4062.2) and provided a list of exhibits, including reports by Dr. McGahan, but the Hanley reports were not included.

At trial, McClanahan testified that his right shoulder was injured on the morning of July 25, 2017, while working for DPR (the 2017 injury). Specifically, he was “moving like 200 2-by-4s, 20-foot long, from one place to another” for four or five hours when the area between his shoulder and neck started to get stiff. He told his foreman that he couldn’t lift anymore with his shoulder hurting, and when he got off a few hours later, he told his superintendent that his “shoulder up in [his] neck” was sore. The superintendent asked him if he wanted to make a report, but McClanahan declined because he didn’t think it was that bad.

But when McClanahan woke up the next day, his arm and shoulder were stiff. He went to a doctor that night who advised taking a few days off work because his shoulder may be overworked. McClanahan reported this to DPR, but he did not see a workers’ compensation doctor until August 10, 2017. In his view, DPR caused the delay.

Three DPR employees disagreed with McClanahan’s account. Both the foreman and the superintendent stated that McClanahan did not report an injury to them on July 25, 2017. And the DPR safety manager who prepared the incident report testified that to his knowledge, McClanahan did not report an injury to anyone on July 25, 2017. DPR’s evidence included the employee sign out sheet for July 25, 2017, that indicated McClanahan signed out at 3:00 p.m. and checked the box indicating he was not injured.1 The safety manager also testified he made several attempts to take McClanahan to the workers’ compensation clinic between July 27, 2017, and August 7, 2017, in accordance with DPR policy, but McClanahan never showed up.

In a deposition, McClanahan testified DPR was the first place he ever had right shoulder pain, but at trial he admitted he suffered an industrial injury below his right elbow in 2013, a few years before working for DPR (the 2013 injury), and felt pain in his right shoulder as a result. He also testified he never went to a doctor for right shoulder pain before July 2017, but medical records showed that he sought or obtained care for shoulder pain or strain several times between 2013 and 2015, had an MRI of his right shoulder in 2014, and was diagnosed with a right shoulder condition in 2015. The records also indicated that he sought treatment for impingement in the right shoulder after a tree branch fell on it in 2015, but McClanahan could not remember a tree ever falling on his shoulder.

According to Dr. McGahan’s evaluation, McClanahan sustained “an industrial injury to his right shoulder arising out of and caused by the industrial exposure of July 25, 2017.” Dr. McGahan found it clear that McClanahan had preexisting right shoulder pathology but concluded it was “medically probable that [McClanahan’s] work duties on July 25, 2017, contributed to a worsening of his right shoulder pain.” In a supplemental report, Dr. McGahan stated that if “McClanahan is not a credible witness, then this certainly would call into question the credibility of his claim. Under this circumstance, the incident of July 25, 2017, may simply represent an exacerbation of his prior industrial injury rather than aggravation.

Over DPR’s objection, the workers’ compensation judge (WCJ) admitted the Hanley reports because DPR had received them before the mandatory settlement conference. In the first report, Dr. Hanley noted that some of McClanahan’s providers were suspicious about the validity of his complaints. In a supplemental report, Dr. Hanley concluded the “red flags” in McClanahan’s history were no longer of concern.

Based on McClanahan’s “credible testimony, the treatment records, and the findings by QME Dr. McGahan,” the WCJ concluded that McClanahan sustained an injury to his right shoulder arising out of and in the course of employment on July 25, 2017.

After reconsideration, the WCAB affirmed the WCJ’s determination on August 22, 2024 in a two-to-one decision. The affirming board members found that McClanahan erred by omitting the Hanley reports from the pretrial conference statement but concluded the error was harmless for two reasons: (1) the WCJ did not rely on the Hanley reports to find the industrial injury; and (2) the WCJ retains the discretion to determine if evidence should be admitted into the record as a matter of due process.

The Court of Appeal agreed to hear the case, and after it’s review annulled the board’s decision and remanded for further proceedings in the unpublished case of DPR Construction v. Workers’ Compensation Appeals Board CA3 – C100254- (May 2025).

On appeal, Petitioners contend the board exceeded its powers in two ways: (1) by failing to state the reasons for finding McClanahan credible and (2) by admitting two medical reports that were not listed in the pretrial conference statement. The Court of Appeal disagreed with petitioners as to the first contention but agreed as to the second.

In workers’ compensation proceedings, discovery closes on the date of the mandatory settlement conference. ( at p. 1164; § 5502, subd. (d)(3).) If the claim is not resolved at the conference, the parties must file a pretrial conference statement noting the specific issues in dispute, listing the exhibits, and disclosing witnesses. (§ 5502, subd. (d)(3); Cal. Code Regs., tit. 8, § 10759, subd. (b).) Evidence not disclosed or obtained thereafter is not admissible unless the proponent can demonstrate it was not available or could not have been discovered by the exercise of due diligence before the settlement conference. (§ 5502, subd. (d)(3).)

The purpose of this requirement is two-fold: (1) to “eliminate the element of surprise in workers’ compensation proceedings” and (2) “ ‘ “ ‘to guarantee a productive dialogue leading, if not to expeditious resolution of the whole dispute, to thorough and accurate framing of the stipulations and issues for hearing.’ ” ’ ” (Telles Transport, Inc. v. Workers’ Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, at pp. 1164, 1167.) The board abuses its discretion when it relieves a party from the sanctions of section 5502 without that party showing good cause. (San Bernardino Community Hospital v. Workers’ Comp. Appeals Bd. (1999) 74 Cal.App.4th 928, 938.

Section 5502 establishes the “bounds of discretion in the [WCJ] for keeping discovery open after the mandatory settlement conference.” (County of Sacramento v. Workers’ Comp. Appeals Bd. (1999) 68 Cal.App.4th 1429, 1433.) “[D]isregard for the statutory procedural mechanisms for resolving workers’ compensation cases is inappropriate.” (Ibid.) Such disregard is not subject to harmless error analysis. (San Bernardino, supra, 74 Cal.App.4th at p. 938.)