Tag: 2025 News

Legal Aid at Work (LAAW) reached a settlement agreement with the California Employment Development Department (EDD), the state agency responsible for administering unemployment insurance for millions of people who work in California. The case involves a lawsuit challenging the legality of EDD’s policies for informing unemployment insurance claimants of determinations that the claimant cannot receive benefits or needs to repay benefits that the claimant has already received.

The agreement, which still needs court approval, will dramatically increase the likelihood unemployment insurance claimants will promptly learn about negative decisions, understand them, and know how to challenge them. Among other things, the settlement will require the EDD to start sending information about its decisions by email and text message, and will require the EDD to rewrite its notices so they are written at an eighth-grade level.

During the COVID-19 pandemic, millions of Californians accessed unemployment insurance benefits, and the state paid out nearly $25 billion in benefits in 2020 alone. California’s Legislative Analyst’s Office has estimated that between $500 million and $1 billion in benefits go unreceived each year because the EDD improperly denies claims. Other claimants are ordered to repay benefits when they are retroactively deemed ineligible for benefits. These decisions, which can order claimants to repay $10,000 or more in benefits, are often financially crippling. And the decisions are often wrong. Claimants who appeal EDD’s decisions have historically been able to get those decisions reversed on appeal over 50 percent of the time, according to the same LAO report.

The lawsuit, Okamura v. Employment Development Department, was filed in Alameda County Superior Court. It argues that EDD failed to properly notify claimants when their benefits were denied, when they owed money back, or when they were accused of fraud. As noted in the Complaint, some claimants only learned about these decisions after their wages were garnished or their tax refunds were seized. Even when claimants did receive notices, the notices were so confusing that they didn’t understand why they were being charged with an overpayment, or realize that they could challenge the EDD’s decision.

EDD will make many important changes to improve how it notifies people about unemployment benefit decisions, including:

– – Expanded Digital Notifications – EDD will soon send emails, text messages, and online alerts to make sure people know about benefit denials and overpayments. Currently, the EDD only sends these notices to claimants by mail, even though most of the unemployment insurance process is done online and over the phone.
– – Creating Easier-to-Understand Notices – EDD has agreed that notices revised as part of its longer-term modernization effort will be rewritten at an 8th-grade reading level. Currently, notices are drafted at a college-level reading level, making them difficult to understand for most claimants.
– – Using Address Verification Tools – EDD will implement a system to verify claimants’ mailing addresses by cross-checking the National Registry of New Hires, and eventually the United States Postal Service’s National Change of Address database. These changes will reduce instances of lost or delayed communication, especially when the EDD sends notices to claimants months or years after they stopped collecting unemployment insurance benefits.
– – Clearer Information About EDD’s Decision – Notices will provide additional information on why benefits were denied or overpaid. Currently, notices only provide limited information about the EDD’s decision, leaving claimants guessing about why they were denied or required to pay back benefits.
– – Disclosure About Possibility of Waiver of Overpayment – Importantly, the EDD will also start telling claimants who receive Notices of Overpayment that some claimants are eligible for a waiver of the overpayment. On appeal, the California Unemployment Insurance Appeals Board regularly decides that an overpayment must be waived, and claimants do not need to pay back benefits they were not eligible to receive.

Even though this lawsuit was filed as a potential class action, the settlement only requires the four individual named plaintiffs and Legal Aid at Work, an institutional plaintiff, to release their claims. The lawsuit does not affect other claimants’ right to file their own legal claims if they have been affected by EDD’s practices in the past.

The motion for settlement approval and entry of judgment was filed in Alameda County Superior Court. If approved, EDD will begin implementing the agreed-upon changes over the next year.

Billey Ford worked as a security guard for The Silver F, Inc., doing business as Parkwest Casino Lotus (Parkwest) from September 2018 to December 2021.

Upon his hiring, Ford signed an arbitration agreement, pursuant to which he agreed to arbitrate any employment-related disputes. However, the arbitration agreement expressly “does not apply” to claims for workers’ compensation or unemployment compensation, specified administrative complaints, Employment Retirement Income Security Act (ERISA) claims, or, as relevant here, “representative claims under [PAGA].”

In addition to the arbitration clause, the arbitration agreement contains a class, collective, and representative action waiver. It provides: “Except where prohibited by federal law, [Parkwest] and I agree that we expressly waive the right to commence arbitration or to file a complaint in court in the form of a class, collective, or representative action on behalf of others. . . . In the event a court determines this waiver is unenforceable with respect to any claim, then this waiver shall not apply to that claim, that claim must be filed in a court of competent jurisdiction, and such court shall be the exclusive forum for that claim.”

In February 2022, Ford filed a complaint against Parkwest, alleging a single cause of action under PAGA for Labor Code violations suffered by him and by other employees. Ford specifically alleged that Parkwest unlawfully required its employees to undergo mandatory, off-the-clock health screenings prior to the start of their work shifts and, consequently, issued inaccurate wage statements and failed to pay all the wages due to its employees.

Parkwest moved to compel arbitration of Ford’s “individual” PAGA claims (i.e., those arising from Labor Code violations that Ford personally sustained) and to dismiss Ford’s “representative” PAGA claims (i.e., those arising from Labor Code violations suffered by other employees). Parkwest’s motion was based on Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 648-649 (Viking River). After a hearing, the trial court denied the motion. This appeal followed.

The Court of Appeal affirmed the trial court denial of the motion in the unpublished case of Ford v The Silver F  -C099113 (March 2025).

The issue presented in this appeal is one of contract interpretation, i.e., whether the parties’ arbitration agreement requires arbitration of Ford’s PAGA claims. There is no dispute that while the arbitration agreement generally applies to all employment-related disputes, it specifically excludes “ ‘representative claims under [PAGA].’ ” The parties disagree on how to interpret this exclusion.

Parkwest argues that, under Viking River, PAGA claims are “representative” in two ways: First, all PAGA claims are “representative” in the sense that a plaintiff brings a PAGA claim as an agent or proxy for the state. Second, some PAGA claims are “representative” in the sense that they are predicated on code violations suffered by employees other than the plaintiff. Because the term “representative” has two possible meanings, Parkwest argues the exclusion for “representative claims under [PAGA]” is, at best, ambiguous about whether it was intended to exclude all PAGA claims or only those nonindividual claims that the plaintiff might assert on behalf of other employees. Thus, Parkwest contends, we must apply the FAA’s presumption of arbitrability and construe the agreement to permit arbitration of Ford’s individual PAGA claims.

Ford does not dispute that, under the reasoning of Viking River, the exclusionary clause is ambiguous as to the meaning of the term “representative,” but Ford argues the trial court correctly resolved this ambiguity against Parkwest as the drafter of the arbitration agreement. Ford also argues that because the waiver of “representative” claims is unenforceable, any PAGA claim must proceed in court instead of arbitration.

The trial court, in contrast, found that “the agreement is not reasonably susceptible to an interpretation that ‘representative claims under [PAGA]’ means anything other than all PAGA claims.” Thus, the court concluded that Ford’s PAGA claims were unambiguously excluded from the scope of arbitration.

The Court of Appeal wrote that it was not “persuaded by either party’s position.” Instead, it agreed with the trial court’s interpretation.

“Here, both the waiver and the exclusionary clause use the term ‘representative,’ but only the waiver adds the qualifying phrase ‘on behalf of others.’ This supports our interpretation that the parties intended the phrase ‘representative claims under [PAGA]’ to refer broadly to all PAGA claims, not just those brought on behalf of other employees.”

Brian Prahl was involved in a multiple vehicle accident in March 2016 while insured by with Allstate Northbrook Indemnity Co. with a policy that contained uninsured motorist coverage. The available insurance proceeds from two drivers at fault were insufficient to fully compensate Prahl for the injuries and damages he suffered. Prahl settled with these drivers and then sought to initiate arbitration of his underinsured motorist claim.

Allstate agreed to arbitration on May 29, 2018. Arbitration was scheduled for November 2022 but was continued based on Prahl’s counsel’s unavailability.

In August 2023, Prahl’s counsel contacted counsel for Allstate to reset the arbitration. Allstate asserted that the five-year limitation set forth in Insurance Code section 11580.2, subdivision (i), had expired in May 2023. Prahl submitted a memorandum of points and authorities explaining his position that Emergency Rule 10 extended the deadline to conclude arbitration by six months.

The matter was heard on October 26, 2023. The court denied the petition, and Prahl filed a timely appeal.The Court of Appeal affirmed the trial court in the published case of Prahl v. Allstate Northbrook Indemnity Co. – C099904 (March 2025).

Insurance Code section 11580.2, subdivision (i)(2)(A) provides, as relevant to this proceeding, that any uninsured motorist arbitration must be concluded “[w]ithin five years from the institution of the arbitration proceeding.” Prahl argues this five-year deadline is extended by Emergency Rule 10.

On March 27, 2020, Governor Newsom issued an executive order acknowledging that ‘ “the Judicial Branch retains extensive authority, statutory and otherwise, to manage its own operations as it deems appropriate to mitigate the impacts of COVID-19 . . . .” (Exec. Order No. N-38-20.) “The order suspended any limitations in Government Code section 68115 or any other provision of law that limited the Judicial Council’s ability to issue emergency orders or rules, and suspended statutes that may be inconsistent with rules the Judicial Council may adopt.”

On April 6, 2020, the Judicial Council issued various emergency rules. Among those was Emergency Rule 10, which provided: “Notwithstanding any other law, including Code of Civil Procedure section 583.310, for all civil actions filed on or before April 6, 2020, the time in which to bring the action to trial is extended by six months for a total of five years and six months.”

Prahl contends an uninsured motorist arbitration is a “civil action” to which Emergency Rule 10 applies.

The rules applicable to interpretation of the rules of court are similar to those governing statutory construction. [Citation.] Under those rules of construction, the primary objective is to determine the drafters’ intent. This analysis begins with the plain language of the rule.

The phrase “civil action” is plain and not reasonably susceptible to more than one interpretation. In context, the term “civil action” unambiguously refers to a court action. The Code of Civil Procedure defines an “action” as “an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.” (Code Civ. Proc., § 22).

Courts have explained that arbitration is an “alternative” to a civil action. (Leshane v. Tracy VW, Inc. (2022) 78 Cal.App.5th 159, 164-165; accord Sargon Enterprises, Inc. v. Browne George Ross LLP (2017) 15 Cal.App.5th 749, 767 [“[A] party to an arbitration agreement may elect to initiate a civil action, rather than an arbitration proceeding”].).

Prahl relies on the general definitions set forth in California Rules of Court, rule 1.6. However the Court of Appeal noted that it “does not appear that these definitions alter what is otherwise a settled understanding of ‘civil action.’ ” …. “We agree with the trial court that ‘[g]iven Emergency Rule 10’s use of terminology from the Code of Civil Procedure, [Prahl]’s argument that the general definitions found in the California Rules of Court should apply is not persuasive.’ “

“Because the trial court did not err in concluding Prahl lost the right to compel arbitration by failing to conclude it within five years of initiation, we affirm the trial court’s denial of his petition to compel arbitration.”

Applicant, Jian Kallash while employed on April 6, 2019, as a Sales/Customer Service Associate at National City, California, by Macy’s West Stores, Inc., sustained injury arising out of and in the course of employment to the lumbar spine.

Applicant’s secondary treater, Dr. Abitbol, submitted an RFA dated March 18, 2024. Defendant untimely issued a UR denying such requests for treatment such that the parties proceeded to trial from an Expedited hearing on such issue of treatment.

The WCJ issued a Findings and Award/Opinion on Decision on December 20, 2024 and awarded the treatment. The Petition for Reconsideration of the award was was denied for the reasons stated in the WCJ’s Opinion on Decision and the Report, both of which it incorporated in the WCAB panel decision of Kallash v Macy’s West Stores, Inc.,– ADJ12663627 (March 2025)

The employer contended that the WCJ erred in granting the requested treatment arguing the WCJ failed to reference any MTUS provision or supporting evidence-based medical or scientific guideline in support of the award of the requested treatment over the utilization review non-certification, And failed to show the MTUS or evidence-based medical and/or scientific guidelines were rebutted by substantial medical evidence.

Defendant cites the panel decision of Thompson v. County of L.A. (2016 Cal.Wrk.Comp. P.D. Lexis 107) and Rios v. S. San Francisco Unified Sch. Dist. (2021 Cal.Wrk.Comp. P.D. Lexis 15).

In Thompson, the applicant was not entitled to the requested lumbar surgery because the requesting physician failed to reference either MTUS or other evidence-based guides to support the treatment modality. That case refers to a physician failing to justify the request, not the WCJ.

Currently, what defendant has not shown is that the WCJ must specifically reference the MTUS guidelines, ACOEM guidelines or any other evidence-based treatment guidelines to substantiate the requested treatment. In fact, in reviewing the findings of the untimely UR denial, such denial itself failed to state or reference any MTUS updates or ACOEM guidelines in which they based their denial.

The untimely UR denial only states that, “The records did not document failure of non-operative measures for the claimant. No formal physical therapy records for the claimant were included for review detailing response and lack of progress with treatment. No recent medications for pain or injections were detailed. Further, review of the lumbar imaging report did not detail evidence of any spondylolisthesis with motion segment instability at L5-S1 measuring 5mm or more. The current evidence-based guidelines do not recommend lumbar spine fusion to address lumbar spondylosis or radiculopathy only.”

The WCJ in his Response to the Petition for Reconsideration notes that “There is no mention of the MTUS guidelines or ACOEM guidelines or a reference to any other evidence-based guidelines to explain the denial. Records presented to the WCJ to review in assessing the reasonableness and necessity of the treatment were not sent to UR. It was this lack of the medical evidence provided to the UR department that created the original denial.”

“Had the adjuster been forthcoming with the complete medical file, UR may not have denied the necessary treatment. Furthermore, as previously stated in the Opinion on Decision, the evidence clearly established that applicant had exhausted all conservative treatment and the EMG and MRI studies revealed positive findings. (Court Exhibit JJ) The medical evidence, taken as a whole, between the multiple treaters and the QME establishes the medical necessity of the requested surgery.”

A federal grand jury indicted Jose Vicente Badillo on one count of conspiracy to commit arson in connection with an alleged scheme to burn tow trucks throughout the San Francisco Bay Area in 2023.

According to the newest March 11, 2025 indictment against him unsealed earlier this month, Badillo, 29, of San Francisco, conspired with others to set fire to at least six tow trucks on four occasions between April 2023 and October 2023. Specifically, Badillo and his co-conspirators allegedly set fire to and damaged or destroyed (i) two tow trucks in San Francisco on April 4, 2023; (ii) one tow truck in San Francisco on April 29, 2023; (iii) one tow truck in East Palo Alto on July 25, 2023; and (iv) two tow trucks in San Francisco on Oct. 3, 2023.

The indictment describes that the purpose of the conspiracy was, among other things, to drive more business to two Bay Area-based towing companies with which Badillo was associated – Auto Towing and Specialty Towing – by impeding the business prospects of competitor towing companies, and to retaliate against those same competitors for perceived wrongs. Badillo allegedly orchestrated the conspiracy and then directed others to set fire to the targeted tow trucks.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.

The indictment is the latest of several criminal investigations centered around Badillo. Jose Vicente Badillo and Jessica Elizabeth Najarro were indicted last August 2024 on charges of mail fraud, wire fraud, and money laundering related to a scheme to defraud an auto insurance company. The allegations include submitting a fraudulent insurance claim for a wrecked car, which resulted in a reimbursement check of over $34,000 being deposited into an account controlled by Badillo.

The August indictment also alleges that, at the time of the offenses in 2019, Badillo owned and/or controlled at least two companies engaged in the business of towing vehicles: Jose’s Towing, LLC, and Auto Towing, LLC, both of which operated out of San Francisco.

In another fraud case, Badillo and Abigail Fuentes were charged with multiple felonies in October 2023 by the San Francisco District Attorney’s Office. The charges stem from an alleged welfare fraud scheme. Fuentes, who worked as a Senior Eligibility Worker at the Human Services Agency, is accused of improperly approving Badillo’s application for public welfare programs without disclosing their personal relationship. Both individuals allegedly misrepresented their income and assets to qualify for benefits they were not eligible for, including Medi-Cal, CalFresh, and CalWORKs. Authorities say Badillo and Fuentes are in a relationship and have children.

At the time the application was filed, investigators said the pair had been operating three towing companies – Auto Towing, Jose’s Towing and Specialty Towing – which generated more than $2 million in gross annual income. Both Fuentes and Badillo allegedly lied about their substantial income and assets in order to receive public benefits they were not eligible for. The case led to more scrutiny of the pair’s business practices by San Francisco authorities, specifically from San Francisco City Atty. David Chiu, whose office later alleged that one of the couple’s companies was profiting from illegal tows.

In August 2023, the City Attorney initiated debarment proceedings against Auto Towing after the company violated multiple state and local laws by illegally towing vehicles from private property. Between February and May 2023, Auto Towing employees illegally towed several cars from a bank parking lot in the Portola neighborhood without the permission of the property owner. It is unlawful for a tow company to tow a car from private property without the consent of the property owner. In February 2024, Chiu moved to suspend the company. Auto Towing, and its affiliates, which included Specialty Towing, from receiving contracts from the city.

The perpetrator also made it difficult for vehicle owners to retrieve their vehicles, restricted the hours when vehicles could be retrieved, and pressured vehicle owners to pay in cash. Under the California Vehicle Code, vehicle owners have the right to retrieve their vehicles 24 hours a day, any day of the year, and have the right to pay with cash or major credit card. The victims whose cars were towed were primarily Spanish- and Cantonese-speaking residents, who are especially vulnerable to predatory tows.

Specialty Towing came under public scrutiny two months later when a bystander recorded one of its trucks trying to tow a woman’s car as she was driving in San Francisco. “We were freaking out calling and basically rolling down our window and saying, ‘Hey what you are doing? You can’t be doing that,’ ” the driver, identified only as Joanne, told ABC 7 News in an interview. “He started backing up and his lever came down and basically he was just backing up trying to latch onto our car.”

The video of this incident is horrifying. the driver was waiting on a public street behind a tow truck stopped for a red light. The two truck driver then dropped his towing apparatus hoping to hook onto Joanne’s car while she was in it with the motor running. She backed up, and the tow truck driver backed up chasing her backward down the street. Had the tow truck driver been successful he would have towed her car away with the motor running, while kidnapping her inside.

Prior to this incident, the city received complaints from multiple victims who were allegedly scammed by Specialty Towing.