Tag: 2026 News

The California Insurance Commissioner and newly-appointed Senate Insurance Committee Chair Steve Padilla announced Senate Bill 876, a comprehensive legislative reform to speed up disaster recovery for homeowners and renters through improved insurance coverage and expanded consumer protections. They are proposing legislation directly responding to wildfire disaster survivors’ call for swifter claims payments and an end to delays and runarounds by insurance companies.

The Department of Insurance said that “The payment of insurance claims from insurance companies for the Los Angeles wildfires is already the fastest on record, with $22.4 billion distributed since January 2025, along with $6 billion in federal, state, local, and private donations committed.

According to the DOI press release the “Disaster Recovery Reform Act, authored by Senator Padilla, aims to cut red tape, improve payouts, and end delays and runarounds by insurance companies.”

– – Requiring a “disaster recovery plan” from insurers for handling claims and meeting timelines – reviewed by the Department in advance and put into effect in an emergency situation.
– – Doubling penalties during a declared emergency for violations of insurance fair claims practices and settlement law.
– – Requiring insurance companies pay restitution directly to policyholders when they violate the law.
– – Addressing delays resulting from the assigning of multiple adjusters by requiring insurance company status reports to policyholders within 5 days anytime a new adjuster is assigned.
– – Improving recovery by expanding policy limits for Additional Living Expenses by 100% in a declared disaster.
– – Expanding up-front payments by requiring Actual Cash Value and structure replacement cost be paid quickly following a total loss, with interest payable if late.
– – Providing adequate recovery funds by requiring a mandatory offer of extended and guaranteed replacement cost coverage when writing a policy, and regular updated replacement cost estimates for new business and renewals.
– – Safer rebuilding by applying mandatory building code upgrade coverage at the time of rebuild – not at the time of loss – to account for updated rules.

The DOI said that this “legislation builds on major legislative reforms that Commissioner Lara sponsored last year after the Los Angeles wildfires. These newly enacted laws establish a wildfire safety grant mitigation program, expand insurance discounts, speed up claim payouts for wildfire survivors, extend non-renewal moratorium protections to businesses, strengthen the financial stability of the FAIR Plan, and modernize outdated insurance laws to improve transparency and accountability.”

Charles River Laboratories, Inc. (CRL), successor by merger to Explora Biolabs Holdings, Inc., has agreed to pay $1,000,000 to resolve allegations that Explora engaged in the unlawful manufacturing and distribution of controlled substances between 2019 and 2022 in violation of the Controlled Substances Act (CSA). CRL also entered into a separate agreement with the U.S. Drug Enforcement Administration (DEA) that contains provisions to ensure the company’s compliance with the CSA over the next three years.

Explora, a provider of contract vivarium research services, was previously registered with the DEA for its facilities in South San Francisco and San Diego. Both facilities held Researcher registrations, which generally do not authorize the manufacture or distribution of controlled substances.

Explora was acquired by CRL in April 2022 for approximately $295 million in cash, as part of CRL’s expansion into contract vivarium research services, but public SEC filings from CRL do not delve into the specifics of the pre-acquisition violations or any internal investigations.

Charles River Laboratories, Inc. (CRL) operates as a contract research organization (CRO) in California, providing products and services to support drug discovery, early-stage development, and manufacturing for pharmaceutical and biotechnology clients.

Their operations in the state include rodent breeding facilities in Hollister, as well as multiple Charles River Accelerator and Development Lab (CRADL) sites offering turnkey rentable vivarium spaces and in vivo research support services in regions like the San Francisco Bay Area and Thousand Oaks. This includes contract vivarium management, preclinical testing, and related infrastructure for biotech companies.

A vivarium is an enclosed area or container designed for keeping and raising live animals or plants under conditions that simulate their natural environment, typically for observation, research, or as pets. It can range from simple glass terrariums for small reptiles or insects to larger laboratory facilities for scientific studies. In research contexts, like those involving biotech or pharmaceutical companies, vivariums often house animal models (such as rodents) for preclinical testing and must meet strict standards for humidity, temperature, lighting, and biosecurity.

U.S attorneys alleged that Explora nevertheless engaged in those activities at its South San Francisco and San Diego facilities without the appropriate registration. Based on its investigation, they claimed that Explora unlawfully manufactured and distributed controlled substances in at least 178 instances, in violation of provisions of the CSA that closely regulate the manufacture, distribution, dispensation, importation, and exportation of controlled substances, and that Explora also violated multiple recordkeeping requirements of the CSA.

The United States alleged that CRL has successor liability for Explora’s violations of the CSA, but does not allege that CRL itself violated the CSA.

“DEA registrants play a critical role in protecting the public and that responsibility starts with strict compliance to the Code of Federal Regulations,” said San Diego Division DEA Special Agent in Charge James Nunnallee. “When or if a company chooses to ignore these obligations, it puts communities at risk and undermines the safeguards designed to keep the public safe. DEA holds registrants accountable and in turn, expects them to keep the public safe.”

Assistant U.S. Attorney Michael Pyle handled this matter for the government. The investigation and settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Northern District of California, and DEA Diversion Investigators in San Francisco and San Diego.  

There is no indication that litigation was filed in court regarding this case. The matter was resolved through a civil settlement agreement with the U.S. Department of Justice to address the allegations of Controlled Substances Act violations, without any formal complaint or lawsuit being initiated in a judicial proceeding.

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

Manuel Contreras worked for Green Thumb Produce, Inc., a produce packaging company, from 2016 to 2020, primarily in the sanitation department driving forklifts. During his employment, he discovered he was being paid less than other employees performing similar duties, including some with less seniority. He raised this pay disparity with his supervisors multiple times, but no action was taken. In August 2020, Contreras researched his legal rights, believing the law required equal pay for equal work. He contacted the Labor Commissioner’s Office in San Bernardino County, where a deputy labor commissioner suggested Green Thumb might be violating the law and referred him to the California Equal Pay Act (EPA) and the office’s website.

Contreras reviewed a seven-page FAQ document titled “California Equal Pay Act: Frequently Asked Questions,” which he interpreted as applying to his situation, even though he did not believe the pay difference was due to his gender, race, or ethnicity. On September 3, 2020, he brought the FAQ to work to request a raise from human resources. During lunch, he discussed it with coworkers to find a witness, leading to an encounter with his manager, Miguel Ramos, who took him to HR manager Sendy Ochoa. Contreras explained the FAQ and requested a raise, but Ochoa denied it, accused him of insubordination after he stated he would no longer drive a forklift (meaning additional duties, not his primary one), and sent him home. The next day, Contreras was terminated via security escort and a letter citing violations of company policies, such as disrupting work and refusing instructions.

In 2021, Contreras sued Green Thumb Produce, Inc., for wrongful termination. In his operative first amended complaint filed in 2023, he asserted three causes of action under the California Labor Code: (1) retaliation for exercising employment rights (§ 98.6), (2) whistleblower retaliation (§ 1102.5(b)), alleging he was fired for reporting a believed EPA violation, and (3) retaliation for discussing wages (§ 232). The case proceeded to a jury trial in 2023. The jury found in Contreras’s favor on all three claims, awarding $53,000 in past economic damages, $72,428 in future economic damages, and $47,000 in past non-economic damages, totaling $172,428, plus statutory penalties.

After the verdict, Green Thumb filed a motion for partial judgment notwithstanding the verdict (JNOV) on August 18, 2023, challenging only the whistleblower retaliation claim under § 1102.5(b). The trial court granted the partial JNOV, ruling that Contreras’s testimony showed he had not complained of any actual legal violation and could not “make up a non-existent law” for § 1102.5 protections. It entered a second amended judgment on November 20, 2023, reducing penalties to $10,000 (for § 98.6 only) and awarding Contreras $182,428 total. Contreras appealed this ruling, arguing substantial evidence supported the jury’s finding of his reasonable belief in an EPA violation.

The Court of Appeal reversed the JNOV ruling and directed the trial court to reinstate the jury’s verdict in the published case of Contreras v Green Thumb Produce -D085440 (December 2025).

The Court of Appeal first clarified that § 1102.5(b), California’s whistleblower statute, protects employees from retaliation for disclosing information they reasonably believe reveals a legal violation, emphasizing objective reasonableness without requiring proof of an actual violation.

It rejected Green Thumb’s argument that a mistaken legal interpretation automatically defeats a claim, identifying three scenarios of employee mistakes (law, facts, or both) and focusing on reasonableness to align with the statute’s purpose of encouraging reports without fear.

The court dismissed hypotheticals of patently unreasonable beliefs (e.g., mandatory 100% raises) as failing the objective reasonableness test. It then found substantial evidence supporting the jury’s verdict: Contreras’s consultation with a deputy labor commissioner (who suggested a possible violation), his lay interpretation of the FAQ (which often omitted protected classes and could mislead a non-lawyer), and his testimony.

The FAQ’s structure, starting with expansions beyond original gender protections and questions like 9 focusing on “substantially similar work,” supported a reasonable lay misinterpretation, especially given the EPA’s name and Contreras’s limited education. The court distinguished this from cases where no legal foundation was cited, noting Contreras pointed to the EPA as his basis.

Veronica McRae filed a claim with the U.S. Department of Labor (DOL) for death benefits as the alleged widow of a deceased worker who had been injured at the Port of Oakland and later passed away. Homeport Insurance, the insurer for the employer, participated in mediation and reached a settlement with McRae. Pursuant to an application under federal law, an administrative law judge (ALJ) issued an order approving the settlement, requiring Homeport to pay McRae $425,000 for all claims related to disability, medical, and death benefits, and an additional $30,000 directly to her attorneys – Philip Weltin, Daniel Weltin, and their firm, Weltin, Streb & Weltin, LLP – for fees and costs.

Approximately nine months later, the decedent’s daughter informed Homeport that her father had not been married to McRae at the time of his death. Homeport’s investigation revealed a 2010 judgment dissolving the marriage between McRae and the decedent, as well as McRae’s unsuccessful 2022 motion to set aside that default judgment. Homeport then moved with the DOL to vacate the ALJ’s order, alleging it was procured through McRae’s fraud.

While that motion was pending, Homeport initiated a state court lawsuit in Alameda County Superior Court against McRae and her attorneys asserting claims for conversion, imposition of a constructive trust, unjust enrichment, and injunctive and declaratory relief. It also sued McRae separately for fraud.

The attorneys filed a special motion to strike Homeport’s complaint under California’s anti-SLAPP statute (Code Civ. Proc., § 425.16), arguing that the claims arose from their protected petitioning activity in representing McRae in the administrative proceeding. They contended Homeport could not prevail because it had no ownership interest in the attorney fees (which were ordered paid directly by the ALJ), the litigation privilege (Civ. Code, § 47) barred liability, and the economic loss rule applied. Homeport opposed the motion, arguing it was untimely, the claims did not arise from protected activity (but rather McRae’s fraud, which was not a public issue), the illegality exception to anti-SLAPP applied, and it had a probability of prevailing based on evidence of McRae’s misrepresentation and its right to the funds.

The trial court granted the attorneys’ anti-SLAPP motion and struck Homeport’s complaint in its entirety. The Court of Appeal affirmed the trial court’s order striking the complaint in the unpublished case of Homeport Insurance v. McRae -A172243 (December 2025).

The Court of Appeal conducted a de novo review, applying the two-prong anti-SLAPP framework. On prong one (protected activity), the court focused on whether the attorneys’ conduct giving rise to liability fell under section 425.16, subdivision (e) – statements or writings in judicial or official proceedings. It concluded that Homeport’s claims, particularly the conversion claim (from which the others derived), arose from the attorneys’ prosecution of McRae’s allegedly fraudulent LHWCA claim and the procurement of the ALJ order.

The court emphasized that the “wrongful act” element of conversion was tied to these petitioning activities, not merely the receipt of funds. It distinguished cases like Drell v. Cohen (2014) and Optional Capital, Inc. v. DAS Corp. (2014), where protected activity was incidental, and analogized to Rusheen v. Cohen (2006), where noncommunicative acts (like levying on property) were protected if necessarily related to privileged communications.

The court rejected Homeport’s argument that the attorneys failed to identify specific protected acts, as the claims were not “mixed” but entirely based on protected conduct. It also dismissed the illegality exception from Flatley v. Mauro (2006), finding no conclusive evidence that the attorneys knowingly made false representations under the LHWCA’s fraud provision (33 U.S.C. § 931(a)).

On prong two (probability of prevailing), the court held that Homeport failed to meet its burden. It noted Homeport forfeited any challenge to the litigation privilege by not addressing it in its opening brief, but even on the merits, the privilege applied to communications and related acts in the administrative proceeding, including receipt of fees under the ALJ order. Drawing again from Rusheen, the court reasoned that the attorneys’ retention of funds was not an independent wrong but stemmed from the privileged prosecution of the claim.

Homeport also failed to show conversion, as it lacked evidence of a right to the fees or wrongful possession by the attorneys. The court dismissed Homeport’s reliance on a temporary restraining order against McRae (obtained before the attorneys appeared) and other undeveloped arguments, such as public interest concerns or comparisons to New York and Texas law.

The court remanded for the trial court to determine the attorneys’ appellate attorney fees and costs under section 425.16, subdivision (c), as prevailing defendants are entitled to them..