- WCAB Rules UR Denial Needs Adequate Medical History Recordson March 27, 2025 at 5:09 PM
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."
- SoCal Medical Group to Pay $62M to Settle False Claims Lawsuiton March 27, 2025 at 5:09 PM
Seoul Medical Group Inc. and its subsidiary Advanced Medical Management Inc., headquartered in the Koreatown area of Los Angeles, have agreed to pay $58.74 million and their former president and majority owner, Dr. Min Young Cha, has agreed to pay $1.76 million for allegedly violating the False Claims Act by causing the submission of false diagnosis codes for two spinal conditions to increase payments from the Medicare Advantage program.
Renaissance Imaging Medical Associates Inc., a Northridge-based radiology group that worked with Seoul Medical, has also agreed to pay $2.35 million for allegedly conspiring with Seoul Medical Group in connection with the false diagnoses for the two spinal conditions.
“The false claims to Medicare resulted in millions of dollars in losses to the government,” said Acting U.S. Attorney Joseph McNally. “Through this $62.85 million settlement we have recouped those losses and the healthcare providers who made the false claims are paying millions of dollars in additional damages.”
Seoul Medical Group is a healthcare provider that started in 1993 in Los Angeles and has since expanded into at least six states and has employed at times 150 primary care providers and 1,000 specialists. Dr. Min Young Cha started Seoul Medical Group and until 2023 was president and majority owner.
The United States alleged that, from 2015 to 2021, Seoul Medical Group and Dr. Cha submitted diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not suffer from either of these conditions.
When Seoul Medical Group was questioned by an MA Plan about its use of spinal enthesopathy, Seoul Medical Group enlisted the assistance of Renaissance Imaging Medical Associates to create radiology reports that appeared to support the spinal enthesopathy diagnosis. Both diagnoses resulted in an increase in payment from CMS to the MA Plan, and the MA Plan then passed along a portion of the increased payment to Seoul Medical Group.
The civil settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Paul Pew, the former Vice President and Chief Financial Officer of Advanced Medical Management. Under those provisions, 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 of America ex rel. Pew v. Seoul Medical Group, Inc., et al., No. 2:20-cv-05156 (C.D. Cal.). The relator’s share of the settlement has not yet been determined.
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, and the United States Attorney’s Office for the Central District of California, with assistance from the Department of Health and Human Services Office of the Inspector General.
Assistant United Sates Attorney Karen Y. Paik of the Civil Division’s Civil Fraud Section and Trial Attorneys J. Jennifer Koh and Robbin O. Lee of the Justice Department’s Fraud Section investigated this matter.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
- Bay Area Tow Truck Auto Fraud Conspiracies - Out of Controlon March 26, 2025 at 1:22 PM
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.
- Jury Convicts San Diego Attorney for Fraud Schemeson March 26, 2025 at 1:21 PM
Andrew Coldicutt graduated from the University of British Columbia with a Bachelors of Arts in 2004. He then moved to San Diego, California and go to law school and graduated from law school in 2007 and passed the 2008 California Bar Exam.
Coldicutt became a securities attorney based in San Diego, California. He specialized in corporate law, securities compliance, and governance for both private and public companies. His law office provides services such as SEC filings, private offerings, and corporate transactions.
After a weeklong trial, Coldicutt was convicted by a federal jury on all 17 counts of securities fraud, false securities registration statements, and wire fraud in connection with two pump-and-dump market-manipulation schemes.
The jury deliberated for less than four hours and determined that Coldicutt used his expertise as an experienced securities lawyer to help clients – who were actually undercover FBI agents – create companies, take them public, release false information about the companies, manipulate the stock for a windfall and conceal their affiliation with those companies.
In the first scheme, Coldicutt worked with others from 2017 through 2019 to prepare and execute a pump-and-dump stock fraud scheme. Coldicutt created a business plan for a fake backyard fruit harvesting company. He prepared and filed securities registration statements with the U.S. Securities and Exchange Commission for an initial public offering of the company’s stock. The securities registration statements contained false and misleading information about the company, its business plans, and the people who owned and controlled the company.
In the second scheme, in 2019, one of Coldicutt’s corporate clients needed to raise money fast. Rather than raise money legally, Coldicutt presented the undercover FBI agents with another pump-and-dump stock fraud scheme. Coldicutt wrote a false attorney opinion letter to facilitate the sale of stock for the pump-and-dump scheme.
During the trial, the government presented multiple recordings connecting Coldicutt to the crimes, including inventing the business plan in the middle of a meeting with undercover FBI agents. Coldicutt was also recorded accepting $2,500 in cash as an advance on successfully completing the pump-and-dump scheme. Jurors were also presented with encrypted messages where Coldicutt coordinated the plans for the pump-and-dump with a cooperating source.
According to testimony during the trial, the expected profit of the first pump-and-dump scheme was approximately $4.85 million, and Coldicutt’s share would be about $240,000. Since Coldicutt was actually working with undercover FBI agents and sources gathering evidence against him, no investors were injured.
A “pump and dump” scheme is a type of fraud where manipulators gain control over a company’s stock and boost a company's stock price by spreading false information or trading in a way that creates fake demand. Once the stock price is inflated, they sell off their shares (the “dump”), causing the price to drop and leaving investors with losses.
“Andrew Coldicutt engaged in a deliberate, unlawful and years long securities fraud scheme,” said FBI San Diego Special Agent in Charge Stacey Moy. “Attorneys are held to a higher standard of conduct and this case proves when an individual in a position of trust abuses their authority for unjust personal gain, the FBI will hold them accountable.”
The defendant is scheduled to be sentenced on July 11, 2025, before U.S. District Judge Jinsook Ohta. The Securities and Exchange Commission has also taken civil action against Coldicutt.
- Treatment Center Operator Convicted for $2.9M in Kickbackson March 25, 2025 at 3:12 PM
A Hollywood Hills man was sentenced to 41 months in federal prison for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County.
Casey Mahoney, 48, was sentenced by United States District Judge Josephine L. Staton, who also fined him $240,000.
At the conclusion of a nine-day trial in September 2024, a jury found Mahoney guilty of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals and seven counts of receiving illegal kickbacks for patient referrals.
The charges relate to Mahoney’s operation of two addiction treatment facilities: the Huntington Beach-based Healing Path Detox LLC, and the San Juan Capistrano-based Get Real Recovery Inc.
From at least October 2018 to December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities. Those body brokers in turn paid thousands of dollars in cash to patients. Brokered patients sometimes were dropped off at motels in Orange County and introduced to drug dealers. Some of these patients later overdosed and died.
Brokers also arranged for patients to receive drugs to make them eligible for more lucrative levels of care at Mahoney’s facilities. Mahoney paid one broker $140,000 per month for additional patients despite knowing that brokers offered to get some patients high. Mahoney also requested that his employees send brokers to track down former patients with lucrative insurance policies, which he called his “most wanted list.”
Throughout the scheme, Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals.
In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment.
The FBI and IRS Criminal Investigation investigated this matter. The California Department of Insurance provided valuable assistance.
Assistant United States Attorney Nandor F.R. Kiss of the Orange County Office and Justice Department Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section prosecuted this case.
Mahoney’s conviction arose out of violations of the Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address the opioid crisis and to target the rise in body brokering and substance abuse facility profiteering.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24.7 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
- Carson Tahoe Health System to Pay $8.8M for Unlawful Benefitson March 25, 2025 at 3:12 PM
Carson Tahoe Health System, which owns Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital, has agreed to pay $8,876,475.45 to settle allegations that they were not eligible for the four Paycheck Protection Program loans that they obtained, Acting U.S. Attorney Michele Beckwith announced.
Congress created the Paycheck Protection Program (PPP) in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security Act, to provide relief to small businesses experiencing economic hardship during the COVID-19 pandemic. To qualify for a loan, businesses were required to meet certain eligibility requirements accounting for any affiliated entities. The United States contends that Carson Tahoe Health System and its affiliated entities were ineligible to receive PPP loans because they exceeded the size limitations in the Small Business Administration’s affiliation rules.
In May 2020, Carson Tahoe Health System, Carson Tahoe Physician Clinics, and Carson Tahoe Continuing Care Hospital each received a PPP loan, totaling $5,077,011 in loan disbursements. After receiving their loan forgiveness applications, the Small Business Administration forgave these loans. In February 2021, Carson Tahoe Physician Clinics applied for a second PPP loan of $2 million. After Carson Tahoe Physicians Clinic requested loan forgiveness in September 2021, the SBA forgave this PPP loan. The four loans resulted in the United States paying $7,267,009 including forgiven loan principal and interest, and lenders fees.
SBA’s General Counsel Wendell Davis stated, “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office and SBA’s Office of Inspector General to pursue recovery from those who obtained essential government program funds when they were ineligible to do so.”
The settlement stems from allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with the settlement, the relator will receive a percentage of the recovery.
“This settlement returns millions of taxpayer dollars to the government and reflects our ongoing commitment to enforce the requirements of the Paycheck Protection Program and ensure that only eligible businesses received this critical pandemic relief,” said Acting U.S. Attorney Beckwith.
The matter was handled by Assistant U.S. Attorney Tara Amin for the Eastern District of California.The claims resolved by this settlement are allegations only, and there has been no determination of liability.
- Workers' Comp Claim Does Not Toll FEHA Statute of Limitationson March 24, 2025 at 3:00 PM
Sonoco Products Company makes packaging, including paper canisters for frozen juice and other products. Steven Hernandez - who is now in his 50s - began working for Sonoco in 1987 when he was 18. Hernandez was represented by Teamsters District Council 2 and was subject to the terms of its labor agreement with Sonoco.
Sometime between 2013 and 2016, Hernandez began suffering pain in his hands due to arthritis. Hernandez sought medical treatment and began taking intermittent leave under the Family Medical Leave Act (FMLA) (and/or the California Family Rights Act (CFRA)).
Sonoco uses forms to track employee absences. Employees with unexcused absences accumulate points. In November 2017, a supervisor gave Hernandez a form stating he had violated Sonoco’s attendance policy. The form warned Hernandez to “correct” his attendance immediately, noting he could be terminated if he accumulated more points. After a further dispute about Hernandez’s attendance, and an investigation into his attendance points, which “confirmed” he had “provided false information to the company,” Sonoco fired Hernandez on December 18, 2017.
Hernandez filed a grievance through the union. Hernandez’s union representatives asked Sonoco to reinstate him subject to a last chance agreement (LCA). The company agreed. Hernandez returned to work that month.
One of Sonoco’s safety rules required employees who used the compactor - which crushed trash - to close the guard or gate before leaving the area. On December 12, 2018, Hernandez left open the guard gate on a company compactor. OSHA regulates these machines because of their danger to workers. Sonoco fired Hernandez because he left open the guard gate on a company compactor.
In 2020, Hernandez sued Sonoco and others for disability and age discrimination and related employment claims under the Fair Employment and Housing Act. Hernandez had filed his administrative complaint about his dismissal on September 20, 2019. Accordingly, the trial court ruled that, given the one-year statute of limitations, the limitations period was September 20, 2018 - one year before Hernandez filed - to September 20, 2019, although Hernandez was terminated on December 12, 2018. The trial court ruled litigation about events before September 20, 2018 was time-barred.
The Court of Appeal affirmed the dismissal in the unpublished case of Hernandez v. Sonoco Products Company - B325376 (March 2025).
“A plaintiff suing for violations of FEHA ordinarily cannot recover for acts occurring more than one year before the filing of the DFEH complaint.” (Jumaane v. City of Los Angeles (2015) 241 Cal.App.4th 1390, 1400 (Jumaane).) As Hernandez filed his DFEH complaint on September 20, 2019, any of his claims based on alleged unlawful conduct that took place before September 20, 2018 are barred.
Hernandez contends his DFEH complaint was timely as to Sonoco’s conduct before September 20, 2018 - including his 2017 termination and the LCA - based on the continuing violations doctrine, equitable estoppel, and equitable tolling.
The continuing violations doctrine allows a plaintiff to impose liability for unlawful employer conduct occurring outside the statute of limitations if the conduct is sufficiently connected to unlawful conduct within the limitations period. (Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 802 (Richards).)
The doctrine requires the plaintiff to prove that (1) the conduct occurring outside the limitations period was similar or related to the conduct that occurred within the limitations period; (2) the conduct was reasonably frequent; and (3) the conduct had not yet become permanent. (Ibid.; Richards, at p. 823.)
The Last Chance Agreement was a permanent resolution of the earlier conflict between Hernandez and Sonoco. As a matter of law, this document put Hernandez on notice that further efforts at informal conciliation with Sonoco to obtain accommodation or to end harassment would be futile.
The trial court rejected Hernandez’s attempt to invoke equitable estoppel because his complaint did not allege it, as is required. Moreover, Hernandez presented no evidence in opposition to Sonoco’s summary judgment motion to support the imposition of an estoppel based on his having signed the LCA.
Hernandez contends his filing of his workers’ compensation claim on February 4, 2019 should equitably toll the statute of limitations as to his harassment cause of action. He says his allegation in the claim that he suffered “ ‘psych and stress (due to harassment and pressure from management)’ ” should have “alerted Flores and Sonoco to begin investigating the facts that formed the basis of [his] harassment claims under FEHA.”
"Two problems independently defeat Hernandez’s argument in this court about equitable tolling. First, he neither pleaded the elements of equitable tolling nor alleged he’d filed a worker’s compensation claim on February 4, 2019. Second, Hernandez did not timely raise the issue of equitable tolling in the trial court."
- CWCI New Hire Notices Are Updated for 2025on March 24, 2025 at 3:00 PM
The California Workers’ Compensation Institute (CWCI) has received state approval of an update to its “Facts About Workers’ Compensation” new hire notice which claims organizations and employers use to meet the statutory requirements to provide new employees with basic information about workers’ compensation (Labor Code §3551).
CWCI revised its new hire notice after Gov. Newsom signed AB 1870 last year. That bill amended Labor Code §3550 to require the addition of information on an employee’s right to consult an attorney to the workers’ compensation posting notice (DWC 7 form) that employers must display at their worksites. The change to the posting notice led to a similar revision to CWCI’s new hire notice because under state law (Labor Code §3551) new employees must receive written notice of the information in Labor Code §3550.
Workers’ compensation notice requirements [Labor Code §3550(f) and §3551(c)] also specify that insurers shall provide the posting notices and new hire notices to their policyholders with advice concerning the statutory notice requirements and penalties for failure to provide the notices to employees. These can include audit penalties, loss of employer medical control, thousands of dollars in civil penalties for each violation of the posting requirement, and a tolling of the statute of limitations for filing a claim.
Following enactment of AB 1870, the state Division of Workers’ Compensation revised the DWC 7 posting notice and made it available online.
State regulations [CCR 9883(a)] allow private enterprises to prepare and publish their own versions of the Written Notice to New Employees if it is approved by the Division, so CWCI revised and submitted an updated copy of its Facts About Workers’ Compensation for review and approval. The state approved the revised version last month, after which the Institute copyrighted its notice, translated it into Spanish, typeset the revised versions, and had them printed.
The updated Facts About Workers’ Compensation Notice to New Employees in English and Spanish is now in stock and available for purchase along with the 5-part DWC-1 Claim Form and Notice of Potential Eligibility, which did not need to be updated, and CWCI’s Facts For Injured Workers pamphlet, which is not mandatory, but is often used early in the life of a claim to remind injured workers of their rights and obligations.
All of these publications are available in sets of 100 through the Institute’s online store. CWCI members are eligible for a 15 percent discount on these products if the subtotal on their order is $1,000 or more. For questions about ordering, call CWCI at (510) 251-9470.
- Annual Report: Santa Monica Workers’ Comp Claims Surgeon March 20, 2025 at 3:35 PM
According to an annual report released Tuesday and a review of that report by the Santa Monica Daily Press, Santa Monica’s workers' compensation program saw a significant 29.5% increase in total liabilities during the 2023-24 fiscal year, largely driven by three catastrophic claims that accounted for $7.9 million of the $8.2 million total increase.
According to City Finance Director Oscar Santiago, total program liabilities reached $36 million by June 30, up from $27.8 million in the previous fiscal year. Despite this sharp increase, the city's self-insured retention program liabilities showed stability, decreasing slightly by 0.4% to $24.3 million - their lowest level in a decade.
However the SMDP review said that the report does not go into detail regarding the catastrophic claims but it does say one originated from the police department and two came out of the fire department. These departments have historically represented the highest risk categories for workplace injuries among city employees according to the report.
Program expenses also increased dramatically, jumping 29.2% from $13 million to $16.8 million. Medical payments experienced the most significant growth, increasing by 71% year-over-year. This surge was largely attributed to dramatic increases in hospital fees, which rose 264%, and nursing/home care payments, which skyrocketed 652%.
"These increases were primarily due to catastrophic claims requiring extensive medical care," Santiago noted in the report. "In contrast, routine medical costs, measured by doctor's fees, remained relatively stable with a 4% increase year-over-year."
The report also highlighted a concerning reversal in claim frequency trends. Following a post-pandemic decline that reached a ten-year low of 245 claims in FY 2022-23, new claims jumped 20% to 294 in FY 2023-24. The Police Department was identified as the primary driver of this increase, with its employees filing 96 claims — a 35% increase from the previous year.
The severity of claims has also worsened. Claims involving lost time and/or litigation increased from 55% to 66% of total claims, representing 195 claims in FY 2023-24 compared to 135 in the previous year.
Despite these challenges, the city reported some success in claim management. While the open claim inventory grew to 592 claims, this 6.9% increase was significantly smaller than the 20.2% rise in claim frequency, demonstrating what officials called "efficient inventory control."
According to the report, the average claim cost for program participants was $35,458, compared to $101,631 for litigated claimants — a reduction of $66,173 per claim. The total program impact was estimated at up to $37.9 million in savings.
The city's Return-to-Work Program also demonstrated success, placing 67 injured workers in temporary light duty assignments during FY 2023-24. This allowed the city to recoup 4,399 lost days and save an estimated $925,000 in temporary disability costs.
A pilot program using a third-party administrator (TPA) for the Department of Transportation's workers' compensation claims has yielded positive results. Total liabilities for DoT claims declined from $7.4 million to $3.9 million by July 30, 2024, while total expenses decreased by $975,106 from FY 2016-17 levels.
Given these successes, city officials are evaluating the potential expansion of the TPA model to additional departments, focusing on non-public safety departments. The forthcoming Request for Proposal for Workers' Compensation Claims Administration Services will include an option for TPA to manage claims for all departments except Police and Fire.
- Cal/OSHA Cites Contractor $157.5K for Open Trench Deathon March 20, 2025 at 3:34 PM
W.A. Rasic Construction is a general contractor specializing in infrastructure projects across the Western United States. Their headquarters is located at 4150 Long Beach Boulevard, Long Beach, CA 90807. The company has been in operation since 1978 and is known for its diverse expertise in utility construction.
The California Division of Occupational Safety and Health (Cal/OSHA) has issued $157,500 in citations to W. A. Rasic Construction for multiple violations of workplace safety regulations following a fatal trench collapse. The incident resulted in the tragic death of an employee working in an unprotected excavation.
On August 28, 2024 Joel Olea Gomez and another worker were in the trench in the Scripps Ranch community in San Diego when a cave-in occurred at about 4 a.m. The men were working on a city water project.The collapse caused a concrete pipe to be displaced.
One of the workers escaped the trench, but 27-year-old Joel Olea Gomez became trapped at the bottom under dirt and a 4-foot-diameter reinforced concrete pipe. He was pronounced dead on the scene by San Diego Fire-Rescue personnel. His body was recovered at about 9 a.m. after an extensive operation. This is the third trench death in California since 2023.
Cal/OSHA’s investigation identified serious violations of workplace safety regulations related to excavation and trench safety.
Violations Identified by Cal/OSHA:
- - Failure to implement an effective injury and illness prevention program: W. A. Rasic Construction did not implement an effective injury and illness prevention program to identify, evaluate, and correct workplace hazards, and provide training, a requirement that has been in place for more than 30 years. This failure exposed employees to the hazards associated with working in an unshored trench.
- - Failure to conduct a proper inspection of the excavation site: The employer’s inspection failed to identify conditions that could lead to dangerous cave-in hazards or the lack of necessary protective systems, such as trench boxes or shoring, which could have prevented the collapse.
- - Failure to Provide Adequate Cave-In Protection: The employer did not provide the necessary cave-in protection for employees working in an excavation approximately 17 feet deep. This critical safety failure exposed workers to the risk of fatal injury, as evidenced by the incident. Employers have the right to appeal any Cal/OSHA citation and notification of penalty by filing an appeal with the Occupational Safety and Health Appeals Board within 15 working days from the receipt of notification.
Cal/OSHA Chief Debra Lee said: “No worker should lose their life due to preventable safety failures. We will continue to enforce trench safety regulations, hold employers accountable and work to ensure that safety standards are upheld to protect workers.”
Cal/OSHA helps protect workers from health and safety hazards on the job in almost every workplace in California. Employers and workers who have questions or need assistance with workplace health and safety programs can call Cal/OSHA’s Consultation Services Branch at 800-963-9424.
- WCAB Rules UR Denial Needs Adequate Medical History Recordson March 27, 2025 at 5:09 PM
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." - SoCal Medical Group to Pay $62M to Settle False Claims Lawsuiton March 27, 2025 at 5:09 PM
Seoul Medical Group Inc. and its subsidiary Advanced Medical Management Inc., headquartered in the Koreatown area of Los Angeles, have agreed to pay $58.74 million and their former president and majority owner, Dr. Min Young Cha, has agreed to pay $1.76 million for allegedly violating the False Claims Act by causing the submission of false diagnosis codes for two spinal conditions to increase payments from the Medicare Advantage program.
Renaissance Imaging Medical Associates Inc., a Northridge-based radiology group that worked with Seoul Medical, has also agreed to pay $2.35 million for allegedly conspiring with Seoul Medical Group in connection with the false diagnoses for the two spinal conditions.
“The false claims to Medicare resulted in millions of dollars in losses to the government,” said Acting U.S. Attorney Joseph McNally. “Through this $62.85 million settlement we have recouped those losses and the healthcare providers who made the false claims are paying millions of dollars in additional damages.”
Seoul Medical Group is a healthcare provider that started in 1993 in Los Angeles and has since expanded into at least six states and has employed at times 150 primary care providers and 1,000 specialists. Dr. Min Young Cha started Seoul Medical Group and until 2023 was president and majority owner.
The United States alleged that, from 2015 to 2021, Seoul Medical Group and Dr. Cha submitted diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not suffer from either of these conditions.
When Seoul Medical Group was questioned by an MA Plan about its use of spinal enthesopathy, Seoul Medical Group enlisted the assistance of Renaissance Imaging Medical Associates to create radiology reports that appeared to support the spinal enthesopathy diagnosis. Both diagnoses resulted in an increase in payment from CMS to the MA Plan, and the MA Plan then passed along a portion of the increased payment to Seoul Medical Group.
The civil settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Paul Pew, the former Vice President and Chief Financial Officer of Advanced Medical Management. Under those provisions, 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 of America ex rel. Pew v. Seoul Medical Group, Inc., et al., No. 2:20-cv-05156 (C.D. Cal.). The relator’s share of the settlement has not yet been determined.
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, and the United States Attorney’s Office for the Central District of California, with assistance from the Department of Health and Human Services Office of the Inspector General.
Assistant United Sates Attorney Karen Y. Paik of the Civil Division’s Civil Fraud Section and Trial Attorneys J. Jennifer Koh and Robbin O. Lee of the Justice Department’s Fraud Section investigated this matter.
The claims resolved by the settlement are allegations only and there has been no determination of liability. - Bay Area Tow Truck Auto Fraud Conspiracies - Out of Controlon March 26, 2025 at 1:22 PM
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. - Jury Convicts San Diego Attorney for Fraud Schemeson March 26, 2025 at 1:21 PM
Andrew Coldicutt graduated from the University of British Columbia with a Bachelors of Arts in 2004. He then moved to San Diego, California and go to law school and graduated from law school in 2007 and passed the 2008 California Bar Exam.
Coldicutt became a securities attorney based in San Diego, California. He specialized in corporate law, securities compliance, and governance for both private and public companies. His law office provides services such as SEC filings, private offerings, and corporate transactions.
After a weeklong trial, Coldicutt was convicted by a federal jury on all 17 counts of securities fraud, false securities registration statements, and wire fraud in connection with two pump-and-dump market-manipulation schemes.
The jury deliberated for less than four hours and determined that Coldicutt used his expertise as an experienced securities lawyer to help clients – who were actually undercover FBI agents – create companies, take them public, release false information about the companies, manipulate the stock for a windfall and conceal their affiliation with those companies.
In the first scheme, Coldicutt worked with others from 2017 through 2019 to prepare and execute a pump-and-dump stock fraud scheme. Coldicutt created a business plan for a fake backyard fruit harvesting company. He prepared and filed securities registration statements with the U.S. Securities and Exchange Commission for an initial public offering of the company’s stock. The securities registration statements contained false and misleading information about the company, its business plans, and the people who owned and controlled the company.
In the second scheme, in 2019, one of Coldicutt’s corporate clients needed to raise money fast. Rather than raise money legally, Coldicutt presented the undercover FBI agents with another pump-and-dump stock fraud scheme. Coldicutt wrote a false attorney opinion letter to facilitate the sale of stock for the pump-and-dump scheme.
During the trial, the government presented multiple recordings connecting Coldicutt to the crimes, including inventing the business plan in the middle of a meeting with undercover FBI agents. Coldicutt was also recorded accepting $2,500 in cash as an advance on successfully completing the pump-and-dump scheme. Jurors were also presented with encrypted messages where Coldicutt coordinated the plans for the pump-and-dump with a cooperating source.
According to testimony during the trial, the expected profit of the first pump-and-dump scheme was approximately $4.85 million, and Coldicutt’s share would be about $240,000. Since Coldicutt was actually working with undercover FBI agents and sources gathering evidence against him, no investors were injured.
A “pump and dump” scheme is a type of fraud where manipulators gain control over a company’s stock and boost a company's stock price by spreading false information or trading in a way that creates fake demand. Once the stock price is inflated, they sell off their shares (the “dump”), causing the price to drop and leaving investors with losses.
“Andrew Coldicutt engaged in a deliberate, unlawful and years long securities fraud scheme,” said FBI San Diego Special Agent in Charge Stacey Moy. “Attorneys are held to a higher standard of conduct and this case proves when an individual in a position of trust abuses their authority for unjust personal gain, the FBI will hold them accountable.”
The defendant is scheduled to be sentenced on July 11, 2025, before U.S. District Judge Jinsook Ohta. The Securities and Exchange Commission has also taken civil action against Coldicutt. - Treatment Center Operator Convicted for $2.9M in Kickbackson March 25, 2025 at 3:12 PM
A Hollywood Hills man was sentenced to 41 months in federal prison for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County.
Casey Mahoney, 48, was sentenced by United States District Judge Josephine L. Staton, who also fined him $240,000.
At the conclusion of a nine-day trial in September 2024, a jury found Mahoney guilty of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals and seven counts of receiving illegal kickbacks for patient referrals.
The charges relate to Mahoney’s operation of two addiction treatment facilities: the Huntington Beach-based Healing Path Detox LLC, and the San Juan Capistrano-based Get Real Recovery Inc.
From at least October 2018 to December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities. Those body brokers in turn paid thousands of dollars in cash to patients. Brokered patients sometimes were dropped off at motels in Orange County and introduced to drug dealers. Some of these patients later overdosed and died.
Brokers also arranged for patients to receive drugs to make them eligible for more lucrative levels of care at Mahoney’s facilities. Mahoney paid one broker $140,000 per month for additional patients despite knowing that brokers offered to get some patients high. Mahoney also requested that his employees send brokers to track down former patients with lucrative insurance policies, which he called his “most wanted list.”
Throughout the scheme, Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals.
In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment.
The FBI and IRS Criminal Investigation investigated this matter. The California Department of Insurance provided valuable assistance.
Assistant United States Attorney Nandor F.R. Kiss of the Orange County Office and Justice Department Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section prosecuted this case.
Mahoney’s conviction arose out of violations of the Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address the opioid crisis and to target the rise in body brokering and substance abuse facility profiteering.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24.7 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit. - Carson Tahoe Health System to Pay $8.8M for Unlawful Benefitson March 25, 2025 at 3:12 PM
Carson Tahoe Health System, which owns Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital, has agreed to pay $8,876,475.45 to settle allegations that they were not eligible for the four Paycheck Protection Program loans that they obtained, Acting U.S. Attorney Michele Beckwith announced.
Congress created the Paycheck Protection Program (PPP) in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security Act, to provide relief to small businesses experiencing economic hardship during the COVID-19 pandemic. To qualify for a loan, businesses were required to meet certain eligibility requirements accounting for any affiliated entities. The United States contends that Carson Tahoe Health System and its affiliated entities were ineligible to receive PPP loans because they exceeded the size limitations in the Small Business Administration’s affiliation rules.
In May 2020, Carson Tahoe Health System, Carson Tahoe Physician Clinics, and Carson Tahoe Continuing Care Hospital each received a PPP loan, totaling $5,077,011 in loan disbursements. After receiving their loan forgiveness applications, the Small Business Administration forgave these loans. In February 2021, Carson Tahoe Physician Clinics applied for a second PPP loan of $2 million. After Carson Tahoe Physicians Clinic requested loan forgiveness in September 2021, the SBA forgave this PPP loan. The four loans resulted in the United States paying $7,267,009 including forgiven loan principal and interest, and lenders fees.
SBA’s General Counsel Wendell Davis stated, “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office and SBA’s Office of Inspector General to pursue recovery from those who obtained essential government program funds when they were ineligible to do so.”
The settlement stems from allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with the settlement, the relator will receive a percentage of the recovery.
“This settlement returns millions of taxpayer dollars to the government and reflects our ongoing commitment to enforce the requirements of the Paycheck Protection Program and ensure that only eligible businesses received this critical pandemic relief,” said Acting U.S. Attorney Beckwith.
The matter was handled by Assistant U.S. Attorney Tara Amin for the Eastern District of California.The claims resolved by this settlement are allegations only, and there has been no determination of liability. - Workers' Comp Claim Does Not Toll FEHA Statute of Limitationson March 24, 2025 at 3:00 PM
Sonoco Products Company makes packaging, including paper canisters for frozen juice and other products. Steven Hernandez - who is now in his 50s - began working for Sonoco in 1987 when he was 18. Hernandez was represented by Teamsters District Council 2 and was subject to the terms of its labor agreement with Sonoco.
Sometime between 2013 and 2016, Hernandez began suffering pain in his hands due to arthritis. Hernandez sought medical treatment and began taking intermittent leave under the Family Medical Leave Act (FMLA) (and/or the California Family Rights Act (CFRA)).
Sonoco uses forms to track employee absences. Employees with unexcused absences accumulate points. In November 2017, a supervisor gave Hernandez a form stating he had violated Sonoco’s attendance policy. The form warned Hernandez to “correct” his attendance immediately, noting he could be terminated if he accumulated more points. After a further dispute about Hernandez’s attendance, and an investigation into his attendance points, which “confirmed” he had “provided false information to the company,” Sonoco fired Hernandez on December 18, 2017.
Hernandez filed a grievance through the union. Hernandez’s union representatives asked Sonoco to reinstate him subject to a last chance agreement (LCA). The company agreed. Hernandez returned to work that month.
One of Sonoco’s safety rules required employees who used the compactor - which crushed trash - to close the guard or gate before leaving the area. On December 12, 2018, Hernandez left open the guard gate on a company compactor. OSHA regulates these machines because of their danger to workers. Sonoco fired Hernandez because he left open the guard gate on a company compactor.
In 2020, Hernandez sued Sonoco and others for disability and age discrimination and related employment claims under the Fair Employment and Housing Act. Hernandez had filed his administrative complaint about his dismissal on September 20, 2019. Accordingly, the trial court ruled that, given the one-year statute of limitations, the limitations period was September 20, 2018 - one year before Hernandez filed - to September 20, 2019, although Hernandez was terminated on December 12, 2018. The trial court ruled litigation about events before September 20, 2018 was time-barred.
The Court of Appeal affirmed the dismissal in the unpublished case of Hernandez v. Sonoco Products Company - B325376 (March 2025).
“A plaintiff suing for violations of FEHA ordinarily cannot recover for acts occurring more than one year before the filing of the DFEH complaint.” (Jumaane v. City of Los Angeles (2015) 241 Cal.App.4th 1390, 1400 (Jumaane).) As Hernandez filed his DFEH complaint on September 20, 2019, any of his claims based on alleged unlawful conduct that took place before September 20, 2018 are barred.
Hernandez contends his DFEH complaint was timely as to Sonoco’s conduct before September 20, 2018 - including his 2017 termination and the LCA - based on the continuing violations doctrine, equitable estoppel, and equitable tolling.
The continuing violations doctrine allows a plaintiff to impose liability for unlawful employer conduct occurring outside the statute of limitations if the conduct is sufficiently connected to unlawful conduct within the limitations period. (Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 802 (Richards).)
The doctrine requires the plaintiff to prove that (1) the conduct occurring outside the limitations period was similar or related to the conduct that occurred within the limitations period; (2) the conduct was reasonably frequent; and (3) the conduct had not yet become permanent. (Ibid.; Richards, at p. 823.)
The Last Chance Agreement was a permanent resolution of the earlier conflict between Hernandez and Sonoco. As a matter of law, this document put Hernandez on notice that further efforts at informal conciliation with Sonoco to obtain accommodation or to end harassment would be futile.
The trial court rejected Hernandez’s attempt to invoke equitable estoppel because his complaint did not allege it, as is required. Moreover, Hernandez presented no evidence in opposition to Sonoco’s summary judgment motion to support the imposition of an estoppel based on his having signed the LCA.
Hernandez contends his filing of his workers’ compensation claim on February 4, 2019 should equitably toll the statute of limitations as to his harassment cause of action. He says his allegation in the claim that he suffered “ ‘psych and stress (due to harassment and pressure from management)’ ” should have “alerted Flores and Sonoco to begin investigating the facts that formed the basis of [his] harassment claims under FEHA.”
"Two problems independently defeat Hernandez’s argument in this court about equitable tolling. First, he neither pleaded the elements of equitable tolling nor alleged he’d filed a worker’s compensation claim on February 4, 2019. Second, Hernandez did not timely raise the issue of equitable tolling in the trial court." - CWCI New Hire Notices Are Updated for 2025on March 24, 2025 at 3:00 PM
The California Workers’ Compensation Institute (CWCI) has received state approval of an update to its “Facts About Workers’ Compensation” new hire notice which claims organizations and employers use to meet the statutory requirements to provide new employees with basic information about workers’ compensation (Labor Code §3551).
CWCI revised its new hire notice after Gov. Newsom signed AB 1870 last year. That bill amended Labor Code §3550 to require the addition of information on an employee’s right to consult an attorney to the workers’ compensation posting notice (DWC 7 form) that employers must display at their worksites. The change to the posting notice led to a similar revision to CWCI’s new hire notice because under state law (Labor Code §3551) new employees must receive written notice of the information in Labor Code §3550.
Workers’ compensation notice requirements [Labor Code §3550(f) and §3551(c)] also specify that insurers shall provide the posting notices and new hire notices to their policyholders with advice concerning the statutory notice requirements and penalties for failure to provide the notices to employees. These can include audit penalties, loss of employer medical control, thousands of dollars in civil penalties for each violation of the posting requirement, and a tolling of the statute of limitations for filing a claim.
Following enactment of AB 1870, the state Division of Workers’ Compensation revised the DWC 7 posting notice and made it available online.
State regulations [CCR 9883(a)] allow private enterprises to prepare and publish their own versions of the Written Notice to New Employees if it is approved by the Division, so CWCI revised and submitted an updated copy of its Facts About Workers’ Compensation for review and approval. The state approved the revised version last month, after which the Institute copyrighted its notice, translated it into Spanish, typeset the revised versions, and had them printed.
The updated Facts About Workers’ Compensation Notice to New Employees in English and Spanish is now in stock and available for purchase along with the 5-part DWC-1 Claim Form and Notice of Potential Eligibility, which did not need to be updated, and CWCI’s Facts For Injured Workers pamphlet, which is not mandatory, but is often used early in the life of a claim to remind injured workers of their rights and obligations.
All of these publications are available in sets of 100 through the Institute’s online store. CWCI members are eligible for a 15 percent discount on these products if the subtotal on their order is $1,000 or more. For questions about ordering, call CWCI at (510) 251-9470. - Annual Report: Santa Monica Workers’ Comp Claims Surgeon March 20, 2025 at 3:35 PM
According to an annual report released Tuesday and a review of that report by the Santa Monica Daily Press, Santa Monica’s workers' compensation program saw a significant 29.5% increase in total liabilities during the 2023-24 fiscal year, largely driven by three catastrophic claims that accounted for $7.9 million of the $8.2 million total increase.
According to City Finance Director Oscar Santiago, total program liabilities reached $36 million by June 30, up from $27.8 million in the previous fiscal year. Despite this sharp increase, the city's self-insured retention program liabilities showed stability, decreasing slightly by 0.4% to $24.3 million - their lowest level in a decade.
However the SMDP review said that the report does not go into detail regarding the catastrophic claims but it does say one originated from the police department and two came out of the fire department. These departments have historically represented the highest risk categories for workplace injuries among city employees according to the report.
Program expenses also increased dramatically, jumping 29.2% from $13 million to $16.8 million. Medical payments experienced the most significant growth, increasing by 71% year-over-year. This surge was largely attributed to dramatic increases in hospital fees, which rose 264%, and nursing/home care payments, which skyrocketed 652%.
"These increases were primarily due to catastrophic claims requiring extensive medical care," Santiago noted in the report. "In contrast, routine medical costs, measured by doctor's fees, remained relatively stable with a 4% increase year-over-year."
The report also highlighted a concerning reversal in claim frequency trends. Following a post-pandemic decline that reached a ten-year low of 245 claims in FY 2022-23, new claims jumped 20% to 294 in FY 2023-24. The Police Department was identified as the primary driver of this increase, with its employees filing 96 claims — a 35% increase from the previous year.
The severity of claims has also worsened. Claims involving lost time and/or litigation increased from 55% to 66% of total claims, representing 195 claims in FY 2023-24 compared to 135 in the previous year.
Despite these challenges, the city reported some success in claim management. While the open claim inventory grew to 592 claims, this 6.9% increase was significantly smaller than the 20.2% rise in claim frequency, demonstrating what officials called "efficient inventory control."
According to the report, the average claim cost for program participants was $35,458, compared to $101,631 for litigated claimants — a reduction of $66,173 per claim. The total program impact was estimated at up to $37.9 million in savings.
The city's Return-to-Work Program also demonstrated success, placing 67 injured workers in temporary light duty assignments during FY 2023-24. This allowed the city to recoup 4,399 lost days and save an estimated $925,000 in temporary disability costs.
A pilot program using a third-party administrator (TPA) for the Department of Transportation's workers' compensation claims has yielded positive results. Total liabilities for DoT claims declined from $7.4 million to $3.9 million by July 30, 2024, while total expenses decreased by $975,106 from FY 2016-17 levels.
Given these successes, city officials are evaluating the potential expansion of the TPA model to additional departments, focusing on non-public safety departments. The forthcoming Request for Proposal for Workers' Compensation Claims Administration Services will include an option for TPA to manage claims for all departments except Police and Fire. - Cal/OSHA Cites Contractor $157.5K for Open Trench Deathon March 20, 2025 at 3:34 PM
W.A. Rasic Construction is a general contractor specializing in infrastructure projects across the Western United States. Their headquarters is located at 4150 Long Beach Boulevard, Long Beach, CA 90807. The company has been in operation since 1978 and is known for its diverse expertise in utility construction.
The California Division of Occupational Safety and Health (Cal/OSHA) has issued $157,500 in citations to W. A. Rasic Construction for multiple violations of workplace safety regulations following a fatal trench collapse. The incident resulted in the tragic death of an employee working in an unprotected excavation.
On August 28, 2024 Joel Olea Gomez and another worker were in the trench in the Scripps Ranch community in San Diego when a cave-in occurred at about 4 a.m. The men were working on a city water project.The collapse caused a concrete pipe to be displaced.
One of the workers escaped the trench, but 27-year-old Joel Olea Gomez became trapped at the bottom under dirt and a 4-foot-diameter reinforced concrete pipe. He was pronounced dead on the scene by San Diego Fire-Rescue personnel. His body was recovered at about 9 a.m. after an extensive operation. This is the third trench death in California since 2023.
Cal/OSHA’s investigation identified serious violations of workplace safety regulations related to excavation and trench safety.
Violations Identified by Cal/OSHA:
- - Failure to implement an effective injury and illness prevention program: W. A. Rasic Construction did not implement an effective injury and illness prevention program to identify, evaluate, and correct workplace hazards, and provide training, a requirement that has been in place for more than 30 years. This failure exposed employees to the hazards associated with working in an unshored trench.
- - Failure to conduct a proper inspection of the excavation site: The employer’s inspection failed to identify conditions that could lead to dangerous cave-in hazards or the lack of necessary protective systems, such as trench boxes or shoring, which could have prevented the collapse.
- - Failure to Provide Adequate Cave-In Protection: The employer did not provide the necessary cave-in protection for employees working in an excavation approximately 17 feet deep. This critical safety failure exposed workers to the risk of fatal injury, as evidenced by the incident. Employers have the right to appeal any Cal/OSHA citation and notification of penalty by filing an appeal with the Occupational Safety and Health Appeals Board within 15 working days from the receipt of notification.
Cal/OSHA Chief Debra Lee said: “No worker should lose their life due to preventable safety failures. We will continue to enforce trench safety regulations, hold employers accountable and work to ensure that safety standards are upheld to protect workers.”
Cal/OSHA helps protect workers from health and safety hazards on the job in almost every workplace in California. Employers and workers who have questions or need assistance with workplace health and safety programs can call Cal/OSHA’s Consultation Services Branch at 800-963-9424.