Case Updates

In Magic Carpet Ride LLC v. Rugger Investment Group, L.L.C. (Oct. 25, 2019),a California Court of Appeal addressed the question whether untimely performance under a contract containing a time-is-of-the-essence clause always constitutes a material breach. Although this case involves the purchase and sale of an airplane, the principles discussed in the opinion could apply to an asset or stock purchase agreement. Read more

Dr. Sundar Natarajan, a hospitalist at St. Joseph’s Medical Center of Stockton (a Dignity facility), had difficulty completing timely medical records. When the problems persisted despite a warning by the medical executive committee, a committee was assigned to investigate. The investigatory committee confirmed Dr. Natarajan’s record keeping problems, identified additional problems regarding untimely responses while on call and the length of patients’ stays, and recommended that that the medical executive committee revoke Dr. Natarajan’s medical staff privileges. The executive committee adopted that recommendation and Dr. Natarajan appealed to the hospital’s peer review committee. Read more

Issue class could be certified to address hospital’s billing of uninsured patients at chargemaster rates.

Following an automobile accident, plaintiff Tony Sarun received emergency care at Northridge Hospital Medical Center. Sarun, who had no health insurance, signed an agreement requiring him to pay the hospital’s “full charges, unless other discounts apply.” “Full charges” were defined as “the Hospital’s published rates (called the chargemaster), prior to any discounts or reductions.” After receiving an invoice reflecting chargemaster rates and an “uninsured discount,” Sarun filed a putative class action alleging unfair or deceptive business practices under the UCL and violations of the Consumers Legal Remedies Act. Read more

A resident at ResCare, a long-term health care facility, developed a history of maladaptive and self-injurious behavior. However, his physicians did not classify him as a suicide risk and did not order any special measures beyond medication. Although ResCare had nursing care and behavior plans in place and monitored the resident frequently, he choked to death on a small towel left within his reach. The Department of Public Health cited ResCare for violating two regulations (Cal. Code Regs., tit. 22, §§ 76918, subd. (a), 76875, subd. (a)(2)) by failing to ensure that the resident was free from neglect and protected from injuring himself. ResCare sued the Department to challenge the citation. Read more

Dr. Novarro Stafford is a retired anesthesiologist whose clinical privileges were terminated by the medical staff at USC Medical Center prior to his retirement. While Dr. Stafford worked at the Medical Center, a female patient had complained that Dr. Stafford had acted inappropriately during an examination. The medical staff summarily suspended Dr. Stafford’s privileges and referred him for a neurocognitive evaluation. The medical staff then terminated Dr. Stafford’s privileges after he failed to timely submit to the evaluation. Dr. Stafford appealed and requested an administrative hearing. A hearing officer (James Lahana) was appointed. Read more

Dr. Emil Soorani, a psychiatrist, was investigated by the Medical Board after it received information he was overprescribing controlled substances. The Board obtained a Controlled Substance Utilization Review and Evaluation System (CURES) report detailing his prescribing history. The Board’s medical consultant identified six patients who were prescribed controlled substances in large quantities or with “erratic patterns.” Read more

States participating in the federal Medicaid program must pay federally qualified heath centers for the services they provide to Medicaid beneficiaries. California participates through Medi-Cal. Under Medicaid, California must pay such health centers 100 percent of their costs of furnishing required services. Tulare Pediatric Health Care Center (the Clinic) is a federally qualified health center. Read more

In Frazier v. First Advantage Background Services Corp., No. 3:17cv30, 2019 WL 4601616 (E. D. Va. Sep. 23, 2019), the Eastern District of Virginia issued an erudite opinion offering guidance on when the Supreme Court’s Spokeo decision might apply to the challenge of a Fair Credit Reporting Act (“FCRA”) claim. Read more

The Board of Pharmacy filed an accusation against Solomon Oduyale, a licensed pharmacist, to revoke or suspend his license. The accusation was based on 16 causes for discipline ranging from possession of controlled substances without proper labeling to failure to maintain accurate and complete pharmacy records. After a hearing, the Board adopted an ALJ’s decision proposing revocation of Oduyale’s license and a stay of the revocation with probation for three years. Read more

On November 13, 2019, another lawsuit was brought in California (in this case in the United States District Court in the Eastern District) challenging California’s gender quota law for boards of directors (SB 826). This lawsuit seeks (i) a declaratory judgment that SB 826 violates the Equal Protection Clause of the 14th amendment to the U.S. Constitution, and (ii) a permanent injunction to halt California’s Secretary of State (Alex Padilla) from enforcing or taking further action to enforce the law. SB 826 is a California law that went into effect on January 1, 2019 requiring publicly-held corporations--those with outstanding shares listed on a major United States stock exchange--that are incorporated in California or that have their principal executive offices here, to have at least one female director on their board by December 31, 2019. No later than December 31, 2021, these corporations must have at least one female director if their number of directors is four or fewer, at least two female directors if their number of directors is five, and at least three female directors if their number of directors is six or more. Read more