Court Opinion

ID: 9349348
Source: CourtListenerOpinion
Date Created: 2022-12-21 20:01:52.080019+00
Date Added: 2024-06-11T16:46:37.205511
License: Public Domain

Filed 12/21/22 P. v. Encino Hospital Medical Center CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                      SECOND APPELLATE DISTRICT
                                    DIVISION ONE

THE STATE OF CALIFORNIA ex                                      B302426, B303196
rel. MARY LYNN RAPIER,
                                                                (Los Angeles County
        Plaintiffs and Appellants,                              Super. Ct. No. BC641254)
        v.
ENCINO HOSPITAL MEDICAL
CENTER et al.,
        Defendants and Respondents.

      APPEALS from a judgment and post-judgment order of the
Superior Court of Los Angeles County, William Fahey, Judge.
Affirmed.
      California Department of Insurance, Nicholas G. Campins,
Senior False Claims Trial Attorney, J. Scott McNamara,
Assistant Chief Counsel, and Sara Kim Danielson, False Claims
Trial Attorney for Plaintiff and Appellant State of California.
      Waters Kraus & Paul, Gary M. Paul, Michael L. Armitage,
Charles S. Siegel, Kay Gunderson Reeves; Bartlett Barrow, Brian
P. Barrow and Jennifer L. Bartlett for Plaintiff and Appellant
Mary Lynn Rapier.
      Knox Ricksen, Thomas E. Fraysse and Taylor T. Steele for
Anti-Fraud Alliance as Amicus Curiae on behalf of Plaintiffs and
Appellants.
      Katten Muchin Rosenman, Ryan M. Fawaz and
Christopher B. Maciel for The Coalition Against Insurance Fraud
as Amicus Curiae on behalf of Plaintiffs and Appellants.
      Taxpayers Against Fraud Education Fund, Jacklyn DeMar;
Goldberg Kohn, Roger A. Lewis, W. Kyle Walther; Rukin Hyland
& Riggin, Valerie Brender for Taxpayers Against Fraud
Education Fund as Amicus Curiae on behalf of Plaintiffs and
Appellants.
      King & Spalding, Peter A. Strotz, Paul R. Johnson, James
W. Boswell and Michael E. Paulhus for Defendants and
Respondents.
                        _______________

      This proceeding arises out of a qui tam action against
Prime Healthcare Services—Encino Hospital, LLC (Encino
Hospital) and others to impose civil penalties for violation of the
Insurance Fraud Prevention Act (IFPA), Insurance Code section
1871 et seq. The State of California and relator Mary Lynn
Rapier appeal from a judgment entered after a bench trial in
which the court found insufficient evidence supported their
allegations that defendants engaged in insurance fraud by billing
insurers for services performed in a detox center for which they
had no appropriate license, and by employing a referral agency to
steer patients to the center. We affirm the judgment.

                                 2
                         BACKGROUND
      Encino Hospital was licensed by the Department of Public
Health (sometimes CDPH) as a general acute care hospital
(sometimes GACH).
      SRCC Associates, LLC was formed to operate a long-term
detox facility.
      Through a management services agreement, Encino
Hospital engaged SRCC Associates to manage and operate
Serenity Recovery Center (Serenity) at the hospital, under the
hospital’s direction and control, to provide acute (i.e., short-term)
drug and alcohol detoxification services. Serenity operated at
Encino Hospital from November 3, 2015, to January 31, 2019.
The program provided no long-term or outpatient services.

A.    Complaint
      On November 18, 2016, Mary Lynn Rapier filed this qui
tam action1 on behalf of the People of the State of California,
alleging employment-related claims and various violations of the
Insurance Code against 10 defendants. Rapier filed the
complaint in the name of the State of California, under seal, as
required by statute (Ins. Code, § 1871.7, subd. (e)), but the
superior court unsealed it on February 5, 2018, when the
California Department of Insurance (CDI) elected to intervene.

      1 “ ‘Qui tam is short for the Latin phrase qui tam pro
domino rege quam pro se ipso in hac parte sequitur, which means
“who pursues this action on our Lord the King’s behalf as well as
his own.” ’ ” (San Francisco Unified School Dist. ex rel. Contreras
v. Laidlaw Transit, Inc. (2010) 182 Cal.App.4th 438, 442, fn. 2;
Vermont Agency of Natural Resources v. U.S. ex rel. Stevens
(2000) 529 U.S. 765, 768, fn. 1.)

                                  3
(We will refer to the CDI and the State of California
interchangeably.) From that point forward, CDI had “the
primary responsibility for prosecuting the action.” (Ins. Code,
§ 1871.7, subd. (f)(l).)2
       On May 2, 2018, the CDI filed a first amended complaint
alleging employment and insurance fraud claims against 17
defendants. The trial court ordered arbitration as to the
employment claims but stayed arbitration pending the outcome
at trial of the insurance fraud claims.
       On November 9, 2018, CDI filed the operative second
amended complaint, which was eventually pared down to allege a
cause of action for “illegal patient steering,” in violation of
subdivision (a) of section 1871.7, and a cause of action for
“submission of false claims” in violation of subdivision (b) of that
section. CDI alleged the causes of action against six defendants:
Encino Hospital, Prime Healthcare Services, Inc., and Prime
Healthcare Foundation, Inc. (collectively Prime); and SRCC
Associates, its principal, Jonathan Lasko, and JNL Management,
LLC (collectively SRCC).
       Of note in this paring down process, the trial court ruled
that no triable issue of material fact existed as to whether Encino
Hospital was properly licensed by the California Department of
Public Health as a general acute care hospital.
       The CDI alleged that although Encino Hospital was
properly licensed as a general acute care hospital, it could not
legally operate a medical detoxification facility because it had no
separate license as a chemical dependency recovery hospital
(sometimes CDRH). The CDI alleged that in billing for detox

      2Undesignated Statutory references will be to the
Insurance Code.

                                 4
services for which they had no proper license, defendants
knowingly submitted at least 1,858 fraudulent insurance claims,
requiring an award of damages of at least $57,678,436 before
trebling.
      CDI further alleged that Serenity employed a referring
party to funnel patients to its program in exchange for Serenity
discharging acute-care patients to chronic-care facilities affiliated
with the referring party.
      The parties engaged in some law and motion proceedings
which we will describe in the discussion portion of this opinion as
they become pertinent.
B.    Trial
      A bench trial commenced on June 19, 2019, at which CDI
presented the testimony of multiple witnesses and introduced
about 50 exhibits.
      Jonathan Lasko, SRCC Associates’ principal, testified that
in 2014 he became involved in the medical detoxification business
in Florida. He came to California in 2015, formed SRCC
Associates, and entered into a management services agreement
with Encino Hospital. Lasko testified the management services
agreement was a lengthy and detailed contract that “went back
and forth” between the lawyers. Lasko deferred to his lawyers
regarding all licensing issues.
      Lasko testified that SRCC Associates set up Serenity’s
detox program on the third floor of Encino Hospital, and began
operations in November 2015. The hospital made 28 beds
available for the program. In 2016, Lasko hired Rapier as the
director of Serenity’s clinical services.
      Serenity obtained patients through an in-house marketing
program and through referrals from such entities as Aid in

                                  5
Recovery, LLC (AIR), a call center. There was no written
agreement between Serenity and AIR, and Serenity did not pay
for referrals.
       Serenity’s patients, who were admitted only with a doctor’s
approval, were provided 24-hour inpatient care, usually staying
for three to seven days. Serenity was not a lock-down facility; its
patients could leave at any time. Most patients preplanned their
transfer to a long-term residential treatment facility after their
stay at Serenity. Lasko testified that a predetermined discharge
plan was sometimes necessary because patients undergoing acute
detoxification were unable to make sensible long-term decisions.
       The patients’ medical expenses were covered by insurance
companies or other providers, whom Encino Hospital billed.
       Lasko testified that based on the advice of his attorneys,
Serenity did not need its own license to operate a detox program
at Encino Hospital. He never heard anything different from CDI
or the Department of Public Health. Serenity closed its program
in early 2019. He also testified that it was “very” common in the
industry for detox patients to arrive with a predetermined
discharge location.
       Roland Santos, the Chief Nursing Officer for Sherman
Oaks Hospital, testified as a hospital licensing expert. He stated
that Encino Hospital is licensed by the Department of Public
Health as a general acute care hospital, and Serenity could
operate under the hospital’s license. Santos testified this was
confirmed by Eric Stone, a program manager for the Department
of Public Health, who informed Santos that medical
detoxification was an inpatient service that could be provided in a
hospital’s general acute care beds.

                                 6
       Dr. Robert Waldman, a physician specializing in addiction
medicine, agreed with Lasko’s testimony that the proper
treatment plan for addicts was to start with a short-term detox
program followed by transfer to a long-term residential program,
usually for 30 to 60 days, followed by even longer outpatient
treatment. However, Waldman opined that a patient should not
start a detox program with a preplanned discharge scenario, nor
obtain a discharge plan from any referral service, but should
choose a long-term residential plan with the help of the acute
care center’s “interdisciplinary team.” However, Waldman
admitted that there was no agreed upon standard as to when a
long-term referral plan should be made, that “there would be
differing opinions among doctors” as to when discharge planning
should begin, and that patients in detox ‘‘may not be willing to be
steered” as to a proper discharge plan.
       Em Garcia, the Chief Nursing Officer and Administrator
for Encino Hospital, testified that the hospital had provided detox
services before its relationship with Serenity, and did so after
Serenity left. He did not believe that Serenity needed its own
separate license, and in fact Encino Hospital had management
agreements with other unlicensed groups which provided licensed
professional services in the hospital, including for emergency
treatment, rehabilitation services, anesthesiology, and
occupational therapy.
       Garcia testified that in late 2016, after the Serenity
program had been operating for about nine or ten months, a
surveyor from the Joint Commission, a private national
accreditation agency which sets standards for the industry,
questioned the adequacy of SRCC’s and Encino Hospital’s

                                7
licensing. In response, Garcia represented to the surveyor that
no additional licensing was required.
       In 2017, Encino Hospital was involved in a survey by the
Department of Public Health, which raised no complaints about
Serenity’s licensing status.
       Garcia testified he worked with Rapier on policies and
procedures after she was hired by Serenity, and neither she nor
any other Serenity employee expressed a concern about
Serenity’s license status, patient referrals, or the patient
discharge process.
       Garcia never received any complaint from CDI or the
Department of Public Health about Serenity’s license status, and
in fact the department continued to renew Encino Hospital’s
license even after the allegations in this lawsuit were made
public. Garcia had no knowledge of AIR until this case was filed.
       Eric Stone, a licensing expert, testified that he retired from
the Department of Public Health in 2017. His job had been to
enforce both state and federal laws and regulations, including
those involving licensing, and over the years he had many
conversations with the Encino Hospital management team,
including Santos. Stone claimed not to remember the
conversation with Santos in which, Santos testified ante, he
stated that medical detoxification was an inpatient service that
could be provided in a hospital’s general acute care beds. The
trial court found Stone’s demeanor was evasive, and his claim of
no memory unlikely. The court speculated Stone was taking a
different position than he had while still employed by
Department of Public Health because the CDI had changed its
position.

                                  8
      Rapier testified that she applied for a job with Serenity and
was granted what she described as a three-month interview
process, during which she worked at Serenity to learn about its
operation. She was eventually offered the job, and started part
time in March 2016 and full time on April 1, but took a medical
leave of absence at the end of June and was terminated by Lasko
in August 2016. Rapier admitted that prior and subsequent to
her brief employment at Serenity she had no experience in an
acute detox facility in a hospital setting.
      Rapier did not claim to have reported licensing or steering
issues to anyone before she was terminated, and failed to produce
a memorandum of “policies and procedures” that she claimed to
have written but Serenity ignored.
      The court found that Rapier’s testimony on key issues was
not very credible, and “overall, Rapier did nothing to advance
CDI’s case.”
      Evelyn Kim, a consultant on medical practices who also
investigates fraud claims, testified she was first approached by
Rapier for purposes of this litigation, and was hired by Rapier’s
attorneys to opine on a standard form used to bill insurance
companies. Kim opined that if Encino Hospital used the form,
SRCC would have to be listed as a healthcare provider, and its
National Provider Identifier number furnished. However, the
court found Kim’s testimony was rambling and difficult to
understand, conveying the “distinct impression” that she was
unfamiliar with the standard form, and “was making up her
answers.” Kim gave no testimony as to what disclosures from a
detox service insurance companies considered to be material.
       Kim admitted she had never worked in a hospital nor been
involved in hospital billings, had no experience with or

                                 9
background in California insurance regulations, reviewed none of
the claim forms submitted to insurers by Encino Hospital, and
had no opinion as to whether the hospital’s claim forms were
accurate or whether Encino Hospital or SRCC intended to
defraud any insurance provider. Kim admitted that she wrongly
assumed Serenity was a long-term residential drug and alcohol
treatment program.
      The court found that no evidence supported Kim’s opinion
that SRCC had to be specified as a healthcare provider on a claim
form, and in any event the Serenity detox program was identified
on Encino Hospital’s claim forms. Ultimately, the court found,
Kim’s testimony was of no value in showing that Encino Hospital
made material false statements or omissions on claim forms
submitted to California insurance companies.
      Jennifer Vachet, a licensed marriage and family therapist
who previously worked for Rapier but had no prior experience in
a hospital setting or with a detox facility, testified that Rapier
hired her to work for Serenity in 2016 as a social services
manager. She worked there for seven months, resigning after
another employee lodged a complaint against her. Vachet
admitted that Serenity personnel made no medically improper
discharge decisions.
      Denise Durity, who handled Serenity’s billings, recalled
that Encino Hospital used its National Provider Identifier
number to bill for Serenity’s services, but she was not shown any
claim submitted by Encino Hospital to any insurance company.
      CDI presented excerpts from the deposition of Dr. Joshua
Diamond, Serenity’s medical director, who opined that it was a
“best practice” to begin discharge planning only at the time of
admission, not before. Dr. Diamond based this opinion on some

                                10
unidentified “information that [he] researched to prepare [a]
document from insurance companies who would recommend this
as well.” CDI introduced neither the document nor any other
evidence to corroborate Dr. Diamond’s opinion.
       Dr. Diamond testified that Serenity had daily
interdisciplinary treatment group meetings at which discharge
decisions would be discussed, but did not specify how often he
attended these meetings. He admitted he had no responsibility
for discharge decisions.
       Dr. Diamond testified that he accused Robert Canova,
Serenity’s director of operations, of “fraud” in a text message,
because Canova caused Serenity to hold patients longer than
necessary for financial reasons. The message was not introduced
into evidence, and neither Diamond nor CDI identified any
patient as to which this occurred or connected any patient in this
category to a claim made to a California insurance company.
       Dr. Diamond admitted he had no knowledge of patients’
preplanned discharge plans, and no evidence of any financial
arrangements between Serenity and the long-term care facilities
to which patients would be discharged. The court found Dr.
Diamond provided no support for CDI’s steering theory.
       Finally, CDI introduced excerpts of Canova’s deposition,
who admitted he was unaware of any insurer questioning
Serenity’s licensure, and testified that Em Garcia told him on
several occasions that the correct licensing was in place. Canova
testified that AIR was for a time Serenity’s largest referral
source, and AIR-referred patients arrived at Serenity with a
preplanned discharge strategy. Canova admitted that not all
AIR-referred patients were discharged to an AIR-affiliated

                                11
facility, and he was unaware of any payment made by Serenity
for patient referrals.
       Canova testified that on occasion, when Dr. Diamond
believed that a patient was medically cleared but the team
believed a safe discharge location was not then available, Dr.
Diamond “didn’t want to wait for the available bed for a safe
discharge location[,] so the patient [was] discharged to the
street.” Canova testified that patients usually had a
predetermined facility as part of their “continuity of care plan.”
       Defendants rested without calling any witnesses.
C.     Posttrial Proceedings
       In its closing brief, CDI argued there were 4,135 false
claims, for which “assessments” should be imposed in the amount
of $139 million plus a penalty range of $20 to $41 million against
all six defendants.
         In their closing brief, the Prime defendants argued that
CDI “vastly overreached in pursuing a case beyond its limited
jurisdiction.”
       The court found that CDI’s conclusory allegations of aiding
and abetting and conspiracy were unsupported by any evidence
suggesting liability on the part of Prime Healthcare Foundation,
Prime Healthcare Services, or JNL Management. The court
chided CDI for failing to dismiss these defendants either when it
knew it would introduce no evidence of their liability or at the
conclusion of the evidence.
       The court found that CDI’s claims, which alleged conduct
that no licensing or accrediting agency had found to be troubling,
including the CDI itself, constituted a vast overreach as to
parties, theories, and scope. The court also found that CDI failed
to fulfill its ethical obligation to be scrupulously fair, in that it

                                 12
pursued the litigation against several defendants beyond any
reasonably colorable claim. The court found it troubling that CDI
appeared to have abdicated its statutory responsibility to take
the primary role in prosecuting the action, instead ceding control
to Rapier’s attorneys.
       On the merits, the court found that CDI’s fraud theory was
unsupported by any evidence of a false statement or omission,
specific intent to defraud, materiality, or reliance. On the
contrary, the undisputed evidence was that all defendants
intended to follow the law, consulted attorneys when unsure
about what to do, and relied on a lack of information from any
agency, including CDI, that their practices were improper, even
after the allegations in this case were made public. The court
therefore concluded that CDI failed to show that defendants
intended to defraud anyone or that any alleged false statement or
omission was material, an issue on which CDI called no witness
except Kim, whom the court found to be unpersuasive.
       As to CDI’s steering theory, the court found CDI failed even
to provide a clear definition of steering, and offered no evidence
that any defendant employed anyone to steer patients to
Serenity, as there was no evidence of payments or remuneration
of any kind. Even if a monetary exchange was not required for
steering to occur, the court found that no evidence suggested
defendants exchanged any benefit with AIR for referrals. On the
contrary, the undisputed evidence showed it was common and
ethical for a detox facility to help a patient find a longer term
residential facility, and there was no agreed-upon standard to
follow in doing so.

                                13
       The court concluded that defendants were entitled to
judgment in their favor, and later denied CDI’s and the relator’s
motions for new trial.3
       CDI appealed from the final judgment and separately
appealed from the order denying its motion for a new trial. We
consolidated the appeals for purposes of briefing, oral argument,
and decision.4
                           DISCUSSION
       CDI and the relator contend the trial court erred by
interpreting the IFPA as applying only to fraudulent claims as
opposed to simply false claims, and by interpreting subdivision
(a) of section 1871.1 as requiring a cash exchange as opposed to
an exchange of any item or service of value. CDI further
contends the trial court erred in denying it a jury trial, denying a
continuance, and awarding an item of costs.
A.     Preliminary Considerations
       The Prime defendants preliminarily argue that Rapier may
assert no argument on appeal beyond the arguments raised by
CDI because CDI has a statutory obligation to lead this litigation.

      3 A relator is a real party in interest in whose name a state
or attorney general brings a lawsuit. He or she is generally the
person who furnishes information on which the lawsuit is based.
(People ex rel. Allstate Ins. Co. v. Weitzman (2003) 107
Cal.App.4th 534, 538.)
      4 On December 17, 2021, CDI’s appeal as to the SRCC
defendants was dismissed without prejudice. The order denying
CDI’s new trial motion is not itself appealable, but is reviewable
on appeal from the underlying judgment. (Walker v. Los Angeles
County Metropolitan Transportation Authority (2005) 35 Cal.4th
15, 18-19; Code Civ. Proc., § 904.1, subd. (a)(2).)

                                14
(§ 1871.7, subd. (f)(1).) We disagree. Although the CDI
maintains the primary responsibility for prosecuting this action,
Rapier enjoys the “right to continue as a party to the action.”
(§ 1871.7, subd. (f).) When independent parties join forces in
litigation, it is not uncommon for each to take a slice of the
available arguments on appeal. To hold otherwise would invite
even more duplication than is already inherent in multi-party
litigation.
       After filing their opening briefs, CDI and Rapier settled
their case against the SRCC defendants and stipulated to dismiss
their appeal as to those defendants without prejudice. The Prime
defendants argue that pursuant to the doctrine of collateral
estoppel, the settlement and dismissal are “dispositive of all
claims raised on appeal” against them, including that plaintiffs
were entitled to a jury trial, that they were entitled to a new trial
based on denial of a continuance, and that common finings on
multiple elements of plaintiffs’ causes of action were incorrect.
We disagree.
       “Collateral estoppel precludes relitigation of issues argued
and decided in prior proceedings.” (Lucido v. Superior Court
(1990) 51 Cal.3d 335, 341.) But “ ‘an appeal “is not a separate
proceeding and has no independent existence” [citation]; it is
merely the continuation of an action.’ ” (Zamos v. Stroud (2004)
32 Cal.4th 958, 969.) No authority of which we have been made
aware applies the doctrine of collateral estoppel to different
parties in the same proceeding. If finality as to one party in a
proceeding forestalled the appellate rights of another party, all
appeals would have to be all-or-nothing affairs where all losing
parties appeals or none do. That has never been the law.

                                 15
B.     Standard of Review
       “In reviewing a judgment based upon a statement of
decision following a bench trial, we review questions of law de
novo, and we review the trial court’s findings of fact for
substantial evidence.” (Durante v. County of Santa Clara (2018)
29 Cal.App.5th 839, 842.) “ ‘Under this deferential standard of
review, findings of fact are liberally construed to support the
judgment and we consider the evidence in the light most
favorable to the prevailing party, drawing all reasonable
inferences in support of the findings.’ ” (RSCR Inland, Inc. v.
State Dept. of Public Health (2019) 42 Cal.App.5th 122, 131.)
C.     Violation of the IFPA
       1.    History and purpose of the IFPA
       The IFPA, originally enacted in 1993, consists of eight
articles concerning insurance fraud.5 Article 1 (titled False and
Fraudulent Claims) comprises sections 1871 through 1871.9.6
Section 1871 sets forth legislative findings and states the
Legislature’s intention is to “permit the full utilization of the
expertise of the commissioner and the department so that they
may more effectively investigate and discover insurance frauds,
halt fraudulent activities, and assist and receive assistance from
federal, state, local, and administrative law enforcement agencies

      5 Statutes 1993, chapter 120, section 3.3 (Assem. Bill No.
1300), effective July 16, 1993.
      6 The IFPA is Chapter 12 of Part 2 (The Business of
Insurance) of Division 1 (General Rules Governing Insurance) of
the Insurance Code, sections 1871-1879.8. Articles 2 through 8 of
the IFPA govern various aspects of the administration of
insurance claims and the investigation, reporting, and prevention
of insurance fraud.

                                16
in the prosecution of persons who are parties in insurance
frauds.” (§ 1871, subd. (a).)
       Subdivision (h) of section 1871 explains that “[h]ealth
insurance fraud is a particular problem for health insurance
policyholders. Although there are no precise figures, it is
believed that fraudulent activities account for billions of dollars
annually in added health care costs nationally. Health care fraud
causes losses in premium dollars and increases health care costs
unnecessarily.”7
       When section 1871.7 was originally enacted it prescribed
civil penalties for the employment of runners, cappers, steerers or
other persons to procure clients or patients or obtain workers’
compensation benefits, without regard to the nature of any
insurance claim submitted for payment. (Former § 1871.7, subd.
(a), Stats. 1993, ch. 120 (Assem. Bill No. 1300 (July 16, 1993).)
Section 1871.7 was amended in 1994, adding conduct done with
an intention to engage in activities prohibited by Penal Code
sections 549, 550, and 551 (which criminalize the making of false
or fraudulent claims to insurers), and to provide civil penalties
for that conduct. (Former § 1871.7, amended Stats. 1994, ch.
1247, § 1 (Assem. Bill No. 1926).)
       Section 1871.7 was amended in several respects in 1995.
 Notably, the amendment made it unlawful to use runners,
cappers, steerers or others not just to obtain workers’

      7 Subdivisions (b) through (g) of section 1871 deal with
issues of fraud in automobile and workers’ compensation
insurance. Section 1871.7 originally dealt only with workers’
compensation claims, until its scope was expanded by
amendment in 1994 to apply also to “ ‘crimes involving
fraudulent claims against insurers.’ ” (People ex rel. Allstate Ins.
Co. v. Weitzman supra, 107 Cal.App.4th at p. 548.)

                                 17
compensation benefits, but also to procure claims to insurers.
(Former § 1871.7, amended Stats. 1995, ch. 574, § 2 (Sen. Bill No.
465).) Although the former law allowed actions arising from any
workers’ compensation claim even if the claim was not
fraudulent, according to the Senate Committee on Criminal
Procedure, section 1871.7 as amended required proof that a claim
was illegal and fraudulent. (Analysis of the Sen. Comm. on Crim.
Proc., Sen. Bill No. 465 (1995-1996 Reg. Sess.), p. 5.) The
committee went on to explain that the amended bill “would make
it unlawful and provide for disgorgement of profits whenever a
capper is used,” because, according to the bill’s sponsor (with
respect to automobile insurance claims), “fraud is almost always
present when cappers are used.” (Ibid.)
       Section 1871.7 was amended again in 1999, by adding the
last sentence to subdivision (b), which provided for the first time
that penalties are to be assessed for each fraudulent claim
presented to an insurer, instead of for each violation of
subdivision (a). (Former § 1871.7, amended Stats. 1999, ch. 885,
§ 2 (Assem. Bill No. 1050); see Amendments, Deering’s Ann. Ins.
Code (2009 ed.) foll. § 1871.7, p. 274.)
       2.    Statutory interpretation
       Our fundamental task in construing a statute is to
ascertain the intent of the Legislature and effectuate the
statute’s purpose. (Day v. City of Fontana (2001) 25 Cal.4th 268,
272.) “[S]uch a construction is, if possible, to be adopted as will
give effect to all” of the statutory language. (Code Civ. Proc.,
§ 1858.) When the language of the statute is clear and
unambiguous, the “plain meaning” rule applies; we presume the
Legislature meant what it said. (Day, at p. 272.)

                                18
D.     Application
       1.     False claims
       Subdivision (b) of section 1871.7 provides in pertinent part:
“Every person who violates any provision of this section or
Section 549, 550, or 551 of the Penal Code shall be subject . . . to
a civil penalty of not less than five thousand dollars ($5,000) nor
more than ten thousand dollars ($10,000), plus an assessment of
not more than three times the amount of each claim for
compensation . . . . The penalty prescribed in this paragraph
shall be assessed for each fraudulent claim presented to an
insurance company by a defendant . . . .” Penal Code section 550
applies to “any false or fraudulent claim for the payment of a loss
or injury, . . . under a contract of insurance” and “any false or
fraudulent claim for payment of a health care benefit.” (Pen.
Code, § 550, subd. (a)(1), (6).)
       Here, CDI alleged that Encino Hospital misrepresented to
insurers that it was properly licensed to provide detox services
when it was not. The trial court found no evidence suggesting
that defendants presented a false claim to any insurer. We
agree; no authority of which we are aware or to which we have
been directed obligates Encino Hospital to hold any license other
than its license as a general acute care hospital.
       “No person . . . shall operate . . . health facility in this state,
without first obtaining a license” from the Department of Public
Health. (Health & Saf. Code, § 1253, subd. (a).) It is undisputed
that Encino Hospital is licensed as a general acute care hospital
by the Department of Public Health.
       Relying on and selectively quoting from Health and Safety
Code sections 1250.3, subdivision (a) and 1254.2, subdivision (a),
Rapier argues that “any facility providing ‘24-hour inpatient care

                                    19
for persons who have a dependency on alcohol or other drugs, or
both alcohol and other drugs’ must be licensed as a ‘chemical
dependency recovery hospital.’ ” Neither of these statutes so
provides, either separately or in combination.
       Health and Safety Code section 1250.3, subdivision (a),
provides: “As defined in Section 1250, ‘health facility’ includes
the following type: ‘Chemical dependency recovery hospital’
means a health facility that provides 24-hour inpatient care for
persons who have a dependency on alcohol or other drugs, or both
alcohol and other drugs. This care shall include, but not be
limited to, the following basic services: patient counseling, group
therapy, physical conditioning, family therapy, outpatient
services, and dietetic services. Each facility shall have a medical
director who is a physician and surgeon licensed to practice in
this state.” Health and Safety Code section 1254.2 simply
provides that the Department of Public Health “shall license
chemical dependency recovery hospitals to provide the basic
services specified in subdivision (a) of Section 1250.3.”
       Neither statute provides that a general acute care hospital
such as Encino Hospital becomes a chemical dependency recovery
hospital simply because it offers the same services a chemical
dependency recovery hospital would offer.
       On the contrary, a general acute care hospital may provide
chemical dependency recovery services “as a supplemental
service.” (Health & Saf. Code, § 1250.3, subd. (d)(1).) When it
does so, “the general acute care hospital . . . shall provide the
supplemental services in a distinct part of the hospital or
freestanding facility, if the distinct part satisfies the criteria

                                20
established by law and regulation for approval as a chemical
dependency recovery supplemental service.” (Ibid.)8
       Nothing about this scheme obligates a general acute care
hospital to obtain some different license.
       Rapier acknowledges that a general acute care hospital
may provide acute detox services without an entirely new license
but, she argues, selectively quoting from subdivision (d) of Health
and Safety Code section 1250.3, such a hospital may do so only
“so long as they obtain CDPH’s ‘approval’ to provide such
services.”
       The statue does not say that. Health and Safety Code
section 1250.3, subdivision (d) provides that a general acute care
hospital may provide acute detox services “in a distinct part of
the hospital or freestanding facility, if the distinct part satisfies
the criteria established by law and regulation for approval as a
chemical dependency recovery supplemental service.” (Italics
added.) The statute says only that the distinct part of the
hospital must satisfy the criteria for approval as a chemical

      8  Subdivision (d) of Health and Safety Code section 1250.3
provides in pertinent part: “Chemical dependency recovery
services may be provided as a supplemental service in existing
general acute care beds and acute psychiatric beds in a general
acute care hospital or in existing acute psychiatric beds in an
acute psychiatric hospital or in existing beds in a freestanding
facility, as defined in subdivision (c). When providing chemical
dependency recovery services as a supplemental service, the
general acute care hospital, acute psychiatric hospital, or
freestanding facility, as defined in subdivision (c), shall provide
the supplemental services in a distinct part of the hospital or
freestanding facility, if the distinct part satisfies the criteria
established by law and regulation for approval as a chemical
dependency recovery supplemental service.”

                                 21
dependency recovery supplemental service, not that the hospital
must actually obtain a separate CDPH approval.
       Department of Public Health regulations generally require
approval for provision of supplemental services: “Any licensee
desiring to establish or conduct . . a supplemental service, shall
obtain prior approval from the Department . . . .” (Cal. Code
Regs., tit. 22, § 70301, subd. (a).) The regulations then list 28
supplemental services for which approval is required. (Id. at
§§ 70401-70657 [e.g., acute respiratory care, burn center, dental
service, intensive care newborn, pediatric service, perinatal
service, radiation therapy, social service, speech pathology,
standby emergency medical service, etc.].) “Chemical dependency
recovery services” are not among the long list of supplemental
services for which a general acute care hospital requires
Department of Public Health approval.
       Rapier also argues that Encino Hospital was obligated but
failed to identify Serenity as a provider on its insurance claims, a
theory beyond CDI’s statement at trial about contested issues. In
any event, the trial court rejected the theory because no evidence
supported it. The only exhibit containing actual claim forms,
Exhibit 1111, showed that Serenity was disclosed to insurers.
CDI instead relied at trial on Exhibit 1061, listing 4,484 claims,
but the court found that this exhibit was prepared for litigation,
and did not correlate to actual claim forms.
       Because Encino Hospital needed no separate license or
approval, and no evidence showed it concealed any provider, the
CDI’s cause of action for false claims fails for lack of a predicate.
We therefore need not decide whether the IFPA requires a
showing of scienter or materiality.

                                 22
       2.    Steering
       CDI’s steering theory was that AIR sometimes referred an
addiction recovery patient to Serenity in exchange for Serenity’s
promise not to interfere with the patient’s preadmission plan to
be discharged to an AIR-affiliated treatment center for follow-on
care. In other words, CDI alleged, Serenity permitted patients to
be referred to follow-on care facilities based on profit, not the
patients’ best interests. CDI argues the trial court misconstrued
the law applicable to this claim, and in doing so erred by finding
the evidence weighed against it. We disagree.
       Subdivision (a) of section 1871.7 provides: “It is unlawful
to knowingly employ . . . steerers . . . to procure . . . patients to . . .
obtain services or benefits . . . that will be the basis for a claim
against an . . . insurer.”
       “A steerer has been held to be one who gains the confidence
of the person intended to be fleeced [citation] and who may be
said to steer or lead the victim to the place where the latter is to
be robbed or swindled.” (Barron v. Board of Dental Examiners of
Cal. (1930) 109 Cal.App. 382, 385.)
       Here, the trial court found that any evidence suggesting
that Serenity employed AIR to procure patients was outweighed
by evidence that no such employment existed.
       To begin, no evidence indicated that Serenity or Encino
Hospital either received compensation for referring patients to
residential treatment centers or paid for referrals to the Serenity
program.
       Under the most liberal construction of CDI’s theory, under
which a cash exchange is not required, Serenity “employed” AIR
by expressly or tacitly agreeing, in exchange for referrals, to
honor a patient’s preplanned treatment regimen, which

                                    23
benefitted AIR because the plan included later referral to an AIR-
affiliated facility.
        But no evidence indicated that such an agreement existed.
CDI attempted to establish an inference for such an agreement by
establishing that it was “universally accepted” that an acute
detox facility should refuse to honor a patient’s preplanned
treatment regimen. Serenity would fail to follow this universal
standard, CDI theorized, only if motivated to do so by a prior
agreement with AIR to obtain referrals.
        Little to no evidence supported the theory. Dr. Waldman,
CDI’s expert on the standards for referring acute detox patients
to long-term facilities, stated only that preselecting a long-term
facility in advance of detox would violate the best practices
standard, not any universally accepted standard. He testified he
was unaware of any professional standard specifying when
discharge locations should be established for substance use
disorder patients, and agreed that reasonable medical
professionals could disagree about the timing of discharge
planning. Lasko testified that it was “very” common for a patient
to arrive at a detox facility with a predetermined discharge
location for long-term care.
        The evidence thus afforded no reasonable basis upon which
to infer that Serenity declined to interfere with patients’
preplanned discharge locations to secure its own profits.
        Rapier argues it is irrelevant whether it was common and
ethical to exchange a patient referral for a promise to discharge
the patient to a facility owned by the referral source’s affiliate,
because “[i]f conduct is made illegal by statute, ‘everybody’s doing
it’ is not a defense.”

                                24
       This misses the point. The question is whether Serenity
“employed” AIR to obtain referrals. There being no express
agreement to that effect, nor remuneration exchanged, CDI infers
the employment from the fact that Serenity’s discharge orders
benefitted AIR. However, that it was common and ethical to
discharge a patient to a facility affiliated with the referring party
negates Rapier’s claim that the discharge orders were evidence of
AIR’s employment.
       With the employment inference negated, little to no
evidence supported CDI’s steering theory, and substantial
evidence weighed against it. The trial court was therefore
justified in finding that CDI failed to prove its theory.
E.     Procedural Issues
       1.     Jury trial
       CDI demanded a jury trial but failed to deposit jury fees.
The trial court therefore granted Prime’s motion to strike the
demand for a jury trial, finding that jury fees were not timely
paid, and in any event CDI’s causes of action were not subject to
jury trial. CDI moved for relief under Code of Civil Procedure
section 631, which the trial court denied. CDI then petitioned for
a writ of mandate, which we denied. (State of California v.
Superior Court (B298315, June 19, 2019) pet. denied.)
       CDI argues the trial court erred in denying CDI’s right to a
jury trial. We disagree.
       A trial court’s decision whether to allow jury trial where
there has been a waiver is reviewed for abuse of discretion. (Code
Civ. Proc., § 631, subds. (f) & (g).)
       Here, Rapier failed to pay the initial jury fee until it was
four months late, and CDI never paid it. (See Code Civ. Proc.,

                                 25
§ 631, subd. (f)(5).) The trial court therefore acted within its
discretion in striking CDI’s request for a jury trial and denying
its application for relief under Code of Civil Procedure section
631.
        On the merits, CDI was not entitled to a jury trial on its
claims.
        “ ‘[T]he right to a jury trial in a civil action may be afforded
either by statute or by the California Constitution.’ ”
(Nationwide Biweekly Administration, Inc. v. Superior Court of
Alameda County (2020) 9 Cal.5th 279, 296-297 (Nationwide).)
        The IFPA affords no explicit right to a jury trial on causes
of action it creates.
        Article I, section 16 of the California Constitution states in
relevant part that “[t]rial by jury is an inviolate right and shall
be secured to all . . . .”
        “From the outset of our state’s history, our courts have
explained that this provision was intended to preserve the right to
a civil jury as it existed at common law in 1850 when the jury
trial provision was first incorporated into the California
Constitution.” (Nationwide, supra, 9 Cal.5th at p. 315.)
“Pursuant to this historical approach, as a general matter the
California Constitution affords a right to a jury trial in common
law actions at law that were triable by a jury in 1850, but not in
suits in equity that were not triable by a jury in 1850.” (Ibid.)
“ ‘ “In determining whether the action was one triable by a jury at
common law, the court is not bound by the form of the action but
rather by the nature of the rights involved and the facts of the
particular case—the gist of the action. A jury trial must be
granted where the gist of the action is legal, where the action is
in reality cognizable at law.” ’ ” (Ibid.)

                                  26
       “At early common law, actions at law typically involved
lawsuits to recover money damages for injuries caused by breach
of contract or tortious conduct. Equitable causes of action
typically sought relief such as injunctions, orders for specific
performance, or the disgorgement of ill-gotten gains, which were
unavailable in actions at law.” (LaFace v. Ralphs Grocery Co.
(2022) 75 Cal.App.5th 388, 395.)
       “The constitutional right of trial by jury is not to be
narrowly construed. It is not limited strictly to those cases in
which it existed before the adoption of the Constitution but is
extended to cases of like nature as may afterwards arise. It
embraces cases of the same class thereafter arising. . . . The
introduction of a new subject into a class renders it amenable to
its general rules, not to its exceptions.” (People v. One 1941
Chevrolet Coupe (1951) 37 Cal.2d 283, 300.)
       Courts determine whether there is a right to a jury trial
under the California Constitution by looking to the statutory
scheme as a whole to determine whether the gist of a cause of
action under the IFPA seeking both injunctive relief and civil
penalties is legal or equitable. (Nationwide, supra, 9 Cal.5th at
p. 324.) Whether a jury trial right exists under the state
constitution is an issue of law subject to de novo review. (Jogani
v. Superior Court (2008) 165 Cal.App.4th 901, 904.)
       The foremost consideration is whether the IFPA’s remedies
are equitable in nature. (DiPirro v. Bondo Corp. (2007) 153
Cal.App.4th 150, 181 [“ ‘Determining whether the gist of a claim
is in law or equity “depends in large measure upon the mode of
relief to be afforded” ’ ”].)
       The IFPA is a remedial statute intended to protect the
public from sharp insurance practices. As noted, the

                                27
Legislature’s intention in enacting it was to “permit the full
utilization of the expertise of the commissioner and the
department so that they may more effectively investigate and
discover insurance frauds, halt fraudulent activities, and assist
and receive assistance from federal, state, local, and
administrative law enforcement agencies in the prosecution of
persons who are parties in insurance frauds.” (§ 1871, subd. (a).)
       The IFPA provides for civil penalties between $5,000 and
$10,000, assessments of “not more than three times the amount
of each claim for compensation,” and “other” equitable relief,
including temporary injunctive relief. (§ 1871.7, subd. (b).) The
penalties “are intended to be remedial rather than punitive . . . .
If the court finds, after considering the goals of disgorging
unlawful profit, restitution, compensating the state for the costs
of investigation and prosecution, and alleviating the social costs
of increased insurance rates due to fraud, that such a penalty
would be punitive . . . , the court shall reduce that penalty
appropriately.” (§ 1871.7, subd. (c).)
       “[A]n injunction to prohibit ongoing or future misconduct or
an order requiring a defendant to provide specific performance or
disgorge ill-gotten gains” is equitable in nature. (Nationwide,
supra, 9 Cal.5th at p. 293.) That the IFPA’s remedies include
injunctive relief and “other” equitable relief supports finding that
a cause of action under the IFPA to be equitable in nature. (See
Lutz v. Glendale Union High School (9th Cir. 2005) 403 F.3d
1061, 1067-1068 [reference to ‘other equitable relief’ makes sense
only if the relief previously described relief is itself equitable].)
       Even an award of civil penalties under the IFPA is
determined based on equitable principles. Thus, if the court—not
a jury—finds, after considering equitable factors such as

                                 28
disgorgement, unlawful profit, restitution, costs of investigation
and prosecution, and the social costs of increased insurance rates
due to fraud, that civil penalties are punitive, it must adjust
them “appropriately,” i.e., equitably.
      Further, the IFPA has a fundamentally equitable purpose:
To investigate, discover and deter insurance frauds, not to
compensate a plaintiff for actual damages sustained. The act
makes no reference to compensatory damages; assessments are
levied in relation not to damages—there need be no damages—
but to the dollar amount of claims submitted to insurers.
      Finally, the primary right to bring an action for civil
penalties pursuant to the IFPA is given to the state rather than
individuals seeking compensation. (§ 1871.7, subd. (d)
[commissioner or district attorney may bring a civil action].)
Even though the IFPA authorizes a qui tam action to enforce its
provisions, if the commissioner elects to intervene, the CDI bears
“the primary responsibility for prosecuting the action, and shall
not be bound by an act of the person bringing the action”
(§ 1871.7, subd. (f)(l)).
      The IFPA’s remedial purpose, the primacy given to state
action, and statutory remedies, including civil penalties, that are
not damages at law but constitute equitable relief appropriate
and incidental to enforcement of the act, render a cause of action
brought pursuant to the act more in the nature of an action to
enforce public rights, not to vindicate individual injuries. As
such, the gist of such a cause of action is equitable, which does
not entitle the CDI or Rapier to a jury trial. (See DiPirro v.
Bondo, supra, 153 Cal.App.4th at p. 184.)
      A final consideration supports denial of a jury trial here.
Stepping back from equitable elements inhering in the IFPA

                                29
itself, the threshold issue with respect to plaintiffs’ false claim
cause of action—whether a hospital’s operation of a detox facility
requires separate approval or a separate license from the
CDPH—is a question purely of administrative law, one the
Legislature has relegated to the CDPH. The CDPH has at all
relevant times been aware of Encino Hospital’s activities but has
never required separate approval for its detox center. Plaintiffs
purport in this action to supplant CDPH’s health licensing
expertise. Assuming for the sake of argument this is a proper
invocation of the IFPA, a matter we need not decide today despite
the parties’ and amici’s extensive briefing on the issue,
healthcare licensing is quintessentially an administrative
endeavor. Whether a hospital’s supplemental service requires
separate CDPH approval involves the “nuanced and qualitative”
consideration of a variety of factors and circumstances identified
in CDPH’s administrative guidelines, and is “the type of decision
that has traditionally been viewed as the province of courts
rather than juries.” (Nationwide, supra, 9 Cal.5th at p. 304; see
also McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d
348, 380 [“no jury trial right exists as to adjudication of a matter
otherwise properly within the regulatory power of an
administrative agency”].)
        As with the Unfair Competition Law at issue in
Nationwide, an overarching legislative concern in enacting the
healthcare licensing scheme was doubtless to provide a
streamlined procedure for informed and uniform regulation of
California’s healthcare industry. Although we assume for the
sake of argument that the CDI may properly insert itself into this
scheme, in effect regulating the healthcare industry through a

                                30
backdoor opened by the IFPA, we find no reason to permit a jury
to do so.
       Rapier cites to three IFPA cases that were tried to juries,
but none decided the jury-trial issue. A case is no authority for
unconsidered propositions. (In re Marriage of Cornejo (1996) 13
Cal.4th 381, 388.)
       Rapier argues that the fixed minimum for an IFPA civil
penalty renders the action akin to one at law to recover a debt.
But even if this is true, the IFPA still obligated the trial court
under subdivision (c) of section 1871.7 to reduce penalties
“appropriately” pursuant to an equitable analysis. Thus, even if
a civil penalty was in the nature of a private debt, a point we do
not decide, civil penalties under the IFPA are ineluctably
equitable.
       We conclude that the essential character and purpose of the
IFPA is equitable. Therefore, CDI and Rapier had no right to a
jury trial.9
       2.    Continuance
       Two months before trial, CDI moved for a continuance on
the ground that the sheer volume of documents produced would
require more than two months of preparation. The trial court
denied the request without prejudice. CDI never renewed the
request. On the contrary, on the day of trial CDI answered ready
for trial, and when the court gave it an opportunity to address

      9 The parties and amici argue at great length about
whether the IFPA applies to preferred provider organizations
(PPOs), Employee Retirement Income Security Act (ERISA)
plans, plans regulated by the California Department of Managed
Health Care, or insurance companies from other states. Given
today’s result we need not reach those issues.

                               31
“anything else” before opening statements, CDI raised no concern
about lack of time to prepare.
        By failing to seek a continuance when it had the chance,
CDI forfeits any claim of error on appeal.
F.      Costs
        The trial court awarded the Prime defendants $20,291.11
for enlargements and photocopies of exhibits. Rapier contends
this was an inappropriate item of costs, especially so with respect
to copies not used at trial. We disagree.
        A prevailing party in civil litigation is entitled to recover
costs incurred in the litigation “[e]xcept as otherwise expressly
provided by statute.” (Code Civ. Proc., § 1032, subd. (b).) Code of
Civil Procedure section 1033.51 sets forth specific items of costs
that are allowed or prohibited. (§ 1033.5, subds. (a), (b).) The
statute also authorizes the trial court in its discretion to award or
deny an item of costs not mentioned in this section. (§ 1033.5,
subd. (c)(4); hereafter subdivision (c)(4).) All costs, whether
expressly permitted under section 1033.5, subdivision (a) or
awarded in the trial court’s discretion pursuant to subdivision
(c)(4), must be “reasonably necessary to the conduct of the
litigation rather than merely convenient or beneficial to its
preparation” (§ 1033.5, subd. (c)(2)) and “reasonable in amount”
(§ 1033.5, subd. (c)(3)).
        We review a trial court’s cost award for abuse of discretion.
(Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332.)
        The trial court awarded the Prime defendants costs
incurred in preparing photocopies of exhibits under subdivision
(a)(13) of Code of Civil Procedure section 1033.5 (hereafter
subdivision (a)(13)), which allows the recovery of costs for models,
enlargements, and photocopies of exhibits “if they were

                                 32
reasonably helpful to aid the trier of fact,” even though the
exhibits were not ultimately used at trial.
       Our Supreme Court recently held that costs related to
unused photocopies of trial exhibits and demonstratives are not
categorically recoverable under subdivision (a)(13), but may still
be awarded in the trial court’s discretion pursuant to section
subdivision (c)(4). (Segal v. ASICS America Corp. (2022) 12
Cal.5th 651, 657.) Here, the trial court exercised its discretion
under subdivision (a)(13) in determining that unused exhibits
were reasonably helpful to aid the trier of fact. Although that
award was ultimately mis-categorized, the same discretion
exercised under subdivision (a)(13) supported awarding the costs
under subdivision (c)(4).
       Rapier argues that because section 1871.7, subdivision
(g)(5) of the IFPA authorizes attorney’s fees and expenses for a
defendant in only limited circumstances, this limitation occupies
the field, and a defendant is not entitled to costs otherwise
awardable in civil actions. We disagree.
       Section 1871.7, subdivision (g)(5), provides: “If the district
attorney or commissioner does not proceed with the action, and
the person bringing the action conducts the action, the court may
award to the defendant its reasonable attorney’s fees and
expenses if . . . the court finds that the claim of the person
bringing the action was clearly frivolous, clearly vexatious, or
brought primarily for purposes of harassment.”
       Because subdivision (b) of Code of Civil Procedure section
1032 grants a prevailing party the right to recover costs “[e]xcept
as otherwise expressly provided by statute,” we must determine
whether section 1871.7, subdivision (g)(5) provides an “express”
exception. Although that section gives a prevailing defendant the

                                 33
right to recover “attorney’s fees and expenses” in a frivolous
action in which the commissioner has declined to intervene, the
statute makes no mention of costs awarded in other
circumstances. In other words, it does not expressly disallow
recovery of costs by prevailing defendants in other circumstances;
any suggestion that prevailing defendants are prohibited from
recovering their costs in other circumstances is at most implied.
Accordingly, based on the plain meaning of the words of the
statutes in question, we conclude subdivision (g)(5) of section
1871.7 does not provide an “express” exception to the general rule
permitting a prevailing defendant to recover its costs under Code
of Civil Procedure section 1032. (See Murillo v. Fleetwood
Enterprises, Inc. (1998) 17 Cal.4th 985, 991 [statute permitting
recovery of costs in some circumstances does not express disallow
costs in other circumstances].)
       Rapier argues that because the trial court ordered an
electronic exchange of exhibits, the award of costs for three
photocopied sets of exhibits—as exhibit lists changed—was an
abuse of discretion. We disagree. Even if exhibits are exchanged
electronically, a trial court could reasonably conclude that
photocopies of those exhibits will be necessary for trial. The court
could further reasonably conclude that costs of re-preparing
exhibits as exhibit lists change is reasonable considering the
practical burdens of preparing for trial as the scope of a case
changes.
G.     Requests for Judicial Notice
       Plaintiffs’ requests for judicial notice of legislative
materials are granted. (Evid. Code, § 451, subd. (a).) Rapier’s
requests for judicial notice of legislative materials are granted.

                                34
(Ibid.) The CDI’s request for judicial notice of health care
materials are granted. (Evid. Code, § 451, subds. (c) & (h).)
                        DISPOSITION
       The judgment and rulings on posttrial orders are affirmed.
The Prime defendants are to recover costs on appeal.

      NOT TO BE PUBLISHED

                                           CHANEY, J.

We concur:

             ROTHSCHILD, P. J.

             BENKE, J.*

      *Retired Associate Justice of the Court of Appeal, Fourth
Appellate District, Division One, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

                                35