Care One Mgmt. LLC v. United Healthcare Workers E.
| Citation | 43 F.4th 126 |
| Decision Date | 28 July 2022 |
| Docket Number | 19-3693 |
| Parties | CARE ONE MANAGEMENT LLC, et al., Appellants v. UNITED HEALTHCARE WORKERS EAST, et al. |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
Rosemary Alito [Argued], George P. Barbatsuly, K&L Gates, One Newark Center, 10th Floor, Newark, NJ 07102, Michael D. Critchley, Chritchley Kinum & Luria, 75 Livingston Avenue, 3rd Floor, Roseland, NJ 07068, Counsel for Plaintiffs-Appellants
A. Matthew Boxer, Lowenstein Sandler, One Lowenstein Drive, Roseland, NJ 07068, Leon Dayan [Argued], Jacob Karabell, Caitlin D. Kekacs, Joshua A. Segal, Bredhoff & Kaiser, 805 15th Street, N.W., Suite 1000, Washington, DC 20005, David M. Slutsky, Levy Ratner, 80 Eighth Avenue, 8th Floor, New York, NY 10011, Counsel for Defendants-Appellees
Before: McKEE, JORDAN, and RENDELL, Circuit Judges.
The Racketeer Influenced and Corrupt Organizations Act (RICO)1 authorizes private civil causes of action for acting as an "enterprise" and conducting a "pattern of racketeering activity" through certain criminal predicate acts.2 These predicate acts include federal crimes such as mail and wire fraud, and certain state crimes, including extortion.3 This case concerns civil RICO liability predicated on federal mail and wire fraud, as well as state law extortion through acts of sabotage and fear of economic loss. For the reasons that follow, we conclude that the District Court erred in deciding that this record could not support a finding that the Unions authorized or ratified conduct that could constitute extortion or that they wrongfully exploited threats of economic harm. We will affirm the District Court's grant of summary judgment in favor of the Unions on the remaining claims of RICO liability and remand for further proceedings consistent with this opinion.
Plaintiffs-Appellants Care One Management LLC, HealthBridge Management LLC ("HealthBridge"), the Care One Facilities,4 and the HealthBridge Facilities5 (collectively, "Care One") manage nursing homes and assisted-living facilities throughout the Northeast. Defendants-Appellees are United Healthcare Workers East SEIU 1199 ("UHWE"), New England Health Care Employees Union District 1199 ("NEHCEU"), and the Service Employees International Union ("SEIU") (collectively, "Unions"). The Unions represented several employees at various Care One facilities. This suit is the culmination of a history of conflict and animosity that has unfortunately characterized the relationship between Care One and the Unions.
In 2010 and 2011, the Unions filed charges against Care One with the National Labor Relations Board.6 They alleged that Care One had improperly terminated or threatened employees, improperly ended benefits, and wrongfully suppressed union communications at the Connecticut facilities.7 They also alleged that Care One had engaged in unfair labor practices during and after a union election in the Somerset, New Jersey facility.8 The NLRB responded with complaints and hearing notices charging Care One with interfering with rights guaranteed by the National Labor Relations Act, including the refusal to bargain collectively and in good faith.9
Beginning in January 2011, while the NLRB complaints were pending, NEHCEU and Care One attempted to negotiate a renewal of the Connecticut facilities' collective bargaining agreements.10 Those negotiations were not fruitful, and NEHCEU called a strike at those facilities. The night before the strike was to begin, the Connecticut facilities were vandalized and sabotaged.11 Patient identifying information (including patient wrist bands, door name plates, and dietary requirement documents) were mixed up.12 Medical records were altered, medical equipment was damaged or hidden, and laundry equipment was vandalized.13 At Care One's request, the Connecticut State's Attorney investigated, but the investigation yielded neither suspects nor charges.
Union documents later obtained in discovery revealed the Unions' plans to inspire workers to "become angry about their working conditions"14 and to resort to "more militant" levels of activity.15 The president of NEHCEU had also made a speech to workers in which he told them that "the law takes too long" and that NEHCEU "could be destroyed by the time the law was able to stop [Care One's] behavior."16 After the incidents, NEHCEU's Communications Director, Deborah Chernoff, wrote to fellow employees, referring to the allegations of vandalism and destruction. The communication included the statement: "Of course anyone with a peasized brain would realize this isn't a tactic we would undertake."17 When a reporter asked the NEHCEU about the vandalism and destruction at the Care One facilities, Chernoff wrote:
The allegations made by HealthBridge, if true, are very serious indeed. Should evidence be found that anyone took any action that would compromise care or put residents at risk, that person or persons should be held fully accountable, no matter who they might be.18
The record also contains several emails sent after the incident. They include an email from Chernoff, which describes a response to a FOIA request the Unions made to the Connecticut Department of Public Health as "mudd[ying] the waters and support[ing] the contention of the workers that" patients may have removed their identifying bracelets themselves rather than saboteurs.19 There is also an email from Chernoff to Chas Walker, Elected Organizer of UHWE, and others in SEIU. It was sent after the vandalism and sabotage. That email appears to respond to Walker's suggestion that the Unions launch their own investigation or actively seek to participate in the police investigation. In the email, Chernoff suggested it would be "a very bad idea" to seek to participate in the police investigation because the Unions should not "suggest [they] have information [they] don't have."20 The email also stressed the Unions' obligation to their members, "even when they are totally in the wrong."21
In addition, in 2011, with help from NEHCEU and UHWE, SEIU launched a campaign attacking Care One's labor and business practices. The campaign materials included developing websites, print and radio advertisements, as well as flyers questioning Care One's billing practices and standards of care. The campaign also publicized the NLRB complaints.22 The union advertisements Care One focuses on before us included several rhetorical questions. The first asks: "Are HealthBridge Nursing Homes Employing Enough Caregivers For Our Loved Ones?" It asserts Care One provided below-average coverage by certified nursing assistants.23 The second asks: "Is HealthBridge Giving Your Loved One Anti-Psychotic Drugs?" and asserts that Care One excessively administered medications.24 The third asks: "Overbilled at a HealthBridge Nursing Home?" and references overbilling.25 The fourth asks: "Who's in Charge at HealthBridge Nursing Homes?" and states that the facilities have an unhealthy level of turnover.26
The Unions submitted evidence to the District Court to show that this publicity campaign was subject to fact-checking and vetting procedures. But Care One alleges no such safeguards were actually in place. Despite Care One's allegations to the contrary, Amy Gladstein, UHWE's Assistant for Strategic Organizing, testified that the Unions had adopted certain protocols requiring researchers to be trained in conducting careful research. She also claimed that the advertisements were based on initial fact-gathering. According to her colleague, David Bates, the ads had to be "vetted by the research department for accuracy,"27 and many testified that the advertisements were fact-checked by trusted researchers and outside counsel.28
From July through November 2011, the UHWE also filed petitions for public hearings on applications for "determinations of need," which Care One had filed with the Massachusetts Department of Public Health. Care One had filed the applications to obtain approval for capital improvement projects at their facilities.29 The Unions' objections delayed approval of Care One's applications. At one hearing, occurring almost a year after Care One filed its application, two Union members opposed the renovations, "alleg[ing] that they had been wrongfully dismissed from their longstanding jobs because of their support for the formation of a union at the nursing home."30 The opposition was obviously unrelated to the nature of the hearing, and the regulator concluded as much.31 During a deposition, a Union official acknowledged that their opposition "was for an objective other than blocking the repairs."32
In February 2012, the Unions also asked Senator Richard Blumenthal, a U.S. senator from Connecticut, to investigate Care One's allegedly questionable billing practices. Senator Blumenthal responded by asking the Secretary of the U.S. Department of Health and Human Services to audit Care One's billing practices and to investigate and pursue any enforcement actions deemed necessary. The Unions then made sure that a copy of the Senator's letter was delivered to Care One.
The Unions' campaign also involved demonstrations, including one held in August 2012 at Care One's offices where petitions for fair collective bargaining were delivered. The Unions also staged a peaceful protest at NYU Law School where demonstrators handed out materials questioning Care One's owner and CEO Daniel Straus's purported hypocrisy for endowing the Institute for the Advanced Study of Law & Justice at NYU while allegedly violating labor law. The Unions also targeted unrelated business ventures of Straus, "block[ing] the development of a condominium project in which ... Straus had invested" and "purchasing radio advertisements in Puerto Rico to disparage two unrelated businesses ... Straus owned there."33
Care One sued the Unions for damages arising from these actions. Care One alleged they...
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