Care One Mgmt. v. United Healthcare Workers E., 19-3693

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtMCKEE, CIRCUIT JUDGE
Decision Date17 December 2021
Docket Number19-3693



No. 19-3693

United States Court of Appeals, Third Circuit

December 17, 2021

Argued: September 24, 2020

On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 2:12-cv-06371) District Judge: Honorable Susan D. Wigenton


Rosemary Alito [Argued] George P. Barbatsuly K&L Gates Donald Burke Roy T. Englert, Jr. Robbins Russell Englert Orseck Untereiner & Sauber Counsel for Plaintiff-Appellants

A. Matthew Boxer Lowenstein Sandler, Leon Dayan [Argued] Jacob Karabell Caitlin D. Kekacs Joshua A. Segal Bredhoff & Kaiser, David M. Slutsky, Levy Ratner, R. Scott Thompson, Wollmuth Maher & Deutsch Counsel for Defendants-Appellees

Before: McKEE, JORDAN, and RENDELL, Circuit Judges.




Plaintiff-Appellants Care One Management, LLC; HealthBridge Management, LLC ("HealthBridge"); the Care


One Facilities;[1] and the HealthBridge Facilities[2] (collectively, "Care One") manage nursing homes and assisted-living


facilities throughout the Northeast. Defendant-Appellees are 1199SEIU United Healthcare Workers East ("UHWE"), New


England Health Care Employees Union, District 1199 ("NEHCEU"), and two labor unions affiliated with Service Employees International Unions ("SEIU") (collectively, "Unions").

The Unions represented several employees at various Care One facilities. Care One sued the Unions for damages arising from actions that Care One alleged amounted to a pattern of racketeering in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, based upon, inter alia, its characterization of these actions as "extortionate."[3]

The District Court granted the Unions' motion for summary judgment and dismissed the complaint. The Court held that no reasonable juror could conclude that the vandalism underlying Care One's claims could be attributed to union members, much less the Unions themselves.[4] It also concluded that other actions the Unions undertook to exert pressure on Care One-including advertisements, picketing, and attempts to invoke regulatory and legislative processes-were not "extortionate." The Court further concluded that Defendants lacked the specific intent to deceive and, therefore, were entitled to summary judgment on the mail and wire fraud claims.[5] This appeal followed.

Notwithstanding the protests of our dissenting colleague-expressing extreme distaste for the Unions' tactics-the caselaw compels us to conclude that the District Court correctly decided that labor tactics, such as the Unions engaged in here, are not extortionate and accurately reasoned the remaining issues before it. Thus, for the reasons we discuss below, we will affirm.[6]


I. Factual Background

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.[7] The Unions alleged that Care One had improperly terminated or threatened employees, improperly discontinued benefits, and wrongfully suppressed union communications at the Connecticut Facilities.[8] They also alleged that Care One had engaged in unfair labor practices during and after a union election in the Somerset, New Jersey Facility.[9] The NLRB issued Complaints and Notices of Hearing charging Care One with interfering with rights guaranteed by the National Labor Relations Act, including refusal to bargain collectively and in good faith.[10]

Beginning in January 2011, while the NLRB complaints were pending, NEHCEU and Care One unsuccessfully attempted to negotiate a renewal of the Connecticut Facilities' collective bargaining agreements.[11] Thereafter, in June 2012, NEHCEU called a strike at those facilities to begin on July 3, 2012.[12] On the night before the strike was to begin, the Connecticut Facilities were vandalized and sabotaged.[13]Patient identifying information (including patient wrist bands, door name plates, and dietary requirement documents) were mixed up.[14] Medical records were altered, medical equipment was damaged or hidden, and laundry equipment was vandalized.[15] 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"[16] and to resort to "more militant" levels of activity.[17] The President of the NEHCEU 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."[18] After the incidents, NEHCEU's communications director wrote to fellow employees, referring to the allegations of vandalism and destruction. The communication sent out to union members included the statement: "Of course anyone with a pea-sized brain would realize this isn't a tactic we would undertake."[19]When a reporter asked the NEHCEU about the vandalism and destruction at the Care One facilities, NEHCEU's communications director 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.[20]

The record also contains several emails from the time following the incident. They include an email from Deborah Chernoff, Communications Director of the New England Health Care Employees Union, District 1199, SEIU, which describes a response to a FOIA request the Unions made to the Department of Health as "mudd[ying] the waters and support[ing] the contentions of the workers that" patients may have removed their identifying bracelets themselves rather than saboteurs.[21] There is also an email from Chernoff to Chas Walker, Elected Organizer, and others in SEIU. It was sent after the vandalism and sabotage. The email appears to be a


response to Walker's suggestion that 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."[22] The email also stressed the Unions' obligation to their members.

In addition, in 2011, with the assistance of 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.[23]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.[24] The second asks: "Is HealthBridge Giving Your Loved One Anti-Psychotic Drugs?" and asserts that Care One excessively administered medications.[25] The third asks: "Overbilled at a HealthBridge Nursing Home?," and references overbilling.[26] The fourth asks: "Who's in charge At HealthBridge Nursing Homes?" and states that the facilities have an unhealthy level of turnover.[27]

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 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. She said the work had to be "vetted by the research department for accuracy, "[28] and the


advertisements were fact-checked by trusted researchers and outside counsel.[29]

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 Health to obtain approval for capital improvement projects at their facilities.[30] The Unions' objections delayed approval of Care One's applications.

In February 2012, the Unions also asked Senator Richard Blumenthal, one of Connecticut's two United States Senators, to investigate Care One's alleged questionable billing practices. Senator Blumenthal responded by asking the Secretary of Health and Human Services to audit Care One's billing practices.

The Unions' campaign also included peaceful demonstrations, including one held in August 2012 at Care One's offices, where petitions for fair collective bargaining were delivered to Care One's owner and CEO, Daniel Straus. In addition, the Unions staged a peaceful protest at NYU Law School where demonstrators handed out materials questioning Straus's purported hypocrisy for endowing the Institute for the Advanced Study of Law & Justice at NYU while allegedly violating labor law.

II. Procedural Background

Care One brought this suit for damages based on claims of defamation, trade libel, and racketeering. The Complaint alleged that the Unions' conduct transcended the limits of organizing or legitimate advocacy and was more accurately defined as a pattern of racketeering activity under RICO.[31]Indeed, the animosity between Care One and the Unions as well as Care One's assessment of the Unions' "advocacy" is forcefully communicated at the outset of Appellants' Brief.


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