Care One Mgmt. v. United Healthcare Workers E.

• Decision Date: 28 October 2019
• Docket Number: Civ. No. 12-6371(SDW)(MAH)
• Parties: CARE ONE MANAGEMENT, LLC, et al., Plaintiffs, v. UNITED HEALTHCARE WORKERS EAST, SEIU 1199, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

CARE ONE MANAGEMENT, LLC, et al., Plaintiffs, v. UNITED HEALTHCARE WORKERS EAST, SEIU 1199, et al., Defendants.

Civ. No. 12-6371(SDW)(MAH)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

October 28, 2019

NOT FOR PUBLICATION

OPINION

WIGENTON, District Judge.

Before the Court are: 1) Plaintiffs Care One Management, LLC, HealthBridge Management, LLC ("HealthBridge"), the Care One Facilities,¹ and the HealthBridge Facilities'²(collectively, "Plaintiffs" or "Care One") Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure ("Rule") 56; and 2) Defendants 1199SEIU United Healthcare Workers East ("UHWE"), New England Health Care Employees Union, District 1199 ("NEHCEU"), and Service Employees International Union's ("SEIU") (collectively "Defendants" or "Defendant Unions") Motion for Summary Judgment pursuant to Rule 56. Jurisdiction is proper pursuant to 28 U.S.C. § 1331, 28 U.S.C. § 1337, and 28 U.S.C. § 1367. Venue is appropriate pursuant to 28 U.S.C. § 1391. This opinion is issued without oral argument pursuant to Rule 78. For the reasons stated herein, Plaintiffs' motion for summary judgment is DENIED and Defendants' motion for summary judgment is GRANTED.

I. BACKGROUND AND PROCEDURAL HISTORY

The core of the instant dispute is whether Defendants have permissibly pursued collective bargaining and unionization by means of "robust and often hard-charging speech and advocacy critical of the business and labor practices of Care One and its owner/CEO Daniel Straus ("Straus")," (D.E. 402 at 7³; Kekacs Decl. Ex 1 at 3 and Schedule 1)⁴, or instead, haveimpermissibly engaged in a "campaign of intimidation, interference, threats, deceptive trade practices, abuse of process, vandalism, and other illegal and extortionate conduct," that violates federal and state law, (D.E. 242 (Second Am. Compl. ("SAC")) ¶ 1). Because the parties' history is contentious and complex, this Court will only address those facts necessary to the determination of the instant motions.

Plaintiffs manage nursing homes and assisted living facilities for the elderly in New Jersey, Connecticut, and Massachusetts. (SAC ¶¶ 1, 25-30; D.E. 402-1 ¶¶ 2-3; Kekacs Ex. 1-3, 6 at 7.) Defendants are labor unions whose members are care providers at Plaintiffs' facilities. (SAC ¶ 118.)⁵ In Connecticut, Plaintiffs and NEHCEU negotiated and executed Collective Bargaining Agreements ("CBAs") at six of Plaintiffs' facilities ("the Connecticut Facilities") which established standards of wages, hours and other working conditions for union employees between December 31, 2004 through March 16, 2011. (Kekacs Decl. Ex. 11-16; Alito Decl. Ex. 15 ¶¶ 2-4.) In New Jersey, UHWE helped unionize Plaintiffs' facility in Somerset ("Somerset Facility"), and was elected as the exclusive bargaining representative for that location in 2010. (D.E. 402-8 ¶¶ 2-5; 402-4 ¶ 7; Kekacs Decl. Ex. 278 at 73:22-74:14, 121:2-8; Ex. 274 at 45:11-22; see also 1621 II, 725 F. App'x at 134-36.)

Beginning in 2010 and continuing through 2011, Defendants filed charges against Plaintiffs with the National Labor Relations Board ("NLRB") alleging that Plaintiffs had: 1) improperly terminated or threatened employees, discontinued benefits, and wrongfully suppressed union communications at the Connecticut Facilities; and 2) engaged in unfair labor practices during and after the union election in Somerset in order to impede employees' exerciseof labor rights.⁶ See HealthBridge Mgmt., LLC v. NLRB, 902 F.3d 37, 40-42 (2d Cir. 2018); HealthBridge Mgmt., LLC v. NLRB, 798 F.3d 1059, 1064-66 (D.C. Cir. 2015); 1621 Route 22 W. Operating Co., LLC v. NLRB, 825 F.3d 128, 133-37 (3d Cir. 2016) ("1621 I"); 1621 II, 725 F. App'x. at 133-35. The NLRB subsequently issued Complaints and Notices of Hearing pursuant to those charges, alleging that Plaintiffs were "interfering with, restraining, and coercing employees in the exercise of their rights guaranteed" by the National Labor Relations Act, 29 U.S.C. § 151 et seq. ("NLRA"), and "refusing to bargain collectively and in good faith with the exclusive collective bargaining representative of" their employees. (See Kekacs Decl. Ex. 234 - 238.)⁷

In January 2011, while these complaints were pending, NEHCEU and Plaintiffs' representatives began negotiations to renew the Connecticut Facilities' CBAs. (D.E. 402-1 Sec. D.) Negotiation topics included wages, work hours, retirement and pension benefits, health care premiums, staffing ratios, and education/training. (See e.g., Kekacs Decl. Ex. 26-33, 35.) Despite engaging in thirty-eight bargaining sessions, the last of which was held on May 31, 2012, the parties were unable to finalize successor agreements. (D.E. 402-1 ¶ 40; D.E. 402-2 ¶¶ 19-20; Alito Decl. Ex. 194-197, 200-201; Kekacs Decl. Ex. 26-33, 35.) On June 22, 2012, NEHCEU called a strike at the Connecticut Facilities, which was to begin on July 3, 2012 at 6 a.m. (D.E. 402-1 ¶¶ 315-19; D.E. 402-2 ¶ 84.) On the night of July 2, 2012, the ConnecticutFacilities were vandalized and sabotaged by unknown persons. (D.E. 402-1 ¶¶ 322-23; SAC ¶ 169.) The damage done to the facilities included tampering with patient identifying information (including patient wrist bands, door name plates, and dietary requirements), altering medical records, damaging and/hiding medical equipment, and vandalizing laundry equipment. (Alito Decl. Ex. 250-52, 254-59; Kekacs Decl. Ex. 140, 366.) Although numerous police and incident reports were filed, the persons responsible were never identified. (See Alito Decl. Ex. 250-52, 254-59; Kekacs Decl. Ex. 129 at CareOne_99539 (noting that "efforts to identify those responsible for [sabotage] have been unsuccessful").)

Prior to this event, in 2011, NEHCEU and UHWE, with assistance from SEIU, launched what Defendants describe as a "public speech and advocacy campaign" (the "Campaign")⁸ critical of Plaintiffs' business and labor practices. (See D.E. 402-1 ¶¶ 85-88; 402-3 ¶¶ 27-29; 402-4 ¶¶ 18-20; 402-6 ¶ 15.) The Campaign included: 1) the launch of websites entitled, "Care One Watch" and "HealthBridge Watch" (collectively, "COW"); 2) publication of print and radio advertisements, including billboards; and 3) dissemination of flyers. (SAC ¶¶ 126, 208.) The Campaign's websites, advertisements, and flyers questioned the propriety of Plaintiffs' billing practices and standards of patient care, challenged Plaintiffs' opposition to unionization, and publicized NLRB complaints filed against Plaintiffs. (See SAC ¶¶ 209-37, Ex. M-II; Kekacs Decl. Ex. 39, 40, 42, 72, 79, 83, 84, 86, 90, 105, 106, 151, 152, 286⁹.) The Campaign also staged peaceful protests and demonstrations, including one held on August 23, 2012 at CareOne's offices which included the delivery of petitions to Straus that called for fair collective bargaining, (D.E. 402-2 ¶ 103; 402-4 ¶ 96; 402-5 ¶¶ 57-61; 402-10 ¶ 6; 402-16 ¶ 4; Kekacs Decl. Ex. 142-44), and one at New York University Law School ("NYU") at which demonstrators handed out materials that questioned Straus's values, specifically what Defendants called the "hypocrisy" of endowing the Institute for the Advanced Study of Law & Justice at NYU while "breaking labor law." (See SAC Ex. JJ, KK, MM, NN, AAA; Kekacs Decl. Ex. 54, 55, 57, 58.)

Defendants also engaged in regulatory activity. In July 2011 and continuing through November, in response to Plaintiffs' filing of Determination of Need ("DoN") applications with the Massachusetts Department of Health to obtain approval for capital improvement projects at several of its skilled nursing facilities in that state, (SAC Ex. I; Kekacs Decl. Ex. 145; Alito Decl. Ex. 133 at 25:21-27:16), UHWE filed petitions for public hearings on three of Plaintiffs' applications. (Kekacs Decl. 149, 150; see also 105 Mass. Code Regs. 100.445 (providing that public hearings may be held to "allow any Person to make their views known with respect to [a DoN]" and to present "any comment(s) that may be relevant to the consideration of an Application").)¹⁰ In February 2012, Defendants asked Richard Blumenthal, a United States Senator for Connecticut, to look into what Defendants contended were questionable billing practices by Plaintiffs. (Alito Decl. Ex. 118 at 97:4-20.) On February 22, 2012, the Senator sent a letter to the Secretary of Health and Human Services asking that the Department "audit Healthbridge's billing practices to Medicare and take any necessary enforcement actions." (Kekacs Decl. Ex. 102.)

On October 10, 2012, Plaintiffs filed suit in this Court alleging that Defendants have ceased with traditional organizing and negotiation tactics in favor of extortion and fraud inviolation of federal and state law. (D.E. 1.) The current operative pleading is the SAC, filed on June 16, 2015, which alleges that Defendants violated the Racketeer Influenced Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO") (Counts One through Six)¹¹, and engaged in Defamation (Count Seven) and Trade Libel (Count Eight). (D.E. 242.) At its core, the SAC alleges that Defendants used force and violence in concert with unlawful economic pressure to force Plaintiffs to accede to Defendants' bargaining and unionization demands. (See SAC ¶ 168 (alleging that Defendants "(1) engag[ed] in vandalism and other criminal acts to endanger patients and . . . bring about negative outcomes before the Connecticut regulatory authorities; (2) disseminat[ed] false, misleading, and defamatory information about Plaintiffs . . . ; (3) publicly smear[ed] [Straus] and his other businesses . . .; and (4) abus[ed] the legal process . . . .".) The parties filed their respective motions for summary judgment on March 15, 2019, and all briefs were timely filed. (D.E. 398-407, 414-18, 420-22, 424-26.)

II. LEGAL STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The "mere existence of some...