Mou v. SSC San Jose Operating Co.

• Citation: 415 F.Supp.3d 918
• Decision Date: 22 November 2019
• Docket Number: Case No. 5:18-cv-01911-EJD
• Court: U.S. District Court — Northern District of California
• Parties: Karen MOU, Plaintiff, v. SSC SAN JOSE OPERATING COMPANY LP, et al., Defendants.

415 F.Supp.3d 918

Karen MOU, Plaintiff,

v.SSC SAN JOSE OPERATING COMPANY LP, et al., Defendants.

Case No. 5:18-cv-01911-EJD

United States District Court, N.D. California, San Jose Division.

Signed November 22, 2019

Matthew Brooks Borden, Athul Karinja Acharya, Jonas Noah Hagey, BraunHagey & Borden LLP, San Francisco, CA, for Plaintiff.

Bridget Ann Gordon, Katrina Angela Pagonis, Sansan Lin, Hooper, Lundy and Bookman, P.C., Los Angeles, CA, Mark A. Johnson, Stanton James Stock, Hooper Lundy Bookman PC, San Diego, CA, Mark Emerson Reagan, Scott Jason Kiepen, Hooper Lundy & Bookman, Inc., San Francisco, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS; GRANTING IN PART MOTION TO EXTEND CASE MANAGEMENT DEADLINES

Re: Dkt. Nos. 61, 86

EDWARD J. DAVILA, United States District Judge

I. INTRODUCTION

Plaintiff Karen Mou¹ initiated this putative class action suit after she was discharged from Defendant Courtyard Care Center ("Courtyard"), a skilled nursing facility ("SNF") in San Jose, California. Plaintiff alleges that Defendants failed to comply with numerous statutorily mandated discharge procedures in violation of California Health and Safety Code § 1430(b) and California Business & Professions Code § 17200. Plaintiff characterizes Defendants' conduct as "dumping"—an allegedly "common business practice" used by SNFs "to summarily get rid of their poorest and neediest residents to make room for more lucrative clients." First Am. Compl. ("FAC") (Dkt. No. 16) ¶ 5.

Defendants removed the action on the basis of federal question jurisdiction under 28 U.S.C. § 1331 because the Health and Safety Code claim is premised in part on violations of federal law (i.e. , 42 U.S.C. §§ 1395i-3(c)(2)(B)(i)(I)-(III), 42 U.S.C. § 1395i-3(c)(2)(B)(ii), 42 C.F.R. § 483.15(c)(2)-(5), and 42 C.F.R. § 431.210 ), as well as on the basis of diversity jurisdiction under 28 U.S.C. § 1332(a). At the direction of the Court, Defendants later filed an amended notice of removal based solely on diversity jurisdiction. Dkt. No. 34. Defendants now move to dismiss each of the claims or in the alternative for a more definite statement.² Dkt. No. 61. To the extent any of Plaintiff's claims are not dismissed, Defendants move to strike certain allegations. For the reasons set forth below, Defendants' motion will be granted in part and denied in part.

II. BACKGROUND³

Courtyard is part of a for-profit nursing home chain run by Defendant SavaSeniorCare, LLC ("Sava") and a large network of commonly owned and controlled affiliates, subsidiaries and "shell" entities. FAC ¶¶ 9, 30. Sava manages six SNFs in California (collectively "Facility Defendants"): (1) Courtyard; (2) Defendant SS Pittsburg Operating Company LP, dba Diamond Ridge Healthcare Center ("Diamond Ridge"); (3) Defendant SSC Oakland Excell Operating Company LP, dba Excell Health Care Center ("Excell"); (4) Defendant SSC Newport Beach Operating Company LP, dba Flagship Healthcare Center ("Flagship"); (5) Defendant SSC Carmichael Operating Company LP, dba Mission Carmichael Healthcare Center ("Mission Carmichael"); and (6) Defendant SSC Tarzana Operating Company LP, dba Tarzana Health and Rehabilitation Center ("Tarzana Health"). Id. ¶¶ 20-25. Each of the Facilities Defendants has the same governing board officers and members, and all of the Facilities Defendants are owned by California Holdco, LLC ("Holdco"). Id. ¶¶ 26, 27. Holdco is a holding company that maintains a 98.99% ownership interest in each of the Facility Defendants. Id. ¶ 27.

Sava owns Defendant SavaSeniorCare Administrative Services, LLC, which owns, operates, controls and/or provides services to the SNFs in the Sava chain in California and other states. Id. ¶ 31. Defendant SavaSeniorCare Consulting, LLC also owns, operates, controls and/or provides services to the SNFs in the Sava chain in California and other states. Id. ¶ 32. Defendant SSC Disbursement Company, LLC either directly or indirectly owns, operates, controls and/or provides services or capital to the SNFs in the Sava chain in California and other states. Id. ¶ 34.

Plaintiff was admitted as a resident of Courtyard on January 16, 2015 for rehabilitation after she was hit by a car as a pedestrian. Id. ¶ 46. She suffered from a lower femur fracture, fracture of the upper end of the fibula and tibia, fracture of her lumbar vertebra, fracture of her sternum, thoracic aorta injury, liver injury, other pulmonary embolism and infarction, acute venous embolism and thrombosis of deep vessels of distal lower extremity, intercranial injury and hypertension. Id. On March 28, 2015, Courtyard told Plaintiff she had to leave, even though Plaintiff was barely able to walk with the help of a four-wheeled walker. Id. ¶ 47. Courtyard did not provide Plaintiff with a 30-days' written notice. Id. ¶ 48. Nor did Courtyard notify her of her rights (a) to appeal, (b) to remain in the facility while her appeal was pending, and (c) to consult with an ombudsman. Id. After her eviction, Plaintiff requested a hearing before the California Department of Health Care Services ("DHCS"). Id. ¶ 49. On June 3, 2015, the State ruled in Plaintiff's favor and found that Defendants had illegally discharged her by failing to provide advance written notice. Id.⁴ On February 20, 2018, Plaintiff filed the instant action.

Plaintiff asserts two causes of action: (1) an action under California Health and Safety Code § 1430(b) predicated upon alleged violations of California's Patient Bill of Rights and other rights provided by other federal or state laws or regulations; and (2) violation of California Business and Professions Code § 17200 ("UCL") predicated upon "unlawful, fraudulent and/or unfair" conduct. Id. ¶¶ 64-79. Plaintiff seeks an injunction prohibiting Defendants' allegedly unlawful business practices, including wrongfully discharging residents, and $500 per statutory violation for each resident allegedly unlawfully discharged within the last four years. Id. ¶¶ 11, A, B.

III. STANDARDS

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of claims alleged in the complaint. Fed. R. Civ. P. 12(b)(6) ; Conservation Force v. Salazar , 646 F.3d 1240, 1241-42 (9th Cir. 2011), cert. denied , sub nom Blasquez v. Salazar , 565 U.S. 1261, 132 S. Ct. 1762, 182 L.Ed.2d 532 (Mar. 19, 2012). The complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) ). When deciding whether to grant a motion to dismiss, the court must construe the alleged facts in the light most favorable to the plaintiff. Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am. , 768 F.3d 938, 945 (9th Cir. 2014). However, courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quotations omitted). "Dismissal is proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory." Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001) (citing Balistreri v. Pacifica Police Dep't , 901 F.2d 696, 699 (9th Cir. 1988) ).

Consumer-protection claims that sound in fraud, as Plaintiffs' UCL claim does in part, are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Vess v. Ciba-Geigy Corp. USA , 317 F.3d 1097, 1102 (9th Cir. 2003) ; see also Kearns v. Ford Motor Co. , 567 F.3d 1120, 1125 (9th Cir. 2009) ; In re Apple and AT & T iPad Unlimited Data Plan Litig. , 802 F. Supp. 2d 1070, 1075 (N.D. Cal. 2011) ( Rule 9(b) applies to claims under the UCL). Rule 9(b) requires a party to state with particularity the circumstances constituting fraud. Fed. R. Civ. P. 9(b). The circumstances constituting the fraud must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner , 780 F.2d 727, 731 (9th Cir. 1985). Therefore, a party alleging fraud must set forth "the who, what, when, where, and how" of the misconduct. Vess , 317 F.3d at 1106 (quoting Cooper v. Pickett , 137 F.3d 616, 627 (9th Cir. 1997) ).

Under Rule 12(e), "[a] party may move for a more definite statement of a pleading...[when that pleading] is so vague or ambiguous that the party cannot reasonably prepare a response." Fed. R. Civ. P. 12(e). The decision to grant a motion under Rule 12(e) is within the discretion of the trial court. Griffin v. Cedar Fair, L.P. , 817 F. Supp. 2d 1152, 1154 (N.D. Cal. 2011). Typically, such motions are disfavored in light of the liberal pleading standard, and "should not be granted unless the defendant cannot frame a responsive pleading." See Famolare, Inc. v. Edison Bros. Stores, Inc. , 525 F. Supp. 940, 949 (E.D. Cal. 1981) (citing Boxall v. Sequoia Union High Sch. Dist. , 464 F. Supp. 1104, 1114 (N.D. Cal. 1979) ).

Rule of Civil Procedure 12(f) permits a court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). When the court considers a motion to strike, it "must view the pleadings in a light most favorable to the pleading party." In re 2TheMart.com, Inc. Sec. Litig. , 114 F. Supp. 2d 955, 965 (C.D. Cal. 2000). A motion to strike will generally not be granted unless it is clear the matter to be stricken could not have any possible bearing on the subject matter of the litigation. See RDF Media Ltd. v. Fox Broad. Co. , 372 F. Supp. 2d 556, 566 (C.D. Cal. 2005).

IV. DISCUSSION

Defendants contend that Plaintiff's section 1430(b) claim under the Long-Term Care, Health, Safety, and Security Act of 1973 (the "Act") is time-barred, having...