415 F.Supp.3d 918
N.D. Cal.2019Background
- Plaintiff Karen Mou was discharged from Courtyard Care Center (a SavaSeniorCare SNF) on March 28, 2015; she alleges the facility failed to give 30 days’ written notice and failed to inform her of appeal/ombudsman rights. The DHCS later ruled in Mou’s favor on administrative appeal.
- Mou filed a putative class action on February 20, 2018 against Courtyard and a group of Sava-related entities, asserting (1) Cal. Health & Safety Code § 1430(b) claims (Patient Bill of Rights violations) and (2) UCL claims for unlawful/fraudulent/unfair business practices (so‑called “dumping”).
- Defendants removed (initially asserting federal-question, later proceeding on diversity) and moved to dismiss or for a more definite statement and to strike certain allegations.
- The Court held that § 1430(b) provides for civil damages (not a civil penalty), so the 3‑year statute of limitations applies and Mou’s § 1430(b) claim is timely.
- The UCL claim was dismissed with leave to amend for lack of particularized factual allegations; alter‑ego allegations against non‑Courtyard defendants were dismissed with leave to amend; certain regulatory references were struck as immaterial; injunctive relief was struck as moot; class allegations survived; punitive damages permitted against Courtyard only.
Issues
| Issue | Mou’s Argument | Defendants’ Argument | Held |
|---|---|---|---|
| Whether § 1430(b) is governed by a 1‑year (penalty) or 3‑year (damages) statute of limitations | § 1430(b) authorizes civil damages; 3‑year limitations (Cal. CCP § 338(a)) applies | § 1430(b) is a statutory penalty; 1‑year limitations (Cal. CCP § 340(a)) applies | § 1430(b) provides for damages; 3‑year statute applies; claim timely. |
| Sufficiency of UCL claim (unlawful/fraudulent/unfair) | Alleged statutory/regulatory violations and concealment of appeal rights support UCL | Allegations are conclusory and do not give fair notice; fraud-based pleadings need particularity | UCL claim dismissed with leave to amend for lack of specific factual allegations. |
| Liability of non‑Courtyard defendants via alter ego/single enterprise | Corporate structure and shared services show unity and inequity if separate entities shield liability | Allegations are conclusory; no specific facts showing abuse of corporate form or that non‑Courtyard entities controlled the discharge decision | Alter‑ego allegations insufficient; claims against non‑Courtyard defendants dismissed with leave to amend. |
| Whether certain regulatory citations (e.g., Cal. Code Regs. tit. 22 § 72527(a)(4),(5),(7),(10),(12); 42 C.F.R. § 483.10(b)) should be stricken | Regulations are relevant to resident rights and support claims | Some cited regs are inapplicable or unsupported by facts and thus immaterial | §§ 72527(a)(4) and (5) stricken as inapplicable; (a)(7),(a)(10),(a)(12) and § 483.10(b) not stricken. |
| Request for injunctive relief (prospective relief and monitor) | Injunctive relief appropriate to prevent ongoing “dumping” practice | Mou is a former resident with no readmission request; injunction is moot | Request for injunctive relief stricken as moot. |
| Class allegations (whether class should be stricken now) | Defendants follow a uniform discharge practice making class treatment appropriate | Individualized medical and procedural inquiries predominate | Motion to strike class allegations denied; class issues premature at pleading stage. |
| Punitive damages | Punitive damages alleged for abusive conduct | Punitive damages unavailable under § 1430(b)/UCL or insufficiently pleaded | Not stricken as to Courtyard (pleading adequate under Rule 8); stricken as to other defendants. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: factual plausibility required)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
- Kizer v. County of San Mateo, 53 Cal. 3d 139 (overview of the Long‑Term Care Act and discussion of remedies)
- Nevarrez v. San Marino Skilled Nursing & Wellness Ctr., LLP, 221 Cal. App. 4th 102 (legislative history confirming § 1430(b) ‘‘action for damages’’)
- Cel‑Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163 (defining UCL’s ‘‘unfair’’ prong)
- Vess v. Ciba‑Geigy Corp. USA, 317 F.3d 1097 (Rule 9(b) applies to fraud‑based UCL claims)
- Sonora Diamond Corp. v. Superior Court, 83 Cal. App. 4th 523 (alter‑ego / piercing corporate veil standards)