Mou v. SSC San Jose Operating Company LP

Background

Karen Mou alleged that Courtyard Care Center, a skilled nursing facility, discharged her on March 28, 2015, without giving her 30 days’ written notice or informing her about her rights to appeal, remain at the facility while appealing, and consult an ombudsman. A state administrative decision later found that defendants had illegally discharged her by failing to provide advance written notice. Mou filed this putative class action on February 20, 2018.

Mou asserted two causes of action: a claim under California Health and Safety Code § 1430(b), based on alleged violations of nursing-home residents’ rights under federal and state law, and a claim under California’s Unfair Competition Law. She sought up to $500 for each alleged statutory violation, an injunction, punitive damages, and class relief. Co-plaintiff Anita Willis voluntarily dismissed her claims.

Motion to Dismiss

The defendants argued that the § 1430(b) claim was barred by California’s one-year deadline for penalties. Judge Davila rejected that argument, holding that § 1430(b) provides damages rather than a civil penalty. The court therefore applied California’s three-year deadline and denied the motion to dismiss that claim because Mou filed suit within three years of her discharge.

The court dismissed the Unfair Competition Law claim with leave to amend. The complaint alleged only generally that defendants’ conduct was unlawful, fraudulent, and unfair, without identifying the conduct supporting each theory or providing enough facts for fair notice. The court also declined to consider factual details that Mou raised only in her opposition brief rather than in the complaint.

Claims Against Defendants Other Than Courtyard

Mou sought to hold defendants other than Courtyard responsible under the alter-ego doctrine. That doctrine can allow a court to disregard separate corporate identities when there is a unity of interest and ownership and treating the entities separately would produce an inequitable result.

The court found that Mou’s allegations might sufficiently support unity of interest and ownership, including allegations about common governing officers and members, common ownership, shared services, and coordinated operations. But the allegations did not plausibly show an abuse of the corporate form or that defendants other than Courtyard actively participated in her discharge. The claims against all defendants other than Courtyard were dismissed with leave to amend.

Motion to Strike

The court granted the motion to strike allegations concerning California regulations protecting rights to consent to or refuse treatment and to receive material information about proposed treatment. Mou’s discharge was not alleged to be a medical treatment or procedure, and the complaint did not provide facts supporting those alleged violations.

The court denied the motion to strike allegations concerning freedom from mental or physical abuse, dignity and individuality, assistance in exercising patient rights, and the federal requirement that residents be able to exercise their rights without interference, coercion, discrimination, or reprisal. Although the allegations were limited, the court found that they could plausibly relate to Courtyard’s evaluation and discharge of Mou.

The court struck Mou’s request for injunctive relief because it was moot: she had already been discharged, was not seeking readmission, and the class had not yet been certified. The court denied the motion to strike the class allegations because Mou alleged a potentially classwide practice of discharging residents without proper notice, and the court found that class issues generally should be addressed at the class-certification stage.

The court denied the motion to strike punitive damages as to Courtyard and granted it as to all other defendants. As to Courtyard, the court found that the allegations satisfied the applicable pleading standard; it considered it premature to decide whether punitive damages are available under § 1430(b) while that issue was under review by the California Supreme Court.

Disposition

The court stated that the defendants’ motion to dismiss and strike was granted in part and denied in part. Mou was permitted to file an amended complaint by December 9, 2019. The court also granted in part Mou’s motion to extend case-management deadlines, extending them by four months rather than the requested six months. The order listed new deadlines for fact discovery, expert disclosures, dispositive motions, the anticipated dispositive-motion hearing, and the trial-setting conference.