Loucks v. Kaiser Foundation Hospitals

Background

The plaintiffs alleged that Shawn Loucks received care at Kaiser Santa Rosa on February 10 and 20, 2019, after suffering strokes, and was later transferred to a UCSF hospital, where he died on February 23, 2019. They alleged that Kaiser improperly discharged him after the first visit, delayed diagnosis and treatment during the second visit, and delayed obtaining a critical-care ambulance. They also alleged that American Medical Response and UCSF contributed to the delays.

The complaint asserted claims for medical malpractice, dependent adult abuse, negligent infliction of emotional distress, intentional misconduct, violations of the Emergency Medical Treatment and Labor Act, and wrongful death. The defendants included Kaiser Foundation Hospitals, Kaiser Foundation Health Plan, Inc., The Permanente Medical Group, Inc., American Medical Response, and the Regents of the University of California.

UC Regents’ Motion

The Regents moved to dismiss for lack of personal jurisdiction, arguing that the Eleventh Amendment protected them from suit in federal court. The court explained that the Regents have repeatedly been treated as an instrumentality or arm of the State of California entitled to that immunity. The court also considered the Ninth Circuit’s factors for determining whether an entity is an arm of the state, including whether a judgment would be paid from state funds, whether the entity performs governmental functions, and how state law treats the entity.

The court concluded that, although some factors weighed against immunity, other factors favored treating the Regents as an arm of the state. It also found that the plaintiffs had not shown a waiver of immunity and had not established jurisdictional facts sufficient to overcome the motion. The court therefore granted the UC Regents’ Motion to Dismiss for Lack of Personal Jurisdiction as to the Regents.

Kaiser’s Motion to Compel Arbitration

Kaiser moved to compel arbitration and stay the case as to Kaiser, or alternatively to dismiss the plaintiffs’ claims. The court applied the Federal Arbitration Act and California contract principles. The relevant Kaiser health-plan materials required binding arbitration for disputes related to the health plan or the delivery of medical services, including medical-malpractice claims. The materials also stated that heirs, relatives, and personal representatives could be covered by the arbitration provision.

The plaintiffs argued that the arbitration disclosure did not comply with California Health and Safety Code section 1363.1 and that the enrollment form was not a binding contract because Kaiser had not signed it and no 2019 enrollment form had been provided. The court rejected those arguments. It found that the disclosure clearly covered binding arbitration and medical-malpractice claims, was prominently displayed immediately above the signature line, and substantially followed the required language. The court also found that the parties’ conduct—including Mr. Loucks’s receipt of health-insurance coverage and Kaiser’s provision of that coverage—showed the existence of a contract. In addition, the agreement between Kaiser and the San Francisco Health Service System contained the arbitration clause and bound Mr. Loucks.

The plaintiffs also argued that the court should deny arbitration because other defendants were not parties to the arbitration agreement and different proceedings could produce conflicting results. The court concluded that the California statute cited by the plaintiffs did not give it discretion to deny arbitration in these circumstances and that the claims, including wrongful-death and emotional-distress claims brought by heirs or other third parties, fell within the arbitration requirement.

Disposition

The court granted Kaiser’s Motion to Compel Arbitration and stayed the case as to the plaintiffs’ claims against Kaiser. Because the court compelled arbitration, it denied Kaiser’s alternative Motion to Dismiss as moot. The order disposed of Docket Nos. 14 and 29. It did not decide whether the plaintiffs ultimately proved their underlying medical-care or wrongful-death claims.