United States District Court, S.D. California
September 30, 2005.
RICHARD SCHOLL, on behalf of ESTATE OF MILDRED SCHOLL; KATHLEEN LEVIN, on behalf of ESTATE OF KATHLEEN VAN ARUM, and on behalf of all others similarly situated, Plaintiffs,
MANOR CARE, INC.; MANOR CARE OF AMERICA, INC.; MANOR CARE PROPERTIES, INC.; MANOR CARE HEALTH SERVICES, INC., Defendants.
The opinion of the court was delivered by: NAPOLEON JONES, District Judge
(1) DENYING DEFENDANT'S MOTION TO DISMISS UNDER RULE 12(b)(1);
(2) DENYING DEFENDANT'S MOTION TO DISMISS UNDER RULE 12(b)(6);
(3) DENYING DEFENDANT'S MOTION TO DISMISS UNDER RULE 9(b);
(4) GRANTING DEFENDANT'S MOTION TO STRIKE INJUNCTIVE RELIEF; and
(5) STRIKING PARAGRAPHS 90 AND 96(b) OF THE COMPLAINT UNDER RULE
Currently before the Court is a Motion to Dismiss ("Motion")
under Federal Rules of Civil Procedure 12(b)(1) ("Rule
12(b)(1)"), 12(b)(6) ("Rule 12(b)(6)"), 9(b) ("Rule 9(b)") and a
Motion to Strike under 12(f) ("Rule 12(f)") and supporting
Memorandum of Points and Authorities in Support thereof filed by
Defendant Manor Care, Inc. ("Defendant") [Doc. No. 6.] Plaintiffs
Richard Scholl and Kathleen Levin ("Plaintiffs") have filed an
Opposition to the Motion. [Doc. No. 10.] Defendant has also filed a Reply. [Doc.
No. 14.] For the reasons set forth below, the Court DENIES
Defendant's Motion to Dismiss under Rule 12(b)(1), DENIES
Defendant's Motion to Dismiss under Rule 12(b)(6); GRANTS
Defendant's Motion to Strike injunctive relief, and STRIKES
paragraphs 90 and 96(b) of the Complaint.
Plaintiffs Richard Scholl and Kathleen Levin are individuals
residing in San Diego and appearing respectively on behalf of the
estates of their mothers, Mildred Scholl and Kathleen Van Arum,
as well as on behalf of all others similarly situated.
(Complaint, Prayer for Relief.) Defendant Manor Care Health
Services, Inc., is a corporation organized and existing under the
laws of Delaware with its principal place of business located in
Ohio. (Complaint ¶ 6). Defendant Manor Care Health Services,
Inc., and affiliated companies Defendants Manor Care, Inc., Manor
Care of America, Inc., and Manor Properties, Inc. (collectively,
"Manor Care"), own and operate ten facilities in the State of
California that treat the elderly. (Complaint ¶ 4).
Plaintiffs allege that their mothers were subjected to
substandard care during their time as residents at Defendant's
facility located in Encinitas, California. (Id. ¶ 6). In
addition to their personal claims, Plaintiffs also seek to
represent a purported class consisting of all persons who resided
as patients at the Manor Care skilled nursing facility in
Encinitas at any time in the four (4) years preceding the filing
of the complaint. (Id. ¶ 77). Specifically, Plaintiffs allege
that on a class-wide basis Manor Care has failed to maintain
adequate staffing at their Encinitas facility and that as a
result, residents have suffered from: (1) pressure sores
resulting from staff failure to turn over bedfast residents; (2)
incontinence and urinary tract infections resulting from
inadequate toileting assistance; (3) falls resulting from the
failure to respond to call lights; (4) malnutrition resulting
from inadequate feeding assistance and lack of monitoring; and
(5) dehydration. (Id. ¶ 4-5). According to Plaintiffs,
Defendant misrepresented the level of care, services, and
staffing levels to the public in their written marketing
materials and admission agreement. (Id. ¶ 10).
Plaintiffs filed a Complaint in the Superior Court of the State
of California that was subsequently removed to this Court on
diversity of citizenship grounds under the Class Action Fairness Act. Plaintiffs have alleged the following causes of
action against Defendant: (1) unlawful, unfair, and fraudulent
business acts and practices in violation of California Business &
Professions Code §§ 17200 and 17500 (together, the unfair
competition law, "UCL"); (2) false advertising; (3) violation of
the Consumer Legal Remedies Act (Cal. Civ. Code § 1750 et seq.);
and (4) unjust enrichment. (Complaint ¶¶ 86-106). Defendant now
seeks to dismiss the action for: (1) lack of subject matter
jurisdiction; (2) failure to state a claim on which relief can be
granted; and (3) failure to plead fraud with the requisite
particularity. Additionally, Defendant moves to strike
Plaintiffs' request for injunctive relief.
I. Legal Standards
A. Motion to Dismiss Pursuant to Rule 12(b)(1)
Under Federal Rule of Civil Procedure Rule 12(b)(1), a
defendant may seek to dismiss a complaint for "lack of
jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1).
Federal subject matter jurisdiction must have a statutory
basis. The primary sources of federal subject matter jurisdiction
are federal question jurisdiction under 28 U.S.C. § 1331,
diversity jurisdiction under 28 U.S.C § 1332, and supplemental
jurisdiction under 28 U.S.C. § 1367.
When considering a Rule 12(b)(1) motion, the district court "is
free to hear evidence regarding jurisdiction and to rule on that
issue prior to trial, resolving factual disputes where
necessary." Augustine v. United States, 704 F.2d 1074, 1077
(9th Cir. 1983). "In such circumstances, `[n]o presumptive
truthfulness attaches to plaintiff's allegations, and the
existence of disputed facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional claims.'"
Id. (quoting Thornhill Publishing Co. v. General Telephone &
Electronic Corp., 594 F.2d 730, 733 (9th Cir. 1979)).
Plaintiffs, as the party seeking to invoke jurisdiction, have the
burden of establishing that jurisdiction exists. See Kokkonen v.
Guardian Life Ins. Co. of Am., 114 S. Ct. 1673, 1675 (1994).
B. Motion to Dismiss Pursuant to Rule 12(b)(6)
Federal Rules of Civil Procedure Rule 12(b)(6) provides that a
complaint may be dismissed for failure to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion to dismiss tests the sufficiency of the
complaint. See Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200
(9th Cir. 2003). Dismissal of a claim under this rule is
appropriate only where it "appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which
would entitle him to relief." Edwards v. Marin Park, Inc.,
356 F.3d 1058, 1061 (9th Cir. 2004), (quoting Conley v. Gibson,
355 U.S. 41, 45-46 (1957)). A complaint may be dismissed as a matter
of law for two reasons: (1) lack of a cognizable legal theory, or
(2) insufficient facts under a cognizable theory. Navarro v.
Block, 250 F.3d 729, 732 (9th Cir. 2001).
In reviewing the motion, the court must assume the truth of all
factual allegations and must construe them in the light most
favorable to the nonmoving party. Gompper v. VISX, Inc.,
298 F.3d 893, 895 (9th Cir. 2002). However, the court is not bound to
accept as true a legal conclusion couched as a factual
allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986); see
also Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.
1981). Instead, the court must determine "whether conclusory
allegations follow from the description of facts as alleged by
the plaintiff." Holden v. Hagopian, 978 F.2d 1115, 1121 (9th
When ruling on a motion to dismiss, the court may consider the
facts alleged in the complaint, documents attached to the
complaint, and documents relied upon but not attached to the
complaint when authenticity is not contested. Parrino v. FHP,
Inc., 146 F.3d 699, 705-06 (9th Cir. 1998); Fed.R.Civ.P.
C. Motion to Strike Pursuant to Rule 12(f)
Federal Rules of Civil Procedure Rule 12(f) provides that the
court may strike from any pleading "any insufficient defense or
any redundant, immaterial, impertinent, or scandalous matter."
Fed.R.Civ.P. 12(f). Immaterial matter is material "which has
no essential or important relationship to the claim for relief."
Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993),
rev'd on other grounds by 510 U.S. 517 (1994). Impertinent
material "consists of statements that do not pertain, and are not
necessary, to the issues in question." Id.
For purposes of the motion to strike, the court "must view the
pleading under attack in the light more favorable to the
pleader." Lazar v. Trans Union LLC, 195 F.R.D. 665, 669 (C.D.
Cal. 2000); see also California v. United States, 512 F. Supp. 36,
39 (N.D. Cal. 1981). Because striking a portion of a pleading is
a drastic remedy, Rule 12(f) motions are disfavored and
infrequently granted. Lazar, 195 F.R.D. at 669. For a motion to
strike to succeed, the movant must show that the allegations
objected to are "so unworthy of any consideration . . . that
their presence in the pleading throughout the proceedings will be
prejudicial to the moving party." 5A Wright & Miller, Federal
Practice and Procedure § 1380 (2d ed. 1990). Motions to strike
based on impertinent or immaterial matters are usually denied
unless "the allegations have no possible relation to the
controversy." Id. § 1382.
I. 12(b)(1) Motion to Dismiss
Under Rule 12(b)(1), Defendant moves to dismiss Plaintiff's
Complaint on the grounds of (1) the primary jurisdiction doctrine
and (2) lack of standing. For the reasons set forth below, this
Court DENIES Defendant's Motion on both grounds.
A. Primary Jurisdiction
Defendant argues that the doctrine of primary jurisdiction
requires this Court to decline jurisdiction over any alleged
incidents or complaints that have not first been reviewed by the
California's Department of Health Services ("CDHS") and the
federal government's Center for Medicare and Medicaid ("CMS").
(Def.'s Mem. of P. and A. at 2-3.) Plaintiffs contend that
invoking the doctrine is improper. For the reasons stated below,
this Court FINDS that it has jurisdiction over each of
Plaintiffs' causes of action.
1. Background on Primary Jurisdiction Doctrine
The Supreme Court has spoken on the issue of primary
"The doctrine of primary jurisdiction . . . is
concerned with promoting proper relationships between
the courts and administrative agencies charged with
particular regulatory duties. "Primary jurisdiction,"
. . . applies where a claim is originally cognizable
in the courts, and comes into play whenever
enforcement of the claim requires the resolution of
issues which, under a regulatory scheme, have been
placed within the special competence of an
administrative body; in such a case the judicial
process is suspended pending referral of such issues
to the administrative body for its views . . . No
fixed formula exists for applying the doctrine of
primary jurisdiction. In every case the question is
whether the reasons for the existence of the doctrine
are present and whether the purposes it serves will
be aided by its application in the particular
litigation." United States v. Western Pac. R. Co., 352 U.S. 59,
63-64 (1956). The Court also suggested that two
reasons for invoking the doctrine are (1) to promote
uniform application of regulatory laws by having
agencies initially resolve certain administrative
questions and (2) to utilize the expert and
specialized knowledge of the agencies involved in
matters not within the conventional experience of
judges. Id. at 64.
The Ninth Circuit has also addressed this doctrine. In Brown
v. MCI Worldcom Servs., Inc., 277 F.3d 1166
, 1169 (9th Cir.
2002), the plaintiff filed a class action complaint alleging
overcharging by a telephone service provider. The district court
held that under the doctrine, the claim had to be resolved in the
first instance by the Federal Communications Commission ("FCC").
Id. The Ninth Circuit reversed and remanded the case to the
district court to determine whether the claims involved issues
requiring resolution by the FCC. Id. at 1173.
The court stated that the doctrine does not require that all
claims within an agency's purview be decided by the agency. Id.
at 1172 (citing U.S. Gen. Dynamics Corp., 828 F.2d 1356, 1362
(9th Cir. 1987)). The court added that the primary jurisdiction
doctrine is not intended to "secure expert advice for the courts
from regulatory agencies every time a court is presented with an
issue conceivably within the agency's ambit." Id. Finally, the
court concluded it was not clear from the record whether the
claims presented the "sort of complex and far-reaching issues
that are properly within the FCC's primary jurisdiction." Id.
2. Primary Jurisdiction Doctrine In Relation to Nursing Homes
Substantial compliance with federal regulations governing
nursing homes is a condition of participation in both the
Medicare and Medicaid programs. 42 C.F.R. § 488.406. The CDHS
regulates the quality of care administered to nursing home
residents. (Complaint ¶ 71); Cal. Health & Safety Code §§
1417-1439.8. The CDHS also provides an administrative complaint
procedure to investigate complaints regarding the care and
treatment provided by long-term health care providers. (Def.'s
Mem. of P. and A. 7-8.); Cal. Health & Safety Code § 1420. Most
importantly, the chapter of the California Health & Safety Code
that governs the quality of Long-Term Health Care facilities and
explains the administrative complaint procedure states: "the
remedies provided by this chapter are cumulative and shall not be construed as restricting any remedy . . . provided by law . . .
and no judgment under this chapter shall preclude any party from
obtaining additional relief based on the same facts." See Cal.
Health & Safety Code § 1433 (emphasis added).
California courts have been willing to address unfair business
claims against nursing homes. In People v. Casa Blanca
Convalescent Homes, Inc., 159 Cal.App.3d 509, 515 (1984), the
state brought an action against defendant convalescent home
seeking civil penalties and injunctive relief under section
17200. Id. The State claimed that Casa Blanca failed to provide
adequate nursing care so as to prevent bedsores and failed to
serve adequate diets. Id. The appellate court found that
plaintiffs properly admitted inspection reports from the
Department of Health Services into evidence and ultimately found
that the practice of providing insufficient personnel was not
only an illegal practice, but also an "unfair practice" under
section 17200. Id. at 530-33. The court emphasized that the
"sweeping language of Health & Safety Code Sections 1430 and 1433
show a legislative intent to authorize the district attorney to
bring a cause of action and seek remedies in whatever form such
remedies might exist." Id. at 532.
Federal courts have also permitted plaintiffs to bring tort
claims under similar circumstances. In Brogdon v. National
Healthcare Corp., 103 F. Supp. 2d 1322, 1333-34 (D. Ga. 2000),
residents of a long-term health care facility filed federal and
state law claims, alleging that defendants failed to provide
basic and minimally required levels of care. The court ruled that
federal law did not preempt Plaintiff's claims and that invoking
the primary jurisdiction doctrine was improper. Id. at 1340-44.
Defendants asserted that the standard of care applied under a
state negligence claim is in "direct conflict" with the
participation requirement that nursing homes provide sufficient
care "to attain or maintain the highest practicable physical,
mental, and psychosocial well-being" of their residents. Id. at
1341 (citing 42 C.F.R. § 483). The court responded:
"While perhaps different, these standards do not pose
mutually exclusive choices for nursing homes that
receive money under the Medicare and Medicaid
programs . . . Indeed, Defendants fail to explain why
a nursing home and its employees cannot comply with
the ordinary standard of due care while striving to
adequately provide for the mental, physical, and
social needs of the residents." Id. The court added that evidence of government
"certification" for the facility could provide some
evidence that Defendants have not breached
Plaintiffs' contracts or violated the applicable
standard of care. Id. Finally, the Brogdon court
also noted that while Georgia provided an
administrative complaint procedure to investigate
complaints regarding care and treatment, plaintiffs'
claims required the "measurement of Defendants'
conduct against the duties imposed by tort law . . .
In other words, Plaintiffs' claims do not arise from
any state administrative proceeding or regulatory
ruling." Id. at 1343.
3. Application of Primary Jurisdiction Doctrine to Present
Under the same reasoning as Brogdon and Casa Blanca, this
Court is unconvinced that the primary jurisdiction doctrine
demands that this Court suspend these proceedings or dismiss
Plaintiffs' claims. First, section 1433 of the Health & Safety
Code states that "no judgment under this chapter shall preclude
any party from obtaining additional relief based on the same
facts." Similar to the Casa Blanca court, this Court finds that
this "sweeping language" allows for plaintiffs to bring claims
under the UCL. Casa Blanca, 159 Cal.App.3d at 532.
Second, the Court does not believe that adjudication of
Plaintiffs' claims in federal court will intrude upon
California's administrative scheme for reviewing complaints
regarding nursing home care or will create any inconsistency. As
stated in Brogdon, this Court will be measuring Defendant's
conduct against the duties imposed by business tort law. See
Brogdon, 103 F. Supp. 2d at 1343. Moreover, abiding by the
regulations and meeting the duty of care are not "mutually
exclusive choices." Id. at 1341. Thus, the CDHS can serve
penalties on the Defendant if it does not adhere to their
standards and this Court can award restitution if Plaintiffs were
misled when purchasing Defendant's services. See Prata v.
Superior Court, 91 Cal.App.4th 1128, 1137 (2001) (discussing
purposes of section 17200).
Third, the Court believes that adjudication of Plaintiffs' tort
claims does not disregard the respective agencies' expertise, but
rather embraces it. In Casa Blanca the court agreed that plaintiffs could properly admit the agency's
inspection reports to support their claims. Casa Blanca
Convalescent Homes, Inc., 159 Cal.App.3d at 533. In Brogdon
the court found government "certification" for the facility could
provide some evidence that there was no breach of contract.
Brogdon, 103 F.Supp. 2d at 1341. Similarly, in this instance,
Plaintiffs will likely be using CDHS reports to support their
claims. Thus, the Court will not be side-stepping the agencies,
but instead will be utilizing their specialization and expertise.
(Complaint ¶¶ 72-76); (Tyler Weaver Decl., Exhibit 1).
Finally, none of Defendant's cited cases to the contrary are
particularly on point. Johnson v. Nyack Hosp., 964 F.2d 116,
122 (2d Cir. 1992) (utilizing the primary jurisdiction doctrine
to defer case involving revocation of doctor's surgical
privileges to agency designed to determine whether there is a
medical justification for such a revocation); In Re Shelby
County Healthcare Servs. Inc. v. U.S., 80 B.R. 555, 562 (N.D.
Ga. 1987) (stating that the primary jurisdiction doctrine places
debtor's claim for Medicare reimbursement properly before the
Department of Health and Human Services); In re Mid-Delta Health
Sys., Inc., 251 B.R. 811 (N.D. Miss. 1999) (suspending and
postponing exercise of jurisdiction pending a determination by
agency regarding Medicare provider reimbursement issues); St.
Mary Hosp. v. U.S., 125 B.R. 422, 432 (E.D. Pa. 1991) (noting
court should intervene in Medicaid appeal process only if
In sum, the primary jurisdiction doctrine is a discretionary
tool that is not appropriate in the present case. This Court can
allow Plaintiffs to bring tort claims against Defendant without
intruding on the agencies' jurisdiction or usurping their
expertise. Accordingly, the Court DENIES Defendant's Motion to
Dismiss on grounds of the primary jurisdiction doctrine.
B. Standing and Proposition 64 in Relation to Plaintiffs'
Defendant further argues that this Court lacks jurisdiction
because Plaintiffs do not have standing to bring a claim
attacking Manor Care's advertising. Specifically, Defendant contends that a recent state enactment created a
"reliance" requirement and Plaintiffs failed to allege such
reliance. Plaintiffs contend both that no "reliance" requirement
exists, and that their allegations would satisfy such a
requirement. Although this Court need not rule on whether the
enactment added a "reliance requirement," the Court FINDS that
even under such a requirement, Plaintiffs have adequately alleged
reliance and maintain standing.
Lack of standing is a threshold issue and constitutes cause for
dismissal at the pleading stage, before any class determination
has been made. O'Shea v. Littleton, 414 U.S. 488, 494 n. 3
(1974). Article III, § 2 of the United States Constitution
restricts federal courts to deciding "cases" and "controversies."
Federal courts must determine at the outset of every case whether
"a party has a sufficient stake in an otherwise justiciable
controversy to obtain judicial resolution of that controversy."
Sierra Club v. Morton, 405 U.S. 727, 731 (1972). "[A]t an
irreducible minimum, Art. III requires the party who invokes the
court's authority to `show that he personally has suffered some
actual or threatened injury as a result of the putatively illegal
conduct of the defendant.'" Valley Forge Christian Coll. v.
Americans United for Separation of Church and State, Inc.,
454 U.S. 464, 472 (1982) (quoting Gladstone, Realtors v. Village of
Bellwood, 441 U.S. 91, 99 (1979); see also Steel Co. v.
Citizens for a Better Env't, 523 U.S. 83, 103 (1998).
Prior to Proposition 64, any person could sue under the UCL in
a "representative" action on behalf of the general public, even
if the plaintiff never had any relationship to the defendant.
See generally, Kraus v. Trinity Mgmt. Servs., Inc.,
23 Cal.4th 116 (2000) (discussing remedies available). Moreover, claimants
could find relief under section 17200 if they proved that members
of the public were likely to be deceived. Committee on
Children's Television v. General Foods, 35 Cal. 3d 197, 211
On November 2, 2004, California voters passed Proposition 64,
entitled "Limits on Private Enforcement of Unfair Business
Competition Laws." The enactment amended the UCL to delete
language that gave any person the right to bring an action for
the benefit of the general public. Cal. Bus. & Prof. Code §§
17203, 17204, 17535. The enactment also added language stating that an action under those sections can be brought by a
private plaintiff (i.e., a non-governmental prosecutor) only if
that plaintiff "has suffered injury in fact and has lost money or
property as a result of [the] unfair competition" or misleading
advertising. Id. Defendant now argues that the new "actual
injury" language requires Plaintiffs to prove that they saw and
relied on the subject advertising to their detriment.*fn1
In Vasquez v. Superior Court, 4 Cal. 3d 800, 814 (1971), the
California Supreme Court stated:
"The rule in California and elsewhere is that it is
not necessary to show reliance upon false
representations by direct evidence. The fact of
reliance upon alleged false representations may be
inferred from the circumstances attending the
transaction which often times afford much stronger
and more satisfactory evidence of the inducement
which prompted the party defrauded to enter into the
contract than his direct testimony to the same
In a later case, the California Supreme Court noted that "an
inference of reliance arises if a material false representation
was made to persons whose acts thereafter were consistent with
reliance upon the representation." Occidental Land, Inc. v.
Superior Court, 18 Cal. 3d 355, 363 (1976) (citing Vasquez).
In Occidental, homeowners in a planned development subdivision
sued as a class against defendant developer for fraudulently
misrepresenting the cost and extent of maintenance of the
development. Id. at 358. Specifically, plaintiffs alleged the
misrepresentations were found in a public subdivision report
produced by the defendant. Id. at 358-59. The court found that
"because the purchases made by plaintiffs were acts consistent
with their reliance on the subdivision report . . . the trial
court did not err in inferring that justifiable reliance may be
established on a common basis." Id. at 363.
Similarly, in the present case, Plaintiffs paid Manor Care for
its services, an act consistent with their reliance on the
various promotional materials cited in the Complaint. (Complaint
¶ 30-34). In fact, Plaintiffs explicitly state that
misrepresentations made in violation of section 17500 "intended
to, and did, induce the purchase of nursing home services here at
issue." (Complaint ¶ 95-96). Therefore, at a minimum, Plaintiffs allege
an inference of reliance sufficient to maintain standing.
C. Standing and Proposition 64 in Relation to Plaintiffs'
Defendant also contends that Plaintiffs lack standing in their
representative claims. (Def.'s Mem. of P. and A. at 20-23.) After
Proposition 64, the UCL now states that private plaintiffs
meeting the "actual injury" standard who also seek to assert
representative claims on behalf of others must comply with the
class action procedural requirements in California Code of Civil
Procedure Section § 382. Cal. Bus. & Prof. Code §§ 17203, 17535.
Section 382 states: ". . . when the question is one of a common
or general interest, of many persons, or when the parties are
numerous, and it is impracticable to bring them all before the
court, one or more may sue for the benefit of all."
California Code of Civil Procedure § 382. In paragraph 78
plaintiffs allege "The members of the class are so numerous that
joinder of all their members would be impractical . . . The class
has at least several hundred members." Therefore, Plaintiffs
adequately allege their representative claims. In sum, this Court
FINDS that Plaintiffs allege an inference of reliance
sufficient to maintain standing and DENIES Defendant's Motion
to Dismiss on the basis of lack of standing.
II. Motion to Dismiss Pursuant to Rule 12(b)(6)
Under Rule 12(b)(6), Defendant moves to dismiss Plaintiffs'
Complaint arguing (1) Plaintiffs failed to prove a violation of
"another law" as required under the UCL and CLRA and (2)
Defendant's alleged misleading statements amount to mere puffery.
For the reasons set forth below, this Court DENIES Defendant's
Motion on both grounds.
A. Requirement to Prove Violations of "Another Law" Under a
UCL or CLRA Claim
Defendant claims that to state a claim under the UCL or the
CLRA, Plaintiffs must establish that there has been an underlying
violation of law. (Def.'s Motion at p. 12). Plaintiffs argue
Defendant has misstated the law and this Court agrees for the
reasons stated below. (Plaintiffs' Opposition at 6.) Section 17200 of the Cal. Bus & Prof. Code states: "unfair
competition shall mean and include any unlawful, unfair or
fraudulent business act or practice and unfair, deceptive, untrue
or misleading advertising and any act prohibited by Chapter 1
(commencing with Section 17500)[.]"
The California Supreme Court has stated:
The statutory language referring to "any unlawful,
unfair or fraudulent" practice makes clear that a
practice may be deemed unfair even if not
specifically proscribed by some other law. "Because . . .
section 17200 is written in the disjunctive, it
establishes three varieties of unfair competition
acts or practices which are unlawful, or unfair, or
fraudulent. `In other words, a practice is prohibited
as "unfair" or "deceptive" even if not "unlawful" and
Cel-Tech Communications, Inc. v. Los Angeles Cellular Tel. Co.,
20 Cal.4th 163
, 180 (1999) (emphasis added); see also State Farm
Fire & Casualty Co. v. Superior Court, 45 Cal. App. 1093, 1103
(1996) (stating that the "unfair" prong of the UCL is
intentionally broad to allow courts the discretion to prohibit
Two alternative tests are used to determine whether a
particular claim is unfair under the UCL. First, the court can
weigh "the utility of the defendants" conduct against the gravity
of the harm to the alleged victim. Motors v. Times-Mirror Co.,
(1980) 102 Cal.App.3d 735, 740. Second, a practice is considered
"unfair" under the UCL if it "offends an established public
policy" or is "substantially injurious to consumers." Casa
Blanca, 159 Cal.App.3d at 530.*fn2
With respect to the present case, a policy of the Nursing Home
Reform Act is "to ensure that nursing home facilities in
California provide safe and secure environments for residents and
their families and that they have the highest quality of care
possible." See 42 C.F.R. § 483.75. Therefore, similar to Casa
Blanca, Plaintiffs can plead that Manor Care acted "unfairly"
under section 17200 by violating such a policy. (Complaint ¶ 88).
Contrary to Defendant's assertions, Plaintiffs do not have to
establish that there was an underlying violation of law under for
their CLRA or UCL claims. Accordingly this Court DENIES Defendant's Motion to Dismiss on the grounds that
Plaintiffs must claim a violation of "another law" under the UCL
B. Puffery as Grounds for Dismissal of Plaintiffs' False
Defendant argues that Plaintiffs fail to state a claim because
the statements made in their promotional materials amount to
nonactionable statements of opinion or "puffery." (Def.'s Mem. of
P. and A. at 16-18.) Plaintiffs disagree and argue that the
statements are factual representations. (Plaintiffs' Opposition
at 15-18.) For the reasons stated below, this Court DENIES the
Motion to Dismiss the false advertising claims on the grounds
Defendant's statements amount to "puffery."
"Puffery" is described as "generalized or exaggerated
statements such that a reasonable consumer would not interpret
the statement as a factual claim upon which he or she could
rely." In re All Terrain Vehicle Litig., 771 F.Supp. 1057, 1061
(C.D. Cal. 1991), aff'd, 979 F.2d 755 (9th Cir. 1992).*fn3
The distinguishing characteristics of puffery are vague,
subjective assertions about the superiority of a product rather
than detailed, factual claims about the characteristics of the
product. Cook, Perkiss, & Liehe, Inc., 911 F.2d at 246. Puffery
is recognized as an insufficient ground for imposing liability
for allegedly false statements. See e.g., Hauter v. Zogarts,
14 Cal. 3d 104, 112 (1975) ("If defendants' assertion . . . is
merely a statement of opinion-mere-`puffing'-they cannot be held
liable for its falsity.").
The Ninth Circuit has set boundaries for which statements
amount to mere puffery and has stated that "misdescriptions of
specific or absolute characteristics of a product are
actionable." Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1145
(9th Cir. 1997) (citing Castrol v. Penzoil Prods. Co.,
987 F.2d 939, 946 (3d Cir. 1993)). In Sod Farms, the court analyzed
false advertisement claims brought under the UCL and the Lanham
Act against makers of turfgrass seed and sod. Id. at 1138. The
court found that Defendant's "less is more" claim was nonactionable puffery, but that claims of "reduced costs,"
"slower growth," and "less mowing" were actionable. Id. at
In Consumer Advocates v. Echostar Satellite Corp.,
113 Cal.App.4th 1351, 1353-54 (2003), plaintiffs brought claims under
the CLRA, the False Advertising Act, and the UCL against
defendants for making false representations about their satellite
service. The court found representations that the system was
"crystal clear" and "CD quality" were akin to "mere puffing"
because no "reasonable consumer would take [the claim] as
anything more weighty than an advertising slogan." Id. at 1361.
In contrast, the court ruled "50 channels" and "7 day schedule"
were considered "factual representations" that created a "triable
issue of fact . . . whether these representations are likely to
deceive a reasonable consumer." Id. at 1362. In so holding, the
court added that plaintiffs did not have to produce a consumer
survey to prevail and that "the falsity of . . . advertising
claims may be established by testing, scientific literature, or
anecdotal evidence." Id. (citing National Council Against
Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc.,
107 Cal.App.4th 1336, 1348). Last, the court concluded, "A perfectly
true statement couched in such a manner that is likely to mislead
or deceive the consumer, such as by failure to disclose other
relevant information, is actionable." Id. (citing Day v. AT&T
Corp., 63 Cal.App.4th 325, 332-333 (1998)).
In the present case, Manor Care's promotional materials contain
at least the following factual representations: (1) "Professional
staff provide physician proscribed comprehensive health care
around the clock for residents who require skilled services"
(Complaint ¶ 32); (2) "Accommodations include . . . [t]hree
delicious homemade meals supervised by a registered dietician" (¶
30); (3) "Our services include . . . individualized care plans to
meet each resident's needs" (¶ 30); (4) "The diverse extent
activities offered range from themed events for holidays and
exciting scheduled entertainment such as singers, musicians, and
comedians to physical diversions including walks, armchair
aerobics, and active games. Sensory and creative programs feature
strolls down memory lane, current events review, spiritual
services, and community outings" (¶ 30); (5) "Every HCR Manor
Care health center employee receives 11 hours of intensive training in guest relations skills that emphasizes
quality care with a personal sense of responsibility." (¶ 31.)
Similar to Consumer Advocates, Plaintiffs cite specific
representations that can be proven true or false, based upon
evidence to be presented at trial. Accordingly, this Court
DENIES Defendant's Motion to Dismiss on the grounds that
Defendant's statements amount to mere puffery.
III. Motion to Strike Injunctive Relief Pursuant to Rule
Under Rule 12(f), Defendant argues this Court should strike
Plaintiffs' requests for injunctive relief due to lack of
standing. Plaintiffs contend this type of relief is available.
For the reasons stated below, this Court STRIKES Plaintiffs'
requests for injunctive relief.
In City of Los Angeles v. Lyons, 461 U.S. 95, 104-105 (1983),
respondent suffered injuries from a police choke-hold and sought
damages for his injuries and injunctive relief to bar the
choke-hold policy. The Court ruled that respondent could pursue
damages for the injuries sustained, but that it was without
jurisdiction to entertain respondent's claim for injunctive
relief because he could not show that he was likely to suffer
future injury. Id. at 105. The Court ruled that to invoke
jurisdiction, respondent was required to show that he was in
immediate danger of irreparable injury and that neither the
existence of past injury nor conjecture over the prospect of some
future injury met the case or controversy requirement. Id. at
102; see also Clark v. City of Lakewood, 259 F.3d 996, 1007
(9th Cir. 2001) ("In the context of injunctive relief, the
plaintiff must demonstrate a real or immediate threat of an
Regarding class actions, the Supreme Court has ruled that the
named plaintiff can only seek relief for conduct that is directly
applicable to him. Blum v. Yarestsky, 457 U.S. 991 (1982)
(trial court lacked jurisdiction to grant class relief for aspect
of defendant's conduct because those activities could not
reasonably affect the class representatives). Finally, under the
UCL, a plaintiff whose cause of action under section 17200 is
"perfectly viable in state court under state law may nonetheless
be foreclosed from litigating the same cause of action in federal
court, if he cannot demonstrate the requisite injury." Lee v.
Am. Nat'l Ins. Co., 260 F.3d 997, 1001-02 (9th Cir. 2001). Plaintiffs request widespread injunctive relief that would
govern aspects of Manor Care's operations in the future.
(Complaint, Prayer for Relief §§ A-C.) The only named plaintiffs,
however, are the estates of two deceased residents. Thus,
Plaintiffs themselves are not capable, actually or
hypothetically, of benefitting from the injunctive relief sought,
and their estates do not have a sufficiently direct interest in
obtaining injunctive relief to satisfy applicable standing
requirements. See also Mixon v. Gray Drug Stores, Inc.
81 F.R.D. 413, 414 (N.D. Ohio 1978) (estate of deceased named
plaintiff cannot maintain class action seeking injunctive relief
because "the estate has no direct interest in obtaining
injunctive relief."). Thus, this Court STRIKES Plaintiffs'
requests for injunctive relief.
IV. Motion to Dismiss Pursuant to Rule 9(b)
Defendant argues that Plaintiffs' false advertising claims
should be dismissed because they fail to satisfy the applicable
pleading requirements of Federal Rule of Civil Procedure 9(b).
Plaintiffs state that Rule 9(b) does not apply to their false
advertising claims and that even if applicable, the Complaint
satisfies the particularity requirements. For the reasons stated
below, the Court DENIES Defendant's Motion to Dismiss on the
grounds of Rule 9(b), but STRIKES paragraphs 90 and 96(b)
A. Relevance of Plaintiffs' Failure to Satisfy Rule 9(b)
Rule 9(b) states that in "all averments of fraud . . ., the
circumstances constituting fraud . . . shall be stated with
particularity." Fed.R.Civ.P. 9(b). However, the Ninth Circuit
has explained that fraud is not an essential element of a claim
under sections 17200 and 17500 and that:
"Where averments of fraud are made in a claim in
which fraud is not an element, an inadequate averment
of fraud does not mean that no claim has been stated.
The proper route is to disregard averments of fraud
not meeting Rule 9(b)'s standard and then ask whether
a claim has been stated."
Vess v. Ciba-Geigy Corp., 317 F.3d 1097
, 1105 (9th Cir. 2003)
(quoting Lone Star Ladies Inv. Club v. Schlotzsky's Inc.,
238 F.3d 363
, 368 (5th Cir. 2001). The Vess court also cited
similar language from the Eighth Circuit:
"The only consequence of a holding that Rule 9(b) is
violated with respect to a § 11 claim would be that
any allegations of fraud would be stripped from the
claim. The allegations of innocent or negligent misrepresentation, which are
at the heart of a § 11 claim, would survive."
Id. (quoting Carlon v. Thaman (In re NationsMart Corp. Sec.
Litig.), 130 F.3d 309, 315 (8th Cir. 1997)).
In the present case, Defendant cites to paragraphs 90 and 96(b)
of the Complaint in arguing that Plaintiffs' false advertising
claims fail to satisfy the requirements of Rule 9(b).
Paragraph 90 states that Manor Care has engaged in a
"fraudulent business act or practice" in violation of section
17200. The Cel-Tech court ruled that a Plaintiff need only
claim an unfair, unlawful, or fraudulent practice to make a
claim under § 17200. See Cel Tech Communications Inc.,
20 Cal.4th at 180; see also supra. Section (II)(A). Plaintiffs
have alleged unfair practices. Therefore, under Cel-Tech,
removing the allegations of fraud in paragraph 90 will not result
in a dismissal of any of Plaintiffs' claims. Id.; Vess,
317 F.3d at 1105.
Paragraph 96(b) falls under the second cause of action for
"False Advertising" and alleges that in violation of section
17500, Defendant circulated advertisements "as a part of a plan
or scheme with the intent, design or purpose not to conform the
facility as advertised." (Complaint ¶ 96(b).) However, in
paragraph 96(a), which also falls under the "False Advertising"
cause of action, Plaintiffs allege that in violation of section
17500, Defendants circulated "statements which were untrue,
deceptive, misleading, or omitted material facts and which were
known, or which by the exercise of reasonable care should have
been known, by Defendants to be untrue, deceptive or
misleading[.]" (Complaint ¶ 96(a)) (emphasis added).
The "reasonable care" language in 9(b) is equivalent to
alleging negligent misrepresentation and thus constitutes
"non-fraudulent" conduct governed only by the ordinary notice
standards of Rule 8(a). See Vess, 317 F.3d at 1105-06.
Therefore, even if paragraph 96(b) is disregarded,
paragraph 96(a) and the false advertising claims still survive.
B. Plaintiffs' Compliance with Rule 9(b)
While removing allegations of fraud found in paragraphs 90 and
96(b) will not dismiss any of plaintiffs claims, Federal Rule of
Procedure Rule 12(f) provides that the court may strike from any
pleading "any . . . redundant, immaterial, impertinent, or
scandalous matter." Fed.R.Civ.P. 12(f); see also Fantasy, Inc., 984 F.2d at 1527
(stating impertinent material "consists of statements that do not
pertain, and are not necessary, to the issues in question").
The Ninth Circuit has stated that Rule 9(b) requires simply
that fraud allegations "be specific enough to give defendants
notice of the particular misconduct," provide "the who, what,
when, where, and how of the misconduct," and allege "what is
false or misleading about a statement and why it is false."
Vess, 317 F.3d at 1104-05.
In paragraph 96(b) of the Complaint, Plaintiffs allege that
Defendants produced their advertisements "as part of a plan or
scheme with the intent . . . not to conform the facility as
advertised." However, the Complaint does not provide the
particulars of when, where, or how the alleged "scheme" occurred
and nothing in the Complaint clearly points to a "scheme" or
intentional conduct that would otherwise be necessary for
alleging fraud. See Vess, 317 F.3d 1097, 1106-07 (holding that
plaintiff failed to satisfy 9(b) when allegations of a fraudulent
conspiracy did not provide when, where, or how the alleged
conspiracy occurred). Therefore, paragraphs 90 and 96(b) are
impertinent under Rule 12(f), but removing these allegations will
not result in a dismissal of any of Plaintiffs' claims.
In sum, this Court STRIKES paragraphs 90 and 96(b) of the
Complaint under Rule 12(f), but DENIES Defendant's Motion to
Dismiss on the grounds of Rule 9(b).
Conclusion and Order
For the reasons stated above, the Court: (1) DENIES
Defendant's Motion to Dismiss under Rule 12(b)(1); (2) DENIES
Defendant's Motion to Dismiss under Rule 12(b)(6); (3) DENIES
Defendant's Motion to Dismiss under Rule 9(b); (4) GRANTS
Defendant's Motion to Strike injunctive relief and STRIKES
paragraphs 90 and 96(b) of the Complaint under Rule 12(f).
IT IS SO ORDERED.
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