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Cameron Shuts, As Personal Representative, Etc., et al v. Covenant Holdco LLC et al

August 15, 2012


Super. Ct. No. RG10551807 Trial Court: Alameda County Superior Court Trial Judge: Hon. Winifred Younge Smith

The opinion of the court was delivered by: Ruvolo, P. J.


Alameda County


Appellants Cameron Shuts and Gary Sterling represent a putative class of former and current residents of 16 separately licensed skilled nursing facilities that are in the business of providing long-term, 24-hour care for the elderly and disabled (hereafter plaintiffs).*fn2 Respondents are interrelated business entities that own and operate the skilled nursing facilities (hereafter collectively referred to as Covenant).*fn3 Plaintiffs sued Covenant alleging, among other things, that it consistently and intentionally failed to provide adequate nursing staff for its elderly and disabled residents, and that Covenant misrepresented its staffing levels to residents and to the consuming public. Plaintiffs alleged three causes of action in their first amended complaint (FAC): (1) violation of a skilled nursing resident's right to reside in an adequately staffed facility (Health & Saf. Code § 1430, subd. (b));*fn4 (2) violation of California's unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.); and (3) violation of the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.).

Plaintiffs alleged that the inadequacy of the staffing levels at Covenant's facilities was demonstrated by its noncompliance with the statutory mandate that a skilled nursing facility maintain a minimum numeric ratio of 3.2 nursing hours per patient per day (NHPPD). (See § 1276.5, subd. (a).) Covenant filed a demurrer, urging the court to dismiss this dispute because a skilled nursing facility's obligation to provide its residents care at a level of 3.2 NHPPD is not enforceable by a private right of action. It argued that because section 1276.5 is a regulatory statute, it can only be enforced by the California Department of Public Health (CDPH). In addition, Covenant warned that litigating the case would necessarily involve the court in a "regulatory 'thicket' of nursing home staffing regulation[s]" that is best left to administrative expertise. Covenant urged the court to dismiss based on the abstention doctrine. The trial court agreed with both arguments, and dismissed plaintiffs' lawsuit without leave to amend.

In the published portion of this opinion we first conclude that while section 1276.5, subdivision (a), may not create a private right of action, section 1430, subdivision (b) does, thereby allowing plaintiffs to sue under this latter statute for a violation of section 1276.5, subdivision (a). As to the court's invocation of the abstention doctrine, at this stage of the proceedings, it is not clear that adjudicating plaintiffs' claims "would require a trial court to assume the functions of an administrative agency, or to interfere with the functions of an administrative agency. [Citations.]" (Alvarado v. Selma Convalescent Hospital (2007) 153 Cal.App.4th 1292, 1298 (Alvarado).) Even if otherwise appropriate, the FAC contained nonequitable claims for relief, including damages, that are not subject to dismissal under the doctrine of equitable abstention. Therefore, we reverse the demurrer as to plaintiffs' first cause of action seeking relief under section 1430, subdivision (b). In the nonpublished portion of this opinion we likewise reverse the trial court's dismissal of the UCL and CLRA causes of action.


The crux of plaintiffs' FAC was their allegation that Covenant had a "duty under California law to provide sufficient nursing staff and related services." Notwithstanding this duty, plaintiffs claimed that Covenant "persisted in [its] practice of understaffing their skilled nursing facilities throughout the Class Period," which plaintiffs defined as December 15, 2006, through December 16, 2010. Plaintiffs alleged that Covenant's "pattern and practice of systematically understaffing their facilities violates California law . . . ."

As noted, plaintiffs asserted three causes of action. The first cause of action was based on section 1430, subdivision (b), which authorizes a "current or former resident or patient of a skilled nursing facility" to "bring a civil action against the licensee of a facility who violates any rights of the resident or patient as set forth in the Patients Bill of Rights . . . or any other right provided for by federal or state law or regulation." Section 1430, subdivision (b) authorizes statutory damages, attorney fees, and injunctive relief. It provides that "[t]he licensee shall be liable for up to five hundred dollars ($500), and for costs and attorney fees, and may be enjoined from permitting the violation to continue."

Plaintiffs' section 1430, subdivision (b) claim is based on Covenant's alleged violation of several provisions of state law, including the violation of plaintiffs' right to reside in a facility that employs an "adequate number of qualified personnel," as provided in the Skilled Nursing and Immediate Care Facility Patient's Bill of Rights (§ 1599.1, subd. (a); Cal. Code Regs., tit. 22, § 72527, subd. (a)(25)) (Patient's Bill of Rights). Plaintiffs assert that in order to satisfy this obligation, Covenant must provide at least 3.2 NHPPD, the minimum number of actual nursing hours per patient required in a skilled nursing facility.*fn5 (§ 1276.5, subd. (a).) Implementing regulations go on to explain that "[s]killed nursing facilities shall employ and schedule additional staff as needed to ensure quality resident care based on the needs of individual residents to ensure compliance with all relevant state and federal staffing requirements." (Cal. Code Regs., tit. 22, § 72329.1, subd. (a).) The FAC alleged that Covenant failed to "meet the minimum staffing requirements" of 3.2 NHPPD on 35 percent or more days of the purported class period.

The allegations of the first cause of action also supported plaintiffs' second and third causes of action based on violations of the UCL (Bus. & Prof. Code, § 17200 et seq.) and the CLRA (Civ. Code, § 1750 et seq.). As part of these two additional causes of action, plaintiffs claimed that the understaffing was systematically concealed and misrepresented to members of the general public, including plaintiffs and their families.

Plaintiffs purported to bring these claims on behalf of themselves and a putative class comprised of all persons who resided in one of Covenant's facilities for "at least one day during which the respective facility did not provide at least 3.2 hours of direct nursing care per patient day." Plaintiffs sought injunctive relief as well as statutory damages, restitution, and attorney fees. The FAC expressly disclaimed any intention to "seek damages for personal injuries, wrongful death or other resident-specific harm that may have been caused by inadequate staff."

Covenant filed a demurrer. Covenant argued that each cause of action alleged in plaintiffs' lawsuit was premised on a theory of noncompliance with the 3.2 NHPPD standard set out in section 1276.5, subdivision (a)-- a "regulatory statute," which is interpreted, implemented, and enforced solely by the CDPH, and which does not provide a cause of action for aggrieved residents of skilled nursing facilities. (See Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592, 601 (Lu).) Alternatively, Covenant urged the court to dismiss plaintiffs' lawsuit in its entirety based on the doctrine of equitable abstention. This doctrine allows a court to abstain from adjudicating a suit that seeks equitable remedies if "granting the requested relief would require a trial court to assume the functions of an administrative agency, or to interfere with the functions of an administrative agency. [Citations.]" (Alvarado, supra, 153 Cal.App.4th at p. 1298.) Abstention may be appropriate if "the lawsuit involves determining complex economic policy, which is best handled by the Legislature or an administrative agency," or if "granting injunctive relief would be unnecessarily burdensome for the trial court to monitor and enforce given the availability of more effective means of redress. [Citation.]" (Ibid.) Covenant contended that plaintiffs were "asking the Court to step into the shoes of a regulatory agency that already is doing its job conducting surveys, issuing deficiencies and remedying them when appropriate . . . ."

The trial court agreed with Covenant's arguments and dismissed plaintiffs' entire case without leave to amend on both grounds. The court's judgment of dismissal was filed on June 13, 2011. This appeal followed.*fn6

III. Discussion

A. Standard of ...

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