Judge: Gregory Keosian, Case: 22STCV23363, Date: 2023-01-09 Tentative Ruling

Case Number: 22STCV23363    Hearing Date: January 9, 2023    Dept: 61

Defendants Kaiser Foundation Health Plan, Inc. and The Permanente Medical Group Inc.’s Motion to Strike is DENIED.

I.                MOTION TO STRIKE

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)

Defendants Kaiser Foundation Health Plan, Inc. and The Permanente Medical Group Inc. (Defendants) move to strike Plaintiff Ecure CA, LLC’s (Plaintiff) prayer for restitutionary relief under their sixth cause of action for unfair business practices under Business & Professions Code § 17200, on the grounds that Plaintiff seeks not the return of funds given to Defendants, but rather the payment of funds for services rendered, which they contend is not restitutionary in nature and therefore unavailable under the section 17200. (Motion at pp. 3–4.)

California’s Unfair Competition Law (UCL) allows for injunctive relief and restitution, described by statute as a court order “as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.” (Bus. & Prof. Code § 17203.) Defendants argue that restitution within the meaning of the UCL requires either that the money or property involved “was once in the possession” of the person claiming it, or that they have a “vested interest” in the property. (Motion at p. 3, citing People ex rel. Harris v. Aguayo (2017) 11 Cal.App.5th 1150, 1169.) And because Plaintiff does not allege that the physicians whose claims it now brings paid money to Defendants, or had a vested interest in payment from Kaiser, Plaintiff’s prayer for restitution must fail. (Motion at pp. 3–4.)

The authority is against Defendants. The court in a similar case, Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc. (2021) 71 Cal.App.5th 323, 343, expressly recognized that medical providers “may certainly seek restitution for Kaiser's violation of its Knox-Keene Act duty to reimburse them for the ‘reasonable and customary value’ of the emergency medical services they provided to Kaiser enrollees,” and thus that the trial court had erred in dismissing an underlying UCL claim for restitution. Defendants argue that this language was dicta, as the court ultimately determined that the error was harmless because the plaintiffs were allowed to pursue restitution through their quantum meruit claim. (Reply at p. 1.) But the Long Beach court’s language was consistent with prior holdings permitting claims for restitution of statutorily mandated sums for services performed for others, such as wages due under the Labor Code. (See Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 177.) Plaintiff’s allegations with respect to sums owed and belonging to it under the Knox Keene Act are essentially similar to this authority. (FAC ¶ 20.)

The motion to strike is therefore DENIED.