Judge: H. Jay Ford, III, Case: 20SMCV00941, Date: 2024-05-28 Tentative Ruling

Case Number: 20SMCV00941    Hearing Date: May 28, 2024    Dept: O

   Case Name:  C.D., et al. v. BNI Treatment Centers, LLC, et al.

SUBJECT:               MOTION FOR JUDGMENT ON THE PLEADINGS

MOVING PARTY:  Defendant BNI Treatment Centers, LLC

RESP. PARTY:        Plaintiff C.D., a minor, by and through his guardian ad lite, Joshua Deighton

TENTATIVE RULING

Defendants’ motion for judgment on the pleadings is GRANTED as to Plaintiff’s causes of action for Unjust Enrichment, and violation of the Ralph Act, and Unruh Act and DENIED as to Plaintiff’s claims under the Consumer Legal Remedy Act (“CLRA”), False Advertising Law (“FAL”), Unfair Competition Law (“UCL”), and Bane Act).

REASONING

Defendant moves for judgment on the pleadings on Plaintiffs’ FAC on the grounds that the first cause of action for violations of the Consumer Legal Remedies Act, violations of the false advertising law, violations of the unfair competition law, unjust enrichment, violations of the Bane Act, violations of the Ralph act, and violations of the Unruh act all fail to state facts sufficient to constitute a cause of action against Defendant.

In opposition, Plaintiff argues the motion should be denied as to four of the seven causes of action challenged in the motion (the Consumer Legal Remedy Act (“CLRA”), False Advertising Law (“FAL”), Unfair Competition Law (“UCL”), and Bane Act) and concedes to Defendant’s motion as to the Unjust Enrichment, Ralph Act, and Unruh Act claims.

I.                   Consumer Legal Remedies Act (CLRA)

Defendant asserts that Plaintiff failed to plead the CLRA cause of action with the required particularity, as the services involved must be non-commercial and related to the sale or repair of goods, which Plaintiff did not sufficiently demonstrate.  Specifically, Defendant claims there was no specific misrepresentation by Defendant about the product’s characteristics or quality, and health care services in question do not fall under the CLRA.

In opposition, Plaintiff contends that the CLRA applies to the services provided by Defendant, which involve residential and behavioral health treatment services.  Plaintiff asserts that Defendant made misrepresentations about its experience and expertise in treating and stabilizing children with Autism Spectrum Disorder (ASD).  Plaintiff argues that the CLRA covers health care services and that Defendant’s services meet the definition of “services” under the CLRA.  (See Opp. p. 4-6.)  Plaintiff also claims economic loss from Defendant’s misrepresentations, including substantial payments for the Defendant’s services.

In reply, Defendant argues that the FAC fails to support the business-related claims. Specifically, Defendant asserts that Plaintiff has misrepresented Defendant’s position by citing cases related to billing practices of healthcare providers (Hale v. Sharp Healthcare (2010) 183 Cal. App. 4th 1373, Moran v. Prime Healthcare Mgmt., Inc., (2016) 3 Cal. App. 5th 1131, and Sarun v. Dignity Health (2014) 232 Cal. App. 4th 1159) and an admission agreement practice (Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632).  Defendant argues that these cases pertain to widespread business practices, whereas Plaintiff’s claims focus on alleged misrepresentations made to his parents about the services provided, which does not constitute a widespread business practice. Defendant contends that the claims in Winans v. Emeritus Corporation, 2014 WL970177 involved widespread understaffing, which is not applicable here since the plaintiff only alleges that his parents were told BNI was experienced in treating his condition.

The Court finds that Defendant fails to provide any authority to demonstrate that Plaintiff is barred from bringing a CLRA claim based on health care services.  Defendant relies on Fairbanks v. Superior Court (2009) 46 Cal. 4th 56, which held that life insurance is not a service under the CLRA.  There, the court reasoned that life insurance did not fit the definition of “services” as it was a “contract of indemnity,” and an insurer’s obligation to pay money under a life insurance policy is not considered work or labor.  In contrast, here, Defendant provided Plaintiff with the work and labor of its staff in treating and caring for him, which falls under the definition of services covered by the CLRA, that is “work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.”  (Civil Code § 1761(b).)  Plaintiff also provides case law that supports his position. In Hale, the court reversed a demurrer to a CLRA claim brought by a patient against a hospital for “deceptively and unfairly charging her and other uninsured patients fees for medical services” that were substantially higher than those accepted from insured patients.  (Hale, supra, 183 Cal.App.4th at 1387-88.)  Similarly, in Moran, the court held that a patient who received medical treatment at a hospital’s emergency room stated a valid CLRA claim against the hospital’s owners and operators.  (Moran, supra, 3 Cal. App. 5th at 1137.)  Additionally, in Sarun, the court reversed a demurrer to a CLRA claim brought against hospital owners and operators by a patient who received emergency healthcare services.  (Sarun, supra, 232 Cal. App. 4th at 1170.)  Finally, in Podolsky, the court reversed summary judgment against plaintiffs on their CLRA claim against a nursing home chain.  (Podolsky, supra, 50 Cal.App.4th at 654-55.)  These cases demonstrate that the CLRA may cover healthcare services, and that Defendant’s services similarly may be subject to CLRA protections.

Thus, the Court DENIES Defendant’s Motion for Judgment on the pleadings as to the CLRA claim.

II.                False Advertising

Defendant contends Plaintiff’s claim for false advertising is too vague and lacks specific misleading statements.  Defendant states that Plaintiff must describe a scheme to mislead and explain how each misrepresentation fits this scheme, which was not done.  Defendant asserts that the allegations about Defendant’s expertise are opinions and not false advertising.

In opposition, Plaintiff maintains that the FAC clearly alleges misleading statements made by Defendant regarding its expertise in treating ASD.  Plaintiff describes a scheme by Defendant to mislead customers for financial gain, which he claims is sufficient to state a cause of action under the false advertising law.

In reply, Defendant asserts that these statements Plaintiff relies on are not sufficient to support claims of false advertising.  Defendant claims that Plaintiff’s interpretation of “experienced” does not equate to false advertising, and the vague statement does not constitute an act of unfair competition.  

Here, the FAC alleges that Defendant BNI staff told C.D.’s parents that “BNI had experience and expertise in stabilizing children with Autism Spectrum Disorder, including children whose conditions manifested similarly to C.D.”  (FAC ¶ 15.)  The FAC also states that “BNI did not practice Applied Behavior Analysis (ABA), which is the only evidence-based treatment for Autism” (FAC ¶ 19); that “BNI staff did not have any specialized training in dealing with children with Autism,” including a lack of Board Certified Behavior Analysts (BCBAs) (FAC ¶ 20); that “BNI had not previously had a resident on the autism spectrum that presented like C.D.” (FAC ¶ 21); and that BNI “focused on expectation setting, which is inappropriate for certain types of non-neurotypical children, like C.D.”  (FAC ¶ 22).  The Court finds that these allegations are sufficient to show that Defendant misrepresented its capability and experience in treating children with ASD.  The Court also finds that the FAC describes a scheme to mislead customers by alleging that multiple BNI staff members, including "Mr. Jewell and other staff," represented to C.D.’s parents that BNI had the experience and expertise to stabilize children with ASD.  (FAC ¶ 15.)  This was after the parents emphasized the importance of such experience to Jewell.  (FAC ¶ 16.)  The FAC further alleges that BNI misled the plaintiff for financial gain to keep its beds full.  (FAC ¶¶ 44-45.)  The Court finds these allegations to be sufficient to allege a cause of action for false advertising.

Thus, the Court DENIES Defendant’s Motion for Judgment on the pleadings as to the False Advertising claim.

III.             Unfair Competition

Defendant argues that Plaintiff lacks standing under Proposition 64, which requires class certification for such claims for unfair competition.  Furthermore, Plaintiff did not state facts with the required particularity and failed to establish a pattern of conduct, as unfair competition claims require more than a single transaction; they need a pattern or ongoing conduct.

In opposition, Plaintiff argues that he has standing because he suffered an injury and lost money due to Defendant’s unfair business practices.  Plaintiff disputes Defendant’s assertion that a pattern of conduct is required, citing Stop Youth Addiction v. Lucky Stores, Inc. (1998) 17 Cal.4th 554, which he claims expanded the definition of unfair competition.  Plaintiff also contends that he does not need to meet the class action requirements since he is seeking relief for direct harm to himself, not on behalf of others.

In reply, Defendant asserts that the unfair allegations fail to state a claim against it as no practice has actually been stated to have been competitive.  Defendant emphasizes that Plaintiff’s claims are based on his subjective interpretation of what BNI’s experience should entail, rather than on any specific false statements or widespread business practices.

The Court finds that the FAC sufficiently states a cause of action for unfair competition.  As discussed above, the FAC provides facts demonstrating Defendant’s acts, conduct, and practices which Plaintiff alleges are unfair through Defendant’s allegedly deceptive and misleading misrepresentations. The Court notes that Plaintiff need not establish a pattern of conduct as supported byStop Youth Addiction, Inc., where the court there explained that the legislature amended the UCL to expand the scope to cover individual acts, and not just patterns of behavior.  The Court also finds that Plaintiff has standing as he, through his parents lost money as a result of the unfair competition, given that they paid Defendant more than $280,000 for services (FAC ¶ 39) and will need to continue paying for ongoing mental health treatment due to the defendant’s misleading business practices.  (FAC ¶ 148.)  This is sufficient to show that Plaintiff

Thus, the Court DENIES Defendant’s Motion for Judgment on the pleadings as to the Unfair Competition claim.

IV.             Unjust Enrichment

Plaintiff concedes to Defendant’s motion regarding the unjust enrichment cause of action, acknowledging that restitution can be obtained through other claims. The Court GRANTS Defendant’s motion for judgment on the pleadings as to the unjust enrichment claim.

V.                Discrimination: Bane Act, Ralph Act, Unruh Act

Defendant addresses the discrimination causes of action stating that Plaintiff fails to show intentional interference with rights by threats or coercion under the Bane Act as the alleged threats are not sufficiently specific. Also, under the Ralph Act, Defendant claims that Plaintiff did not demonstrate that threats were motivated by his medical condition or that any real threats of violence occurred. Finally, Defendant asserts that the Unruh Act claim does not pertain to accommodations and lacks evidence that Defendant’s conduct was motivated by Plaintiff’s protected status.

Plaintiff concedes to Defendant’s motion regarding the Ralph Act and Unruh Act causes of action. 

For the Bane Act cause of action, Plaintiff argues that Defendant’s staff subjected him to repeated, humiliating strip searches, which interfered with his legal rights through intimidation and coercion. Plaintiff emphasizes that the Bane Act does not require proof of discriminatory intent and that the strip searches were conducted in a coercive environment, violating his rights under California law.

In reply, as to the Bane Act claim, Defendant argues that the FAC fails to demonstrate that Plaintiff was subjected to threats, intimidation, or coercion necessary to support this claim. Defendant states that Plaintiff’s allegations of “bullying” and “antagonizing” are too vague and non-specific to meet the requirements of the Bane Act. Defendant notes that Plaintiff’s cited cases involving strip searches of arrestees or inmates do not apply, as those cases address Fourth Amendment rights and do not establish that strip searches are inherently unreasonable. Defendant states that the Bane Act requires evidence of threats, intimidation, or coercion, which the FAC does not provide. Thus, Defendant concludes that Plaintiff’s claims should be dismissed.

            The Court finds that Plaintiff sufficiently alleges a claim under the Bane Act.  The Bane Act imposes liability if a person interferes by threat, intimidation, or coercion with the exercise or enjoyment of rights secured by the Constitution or laws of the United States or California.  (Cal. Civ. Code § 52.1(b).)  The FAC states that “BNI staff threatened, screamed at, and intimidated C.D. They repeatedly and excessively strip-searched him against his will. They failed to provide Plaintiff with a tolerable environment and damaged him so badly that he remains in an out of state facility that is helping him work through his trauma.”  (FAC ¶ 2.)  The FAC describes a coercive and intimidating environment created by Defendant, which compelled Plaintiff to comply with the strip searches against his will.  The FAC alleges that Plaintiff is a disabled young teenager with ASD, who was away from the comfort of his home and parental protection, in a residential facility where staff bullied, antagonized, and needlessly called the police on him.  (FAC ¶¶ 8, 29, 34, 35.)  This is sufficient to allege a claim under the Bane Act.

Thus, the Court GRANTS Defendant’s motion for judgment on the pleadings as to the Ralph Act and Unruh Act causes of action and DENIES Defendant’s motion as to the Bane Act.