Many nursing home operators have been closely watching the litigation between the Pennsylvania Office of Attorney General (“OAG”) and the Golden Living chain of skilled nursing facilities. On March 22, 2017, the Commonwealth Court entered a 48-page Opinion and an Order dismissing the OAG’s case against Golden Gate National Senior Care, LLC and a number of associated legal entities (generally known as “Golden Living”).
In the summer of 2015, the OAG filed a complaint and injunction against the Golden Living entities, and amended the complaint a short time later. The Amended Complaint made allegations sounding in violations of the Unfair Trade Practices and Consumer Protection Law (“UTP-CPL”), breach of contract, and unjust enrichment. The Golden Living entities filed Preliminary Objections seeking to dismiss the Amended Complaint due to a number of legal deficiencies. The OAG voluntarily withdrew its breach of contract claim. Yesterday, the Commonwealth Court issued its decision on the remaining objections.
The OAG’s Amended Complaint generally alleged that the Golden Living entities engaged in unfair and deceptive acts and practices to Pennsylvania consumers and the Commonwealth.
The Commonwealth Court dismissed the OAG’s claim under the UTP-CPL because the alleged statements at issue were mere “puffery” and not actionable. Further, some of the alleged statements appeared in documents not circulated to consumers, and thus were not actionable. The Court also found that the Commonwealth was not a “person” under the UTP-CPL in this case.
The Court also dismissed the OAG’s claim of unjust enrichment. The OAG claimed that the unjust enrichment claim arose out of the Golden Living facilities’ submission of billings to the Pennsylvania Medical Assistance Program. The Commonwealth Court dismissed this claim because there was already a statutory procedure in place to resolve these kinds of disputes. It found that the OAG’s Amended Complaint was trying to “short circuit” the established process.
Finally, the Commonwealth Court found that the OAG had not made sufficient allegations to “pierce the corporate veil” to get to the Golden Living parent entities. The OAG had not pleaded that the parent entities had used the corporate structure to engage in fraud or a similar injustice.
A PDF copy of the Commonwealth Court opinion is available here: http://www.pacourts.us/assets/opinions/Commonwealth/out/336MD15_3-22-17.pdf?cb=1
For additional information contact Danielle Dietrich, or on Twitter at @DLDietrich. Danielle is a long term care and litigation attorney in Tucker Arensberg’s Long Term Care Practice Group. She is licensed to practice law in Pennsylvania, Ohio and West Virginia.