Walsh v. Kindred Healthcare, Inc. et al

Filing 101

ORDER granting 100 STIPULATION Regarding Alter Ego Discovery and Jurisdictional Challenges Under FRCP 12(B)(2). Signed by Judge JEFFREY S. WHITE on 5/31/12. (jjoS, COURT STAFF) (Filed on 5/31/2012)

Case3:11-cv-00050-JSW Document100 Filed05/29/12 Page1 of 6

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Robert J. Nelson (State Bar No. 132797)
Lexi J. Hazam (State Bar No. 224457)
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
Embarcadero Center West
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: [phone]
Facsimile: [phone]
Michael D. Thamer (State Bar No. 101440)
LAW OFFICES OF MICHAEL D. THAMER
Old Callahan School House
12444 South Highway 3
Post Office Box 1568
Callahan, CA 96014-1568
Telephone: [phone]
Facsimile: [phone]

Kathryn A. Stebner (State Bar No. 121088
Sarah Colby (State Bar No. 194475)
STEBNER & ASSOCIATES
870 Market Street, Suite 1212
San Francisco, CA 94102-2907
Telephone: [phone]
Facsimile: [phone]

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[Additional Counsel Appear on Signature Page]

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Attorneys for Plaintiffs Arlene Bettencourt
and Harry Harrison

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UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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HAZEL WALSH,

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Case No. 3:11-cv-00050-JSW
STIPULATION AND [PROPOSED]
ORDER REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL
CHALLENGES UNDER FRCP 12(b)(2)

Plaintiff,
v.
KINDRED HEALTHCARE, INC., et al.,
Defendants.

The Honorable Jeffrey S. White

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WHEREAS on June 15, 2011 the Court granted in part and denied in part Defendants’

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motions to dismiss Plaintiffs’ First Amended Complaint, and granted Plaintiffs leave to amend

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their Complaint, see Order Regarding Defendants’ Motions to Dismiss (Dkt. 58), at 16;

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WHEREAS with respect to alleged vertical alter ego relationships between the Facility
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STIPULATION REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL CHALLENGES
CASE NO. 3:11-CV-00050-JSW

Case3:11-cv-00050-JSW Document100 Filed05/29/12 Page2 of 6

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Defendants,1 Subsidiary Licensee Defendants,2 and the Parent Kindred Defendants,3 the Court

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held in its June 15, 2011 Order that “Plaintiffs have sufficiently alleged ‘unity of interest and

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ownership’ as between Kindred and the Facilities,” and that Plaintiffs have also sufficiently

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alleged “an injustice based on the parent Kindred entities’ attempt to avoid liability,” id. at 7;

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however, the Court also held that “Plaintiffs have not alleged what injustice would result if the

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Facilities, other than Rossmoor, were not held liable or if Hillhaven and Smith Ranch were not

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held liable,” id. at 7-8;

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WHEREAS the Court subsequently granted Plaintiffs’ motion for leave to conduct

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limited discovery regarding alleged alter ego issues prior to filing a Second Amended Complaint,

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see Order Regarding Plaintiffs’ Motion for Leave to Conduct Discovery (Dkt. 69);
WHEREAS on or about November 14, 2011, the parties entered a stipulation regarding

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litigation concerning personal jurisdiction and alter ego discovery. In particular, the parties

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agreed that Defendants will not move to dismiss Plaintiffs’ Second Amended Complaint based

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upon insufficiency of Plaintiffs’ alter ego allegations as to 1) the vertical alter ego relationships

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between the Facility Defendants, Subsidiary Licensee Defendants, and the Parent Kindred

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Defendants, or 2) the horizontal alter ego relationships between the Facility Defendants, and

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further agreed that if any Defendant or Defendants move to dismiss Plaintiffs’ Second Amended

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Complaint based upon lack of personal jurisdiction, litigation related to the Defendants’ challenge

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to personal jurisdiction would be stayed until further notice;
WHEREAS Plaintiffs filed a Second Amended Complaint, and the Court subsequently

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The thirteen “Facility Defendants” are: Alta Vista Healthcare & Wellness Centre (a/k/a Alta
Vista Healthcare); Bay View Nursing And Rehabilitation Center; Canyonwood Nursing and
Rehab Center; Care Center of Rossmoor (f/k/a Guardian of Rossmoor); Fifth Avenue Health Care
Center; Golden Gate Healthcare Center; Hacienda Care Center; Nineteenth Avenue Healthcare
Center; Kindred Healthcare Center of Orange; Santa Cruz Healthcare Center; Smith Ranch Care
Center (f/k/a Guardian at Smith Ranch Care Center); Valley Gardens Healthcare & Rehabilitation
Center; and Victorian Healthcare Center (f/k/a Hillhaven Victorian).
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The three “Subsidiary Licensee Defendants” are: Care Center of Rossmoor, LLC; Smith
Ranch Care Center, LLC; and Hillhaven-MSC Partnership.
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The four “Kindred Defendants” are: Kindred Healthcare, Inc. (“Kindred Inc.”); Kindred
Healthcare Operating, Inc. (“KHOI”); Kindred Nursing Centers West, LLC (“Kindred West”);
and California Nursing Centers, LLC (“California Nursing”).
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STIPULATION REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL CHALLENGES
CASE NO. 3:11-CV-00050-JSW

Case3:11-cv-00050-JSW Document100 Filed05/29/12 Page3 of 6

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granted Defendants’ motion to dismiss the Consumer Legal Remedies Act (“CLRA”) claim

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WHEREAS Plaintiffs filed a Third Amended Complaint, and Defendants Fifth Avenue

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Health Care, Care Center of Rossmoor, L.L.C. fka Guardian of Rossmoor, Bay View Nursing and

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Rehabilitation Center, Hacienda Care Center, Valley Gardens Healthcare and Rehabilitation

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Center, Kindred Healthcare Center of Orange, Canyonwood Nursing and Rehab Center, Santa

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Cruz Healthcare Center, Alta Vista Healthcare & Wellness Centre aka Alta Vista Healthcare, and

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Smith Ranch Care Center have filed a motion to dismiss the CLRA claim pursuant to Rule

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12(b)(6) of the Federal Rules of Civil Procedure, and Defendant Kindred Healthcare, Inc. filed a

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motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2);

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WHEREAS the hearing on the motions to dismiss currently is set for August 24, 2012;

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WHEREAS the parties have agreed to extend their stipulation regarding personal

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jurisdiction challenges and alter ego discovery to avoid litigation over these issues at this time;

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NOW THEREFORE, it is stipulated that:

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1.

All briefing and discovery related to Defendant Kindred Healthcare, Inc.’s motion

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to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) is stayed. If any Party

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wishes to lift the stay, it may move the Court for such relief after providing all other Parties with

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fourteen (14) days written notice;

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2.

If any Party moves to lift the stay on litigation of personal jurisdiction, then

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Plaintiffs will have ninety (90) days from the date the stay is lifted to conduct jurisdictional

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discovery, including on alter ego issues, before filing their opposition brief. This agreement is

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without prejudice to Defendants’ ability to challenge the scope of such discovery, including the

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alter ego discovery previously propounded by Plaintiffs;

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3.

Nothing in this stipulation will prevent Defendants from challenging Plaintiffs’

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vertical or horizontal alter ego theories through motion for summary judgment, opposition to

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class certification or other motion that does not merely challenge the legal sufficiency of the

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allegations in Plaintiffs’ Third Amended Complaint or any subsequent complaint;

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STIPULATION REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL CHALLENGES
CASE NO. 3:11-CV-00050-JSW

Case3:11-cv-00050-JSW Document100 Filed05/29/12 Page4 of 6

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4.

This stipulation regarding litigation related to personal jurisdiction and alter ego

issues applies to any subsequent complaint filed in this action;
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Plaintiffs previously have withdrawn discovery requests on horizontal and vertical

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relationships among Defendants, without prejudice to their right to reassert the requests ninety

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(90) days prior to the close of fact discovery, or if and when any of the following occur:

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a.

The Court sets a schedule for class certification briefing; or

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b.

Any Defendant moves to lift the stay on personal jurisdiction; or

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c.

Any Defendant moves for summary judgment based in whole or part on the

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insufficiency of Plaintiffs’ alter ego, agency, or joint venture allegations.
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Nothing stated herein shall preclude any Party from seeking a Court-ordered

modification of the above-stated provisions for good cause shown.
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Defendants’ motion to dismiss the CLRA claim pursuant to Rule 12(b)(6) of the

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Federal Rules of Civil Procedure will remain on calendar. Plaintiffs’ opposition brief will be due

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on June 12, 2012. Defendants’ reply brief will be due on June 26, 2012.

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Dated: May 29, 2012

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Respectfully submitted,
MANATT, PHELPS & PHILLIPS
By: /s/ Brad W. Seiling
Brad W. Seiling
Attorneys for Defendants
Brad W. Seiling (State Bar No. 143515)
Andrew H. Struve (State Bar No. 200803)
Jessica L. Slusser (State Bar No. 217307)
Justin C. Johnson (State Bar No. 252175)
11355 West Olympic Boulevard
Los Angeles, CA 90064-1614
Telephone: [phone]
Facsimile: [phone]

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STIPULATION REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL CHALLENGES
CASE NO. 3:11-CV-00050-JSW

Case3:11-cv-00050-JSW Document100 Filed05/29/12 Page5 of 6

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Dated: May 29, 2012

Respectfully submitted,
STEBNER & ASSOCIATES
By: /s/ Kathryn Ann Stebner
Kathryn Ann Stebner
Attorneys for Plaintiffs
Kathryn A. Stebner (State Bar No. 121088)
Sarah Colby (State Bar No. 194475)
870 Market Street, Suite 1212
San Francisco, CA 94102
Telephone: [phone]
Facsimile: [phone]
Robert J. Nelson (State Bar No. 132797)
Lexi J. Hazam (State Bar No. 224457)
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: [phone]
Facsimile: [phone]
Michael D. Thamer (State Bar No. 101440)
LAW OFFICES OF MICHAEL D. THAMER
Old Callahan School House
12444 South Highway 3; Post Office Box 1568
Callahan, CA 96014-5307
Christopher J. Healey (State Bar No. 105798)
LUCE, FORWARD, HAMILTON & SCRIPPS LLP
600 West Broadway, Suite 2600
San Diego, CA 92101
W. Timothy Needham (State Bar No. 96542)
Michael J. Crowley (State Bar No. 102343)
JANSSEN, MALLOY, NEEDHAM, MORRISON,
REINHOLTSEN & CROWLEY, LLP
730 Fifth Street
Eureka, CA 95501
Robert S. Arns (State Bar No. 65071)
Steven R. Weinmann (State Bar No. 190956)
THE ARNS LAW FIRM
515 Folsom Street, 3rd Floor
San Francisco, CA 94105
Attorneys for Plaintiffs ARLENE BETTENCOURT and
HARRY HARRISON

Filer’s Attestation: Pursuant to General Order No. 45, Section X(B) regarding signatures, Brad
W. Seiling hereby attests that concurrence in the filing of this document has been obtained.
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STIPULATION REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL CHALLENGES
CASE NO. 3:11-CV-00050-JSW

Case3:11-cv-00050-JSW Document100 Filed05/29/12 Page6 of 6
The parties are admonished to show good cause for any future requests for extensions.
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PURSUANT TO STIPULATION, IT IS SO ORDERED.

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Dated: May 31, 2012

_________________________________
The Honorable Jeffrey S. White

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STIPULATION REGARDING ALTER EGO
DISCOVERY AND JURISDICTIONAL CHALLENGES
CASE NO. 3:11-CV-00050-JSW