Walsh v. Kindred Healthcare, Inc. et al

Filing 72

ORDER GRANTING 71 REGARDING ALTER EGO DISCOVERY AND PLAINTIFFS' SECOND AMENDED COMPLAINT. Signed by Judge Jeffrey S. White on 11/14/11. (jjoS, COURT STAFF) (Filed on 11/14/2011)

Case3:11-cv-00050-JSW Document71

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Filed11/09/11 Page1 of 5

Robert J. Nelson (State Bar No. 132797)
Lexi J. Hazam (State Bar No. 224457)
Andrew Kingsdale (State Bar No. 255669)
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]

[Additional Counsel Appear on Signature Page]
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,
Plaintiff,

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Case No. 3:11-cv-00050-JSW
STIPULATION AND [PROPOSED]
ORDER REGARDING ALTER EGO
DISCOVERY AND PLAINTIFFS’
SECOND AMENDED COMPLAINT

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
CASE NO. 3:11-cv-00050-JSW

Case3:11-cv-00050-JSW Document71

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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 Parties stipulated, and the Court ordered, that Plaintiffs’ Second Amended

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Complaint would be due ninety (90) days from when Plaintiffs’ Motion for Limited, Expedited

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Discovery was granted, see Order Postponing Deadline for Filing of Amended Complaint and

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Continuing Case Management Conference (Dkt. 64);

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WHEREAS the Court subsequently granted Plaintiffs’ Motion for Limited, Expedited

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Discovery, and therefore the deadline for Plaintiffs to file their Second Amended Complaint is

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November 23, 2011, see Order Regarding Plaintiffs’ Motion for Leave to Conduct Discovery

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(Dkt. 69);

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WHEREAS Plaintiff intend to join, in their Second Amended Complaint, additional class
representatives who resided at Facilities other than Care Center of Rossmoor; and

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WHEREAS the parties have met and conferred about alleged alter ego discovery and the
addition of new Plaintiffs who resided in facilities other than Care Center of Rossmoor;

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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
CASE NO. 3:11-cv-00050-JSW

Case3:11-cv-00050-JSW Document71

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NOW THEREFORE, it is stipulated that:

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1.

Plaintiffs will file their Second Amended Complaint by November 23, 2011;

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2.

Defendants will stipulate to the filing of a Second Amended Complaint that adds

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Plaintiffs who resided in Facilities other than Care Center of Rossmoor. This stipulation is made

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without prejudice to Defendants’ right to raise any appropriate challenge(s) to the Second

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Amended Complaint after it is filed;

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3.

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. Nothing

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in this stipulation will prevent Defendants from challenging Plaintiffs’ vertical or horizontal alter

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ego theories through motion for summary judgment, opposition to class certification or other

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motion that does not merely challenge the legal sufficiency of the allegations in Plaintiffs’ Second

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Amended Complaint or any subsequent complaint;

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4.

If any Defendant or Defendants move to dismiss Plaintiffs’ Second Amended

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Complaint based upon lack of personal jurisdiction, the Parties agree that litigation related to the

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Defendants’ challenge to personal jurisdiction shall be stayed until further notice. 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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5.

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 propounded by Plaintiffs;

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6.

Plaintiffs withdraw their currently pending discovery requests on horizontal and

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

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ninety (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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STIPULATION REGARDING ALTER EGO DISCOVERY
CASE NO. 3:11-cv-00050-JSW

Case3:11-cv-00050-JSW Document71

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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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Dated: November 9, 2011

MANATT, PHELPS & PHILLIPS

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By:

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/s/ Brad W. Seiling
Brad W. Seiling
Attorney 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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Respectfully submitted,

Dated: November 9, 2011

Respectfully submitted,
STEBNER & ASSOCIATES
By:

/s/ Kathryn Ann Stebner
Kathryn Ann Stebner
Attorney 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)
Andrew S. Kingsdale (State Bar No. 255669)
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: [phone]
Facsimile: [phone]

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STIPULATION REGARDING ALTER EGO DISCOVERY
CASE NO. 3:11-cv-00050-JSW

Case3:11-cv-00050-JSW Document71

Filed11/09/11 Page5 of 5

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

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Christopher J. Healey (State Bar No. 105798)
LUCE, FORWARD, HAMILTON & SCRIPPS LLP
600 West Broadway, Suite 2600
San Diego, CA 92101

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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

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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

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Attorneys for Plaintiffs ARLENE BETTENCOURT and
HARRY HARRISON

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Pursuant to General Order 45, Part X-B, the filer attests that concurrence in the
filing of this document has been obtained from Brad W. Seiling and Kathryn Ann Stebner.

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[PROPOSED] ORDER

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PURSUANT TO STIPULATION, IT IS SO ORDERED.

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Dated: November 14, 2011

_________________________________
The Honorable Jeffrey S. White

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946612.1

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STIPULATION REGARDING ALTER EGO DISCOVERY
CASE NO. 3:11-cv-00050-JSW