Medhealth Nursing et al v. California Department of Public Health et al

Filing 81

ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT by Judge Claudia Wilken. Pretrial Conference set for 5/15/2018 02:30 PM. (Attachments: # 1 Certificate/Proof of Service) (dtmS, COURT STAFF) (Filed on 3/6/2018)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 DANILO MALLARI, 5 Plaintiff, 6 7 Case No. 13-cv-04038-CW ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT v. TRACY VESSIGAULT, et al., (Dkt. No. 73) 8 Defendants. United States District Court Northern District of California 9 10 Plaintiff Danilo Mallari sues under 42 U.S.C. § 1983. On 11 December 4, 2017, Defendants Tracy Vessigault, Diana Marana, 12 Doris Jordan, and Collene Traynor brought this motion for summary 13 judgment on Mallari’s claims. 14 Defendants filed a reply. 15 Defendants’ motion for summary judgment and ORDERS supplemental 16 briefing. Mallari filed an opposition and The Court hereby DEFERS RULING on 17 FACTUAL BACKGROUND 18 On April 7, 2003, Mallari established Medhealth Nursing, 19 LLC, with himself as the sole member. 20 (SAC) at 9. 21 from the California Department of Public Health (CDPH) to operate 22 a home health agency and to be accredited as a Medicare provider 23 of medical services. 24 account and rented an office in San Leandro on behalf of 25 Medhealth. 26 Second Amended Complaint The purpose of Medhealth was to obtain a license Id. Mallari opened a Citibank checking Id. On May 1, 2008, Mallari applied on behalf of Medhealth for a 27 license to operate a home health agency (HHA license). 28 A. Mallari made the required payment of $3,867.14. SAC, Ex. Id. On April 5, 2009, the CDPH denied his application. 2 the denial. 3 letter to the CDPH requesting a hearing to contest the denial; 4 the CDPH never held a hearing or resolved his appeal. 5 February 17, 2010, Mallari sent another letter to CDPH asking it 6 to either reverse the denial decision or to affirm it and refund 7 the $3,867.14 application fee. 8 9, 2010, Mallari reapplied and paid an additional $5,021.86 as a 9 United States District Court Northern District of California 1 license fee. SAC, Ex. B. SAC at 3-4. Mallari appealed On April 30, 2009, Mallari sent a SAC, Ex. C. Id. On Eventually, on July The CDPH issued Medhealth an HHA 10 license to operate at 318 Westlake Center, Suite 220, Daly City, 11 California 94015 from March 9, 2011 to September 8, 2011. 12 Ex. E at 1; Declaration of Collen Traynor (Traynor Decl.) ¶ 3. 13 Medhealth appears to have received another HHA license effective 14 September 9, 2011 to March 8, 2012. 15 February 16, 2012, Mallari sent a letter to the CDPH stating that 16 Medhealth’s license would expire on March 9, 2012 and requesting 17 assistance with the renewal of the license. 18 claims that he received no response to his letter. 19 Apparently, the CDPH changed its office location during this 20 time. 21 change in office location, nor did he receive forty-five days’ 22 notice of the expiration of his license and an application for 23 renewal, as required by 22 C.C.R. § 74671(d). 24 Medhealth’s HHA license expired on March 8, 2012 and Medhealth 25 closed shop. 26 Id. SAC, Ex. E at 2. SAC, On SAC, Ex. F. Mallari SAC at 4. Mallari claims he never received notice of the CDPH’s Id. As a result, Id. at 4-5. On May 3, 2012, Mallari sent another letter to CDPH stating 27 that Medhealth had moved to 433 Callan Avenue, Suite 206, San 28 Leandro. Traynor Decl. ¶ 4; Mallari and his wife Carmelita (Ms. 2 Mallari), Director of Patient Care Services for Medhealth, went 2 to the office in an attempt to resolve the issue. 3 also Declaration of Carmelita Mallari (Mallari Decl.) ¶ 5. 4 Mallari asserts that Defendants showed dislike and arrogance 5 towards the Mallaris and that they engaged in a “heated exchange 6 of unsavory remarks.” 7 license renewal fee of $4996.86 plus a fee of twenty-five dollars 8 for the location change. 9 United States District Court Northern District of California 1 and D-2. Mallari Decl. ¶ 5. Id. at 11; see Ms. Ms. Mallari paid a Id.; see also Docket No. 76, Exs. D-1 Ms. Mallari asserts she provided the necessary 10 documentation and answered all of Defendants’ questions regarding 11 Medhealth’s operations. 12 Mallari Decl. ¶ 6. On August 7, 2012, the CDPH notified Medhealth that its HHA 13 license was revoked. 14 Medhealth’s license was revoked because it was out of compliance 15 with multiple regulations related to the operation of an HHA. 16 Id. ¶ 7. 17 CDPH called her on August 28, 2012 to tell her to submit a plan 18 of corrections for the issuance of Medhealth’s HHA license. 19 Mallari Decl. ¶ 7. 20 however, Medhealth did not hear anything back from the CDPH. 21 Traynor Decl. ¶ 8. Defendants assert that Ms. Mallari alleges that Defendant Diana Marana of the Ms. Mallari did so on September 4, 2012; Id. On May 23, 2013, Medhealth and Mallari filed this case in 22 Alameda County superior court. 23 2013, Defendants removed the case to federal court. 24 September 9, 2013, Defendants brought a motion to dismiss the 25 First Amended Complaint (FAC). 26 2014, the Court granted Defendants’ motion, dismissing all of 27 Mallari’s claims for failure to identify a specific civil rights 28 injury and Medhealth’s claim for failure to identify any Docket No. 1. Docket No. 8. 3 On August 30, Id. On On February 26, violation of its federal rights. 2 amend. 3 Medhealth may only file a Second Amended Complaint (SAC) through 4 licensed counsel. 5 SAC asserting claims for a violation of § 1983, intentional 6 infliction of emotional distress, negligence, and a violation of 7 title 22, section 74669 of the California Code of Regulations. 8 Docket No. 32. 9 United States District Court Northern District of California 1 34. Docket No. 28 at 7-8. Id. at 8. The Court granted leave to The Court also ruled that On March 17, 2014, Mallari filed a Defendants again moved to dismiss. Docket No. The Court dismissed Mallari’s § 1983 claim for failure to 10 allege that he was “injured directly and independently of 11 Medhealth.” 12 claims for intentional infliction of emotional distress and 13 negligence for failure to allege sufficient facts to state a 14 claim. 15 violation of section 74669 because he did not establish that the 16 section provides for a private cause of action. 17 Because Mallari failed to correct the deficiencies of his 18 complaint after being granted leave to amend, the Court dismissed 19 his complaint with prejudice. 20 Docket No. 43 at 7. Id. at 8. The Court dismissed Mallari’s The Court dismissed Mallari’s claim for a Id. at 10. Id. at 9. Mallari appealed. The Ninth Circuit affirmed this Court’s dismissal of 21 Mallari’s negligence and intentional infliction of emotional 22 distress claims. 23 Court’s dismissal of Mallari’s § 1983 claim for lack of standing, 24 however, the Ninth Circuit reversed, holding that Mallari 25 adequately alleged that “defendants’ conduct violated his own 26 Fourteenth Amendment rights.” 27 and remanded with respect to Mallari’s § 1983 claim only. 28 3. Docket No. 51 at 2. Id. 4 With respect to this The Ninth Circuit reversed Id. at In the operative SAC, Mallari asserts a claim under 42 2 U.S.C. § 1983 alleging that Defendants violated his rights to due 3 process and equal protection guaranteed by the Fourteenth 4 Amendment. 5 did not follow the required procedure for reviewing and granting 6 licenses. 7 renewal fees, as well as additional alleged actual and 8 compensatory damages, expectation and consequential damages, 9 United States District Court Northern District of California 1 punitive damages, and attorneys’ fees and costs. His claim is based on the allegation that Defendants Mallari seeks the return of his application and 10 LEGAL STANDARD 11 Summary judgment is appropriate only where the moving party 12 demonstrates there is no genuine dispute as to any material fact 13 such that judgment as a matter of law is warranted. 14 P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 15 Material facts are those that might affect the outcome of the 16 case, as defined by the framework of the underlying substantive 17 law. 18 A dispute is genuine if the evidence is such that a reasonable 19 jury could return a verdict for either party. 20 Fed. R. Civ. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Id. The moving party bears the initial burden of informing the 21 district court of the basis for its motion and identifying those 22 portions of the pleadings, discovery, and affidavits that 23 demonstrate the absence of a disputed issue of material fact. 24 Celotex, 477 U.S. at 323. 25 party may not rely merely on the allegations or denials in its 26 pleadings, but must set forth “specific facts showing that there 27 is a genuine issue for trial.” 28 Fed. R. Civ. P. 56(e)). In opposing the motion, the non-moving Anderson, 477 U.S. at 248 (citing The court must construe the evidence in 5 1 the light most favorable to the non-moving party, making all 2 reasonable inferences that can be drawn. 3 Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Intel 4 Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th 5 Cir. 1991); Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1289 6 (9th Cir. 1987). 7 8 United States District Court Northern District of California 9 Matsushita Elec. Indus. DISCUSSION I. Standing Defendants contend that Mallari lacks standing to bring his 10 § 1983 claim. 11 Specifically, the Ninth Circuit reversed this Court’s dismissal 12 of Mallari’s § 1983 claim for failure to allege that he was 13 injured directly and independently of Medhealth. 14 Circuit noted: 15 16 17 18 19 20 21 The Ninth Circuit addressed this issue. The Ninth However, in the Second Amended Complaint, Mallari alleged that defendants' conduct violated his own Fourteenth Amendment rights. RK Ventures, Inc. v. City of Seattle, 307 F.3d 1045, 1057 (9th Cir. 2002) (shareholders of corporation alleged personal injury sufficient to confer § 1983 standing because they alleged violations of their own Fourteenth Amendment rights); Soranno's Gasco, Inc. v. Morgan, 874 F.2d 1310, 1318-19 (9th Cir. 1989) (shareholder of corporation had § 1983 standing to bring First Amendment claim because the right that was allegedly violated belonged to the shareholder). In RK Ventures, Inc., the Ninth Circuit provided the rule 22 for shareholders’ standing for § 1983 claims involving their 23 corporations. 307 F.3d at 1057. Generally, “shareholders lack 24 standing to assert an individual § 1983 claim based on harm to 25 the corporation in which they own shares.” Id. “A shareholder 26 does have standing, however, when he or she has been ‘injured 27 directly and independently from the corporation.’” 28 6 Id. The 1 shareholder must suffer injuries that are personal and distinct 2 from those suffered by the corporation. 3 Id. In RK Ventures, Inc., the two principal owners of a nightclub asserted that a Seattle ordinance restricted their 5 personal ability to play rap and hip hop music and to associate 6 with African-Americans, as well as the nightclub’s ability to do 7 the same. 8 was sufficient to show they had personal standing to claim that 9 United States District Court Northern District of California 4 the ordinance violated their First and Fourteenth Amendment 10 rights. 11 Id. at 1054, 1057. The Ninth Circuit held that this Id. at 1057. Soranno’s Gasco, Inc. v. Morgan, 874 F.2d 1310 (9th Cir. 12 1989) presents another example of how § 1983 standing is applied 13 to owners of a company. 14 and officers of Soranno’s Gasco, Inc. (Gasco). 15 They alleged that the Air Pollution Control District violated 16 their First Amendment rights when it suspended Gasco’s petroleum 17 bulk plant permits and discouraged customers from doing business 18 with Gasco in retaliation for Mr. Soranno’s public criticism of 19 the district’s policies. 20 plaintiffs’ argument that the defendants’ actions were taken in 21 retaliation for Soranno's exercise of first amendment rights 22 clearly alleges a direct and independent personal wrong.” 23 1318. 24 those rights.” 25 The Sorannos were the sole shareholders Id. Id. at 1312. The Ninth Circuit held that “the Id. at Mr. Soranno had standing “to contest the deprivation of Id. at 1319. The thrust of Defendants’ argument is that it was Medhealth 26 and not Mallari which applied for the license and paid all the 27 application fees. 28 suffered a due process violation and not Mallari. Motion at 6. Thus, it was Medhealth who 7 As a result, 1 Defendants state that “it is difficult to imagine any claim for 2 damages except for those suffered by Medhealth, if any.” 3 Id. As the Ninth Circuit stated, however, this is not the only injury that Mallari alleges to have suffered. 5 at 2-3. 6 neutral laws regarding the issuance of an HHA license in a 7 discriminatory manner against him. 8 he alleges that he was singled out by Defendants who “cancel[led] 9 United States District Court Northern District of California 4 his business license without valid reasons.” See Docket No. 51 Mallari contends that Defendants applied facially Opp. at 9-10. Specifically, SAC at 7. Mallari 10 posits several reasons for Defendants’ unfair treatment. 11 For example, he states that Defendants discriminated against him 12 because of “his candidness to argue his points whenever he is 13 right,” which could be construed to allege a violation of the 14 First Amendment. 15 Defendants discriminated against him based on the basis of “race, 16 national origin, or alienage,” which would constitute a violation 17 of the Fourteenth Amendment. 18 arrived from the Philippines in 2006. 19 Id. Id. Additionally, his complaint suggests that Id. at 6-7. Mallari and his family Id. at 7. As the Ninth Circuit noted, if Mallari can prove that the 20 above allegations are true, then Mallari may have suffered a 21 “direct and independent personal wrong,” giving him standing to 22 pursue his claims. 23 briefing does not address whether Mallari has evidence supporting 24 his allegations of intentional discrimination in violation of the 25 First Amendment or Fourteenth Amendment. 26 from additional briefing on this issue before this case proceeds 27 to trial. 28 briefing according to the schedule at the conclusion of this See Docket No. 51 at 2-3. Defendants’ The Court might benefit Accordingly, the parties shall submit supplemental 8 1 order. 2 II. 3 California Code of Regulations, title 22, section 74669 Defendants’ motion for summary judgment also challenges Mallari’s claim for a violation of section 74669. 5 already addressed this issue in its order granting Defendants’ 6 second motion to dismiss. 7 not shown that section 74669 gives rise to a private cause of 8 action. 9 United States District Court Northern District of California 4 remanded only with respect to Mallari’s § 1983 claim, and so 10 The Court As stated in that order, Mallari has See Docket No. 43 at 9. The Ninth Circuit reversed and Mallari’s section 74669 claim is no longer in play. 11 CONCLUSION 12 Within fourteen days of this order, Defendants shall file a 13 brief not exceeding fifteen pages addressing whether Mallari has 14 sufficient evidence to support his allegations of standing based 15 on Defendants’ intentional discrimination violating his 16 Fourteenth Amendment rights. 17 this brief, Mallari shall file a brief not exceeding fifteen 18 pages addressing the same issue and responding to Defendants’ 19 allegations. 20 thereafter. 21 related matters at the JDC Legal Help Center, which provides free 22 information and limited-scope legal assistance to pro se 23 litigants. 24 be found at 25 Within fourteen days of the filing Defendants may file a five-page reply seven days Mallari may seek assistance with his brief and More information about the JDC Legal Help Center can The Court provides the following warning to Mallari, which 26 is similar to the one that was previously provided to him in the 27 Court’s January 3, 2018 order: 28 The defendants have made a motion for summary judgment by 9 which they seek to have your case dismissed. 2 summary judgment under Rule 56 of the Federal Rules of Civil 3 Procedure will, if granted, end your case. 4 what you must do in order to oppose a motion for summary 5 judgment. 6 is no genuine issue of material fact—that is, if there is no real 7 dispute about any fact that would affect the result of your case, 8 the party who asked for summary judgment is entitled to judgment 9 United States District Court Northern District of California 1 as a matter of law, which will end your case. A motion for Rule 56 tells you Generally, summary judgment must be granted when there When a party you 10 are suing makes a motion for summary judgment that is properly 11 supported by declarations (or other sworn testimony), you cannot 12 simply rely on what your complaint says. 13 out specific facts in declarations, depositions, answers to 14 interrogatories, or authenticated documents, as provided in Rule 15 [56(c)], that contradict the facts shown in the defendant’s 16 declarations and documents and show that there is a genuine issue 17 of material fact for trial. 18 evidence in opposition, summary judgment, if appropriate, may be 19 entered against you. If summary judgment is granted, your case 20 will be dismissed and there will be no trial. 21 154 F.3d 952, 962-63 (9th Cir. 1998). 22 Instead, you must set If you do not submit your own Rand v. Rowland, Mallari also must comply with the Civil Local Rules of this 23 Court. 24 5(a) requires that factual contentions be supported by an 25 affidavit or declaration and by appropriate references to the 26 record. 27 requests for admission and other evidentiary matters must be 28 appropriately authenticated by an affidavit or declaration. When opposing summary judgment, Civil Local Rule 7- Extracts from depositions, interrogatory answers, 10 An 1 affidavit or declaration may contain only facts, must conform as 2 much as possible to the requirements of Federal Rule of Civil 3 Procedure 56 and must avoid conclusions and argument. 4 7-5(b). 5 specify the basis for that information or belief. 6 Local Rule 7-5(b) warns that an affidavit or declaration not in 7 compliance with this rule may be stricken in whole or in part. 8 United States District Court Northern District of California 9 10 Civil L.R. Any statement made upon information or belief must Id. Civil The pretrial conference is continued to May 15, 2018 at 2:30 pm. All other dates will remain the same. The Clerk of the Court shall serve a copy of this order 11 directly on Mallari at the following address: Danilo Mallari, 12 1861 Camino Real Way, Roseville, CA 95747. 13 The Clerk of the Court shall randomly assign this matter to 14 a magistrate judge for a settlement conference, which should be 15 completed no later than April 27, 2018. 16 IT IS SO ORDERED. 17 18 Dated: March 6, 2018 CLAUDIA WILKEN United States District Judge 19 20 21 22 23 24 25 26 27 28 11

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