Trial Court Properly Abstained from Resolving Class Action Claims that would Require it to “Assume General Regulatory Powers over the Health Care Industry through the Guise of Enforcing the UCL” California Court Holds
Plaintiff (now deceased) filed a putative class action in California state court against numerous skilled nursing and intermediate care facilities alleging violations of the state’s unfair competition law (UCL) for failing to comply with the nursing hour requirements set forth in Health and Safety Code § 1276.5(a). Alvarado v. Selma Convalescent Hosp., 153 Cal.App.4th 1292, 64 Cal.Rptr.3d 250, 251-52 (Cal.App. 2007). Defense attorneys demurred to the class action complaint, arguing that the court “should abstain from adjudicating the action or defer to the primary jurisdiction of the [Department of Health Services (DHS)]” and arguing further that no private right of action exists under § 1276.5(a). Id., at 253. Plaintiff disputed these arguments, and argued that the doctrine of “primary jurisdiction” did not apply, id. The trial court granted the defense motion and dismissed the class action with prejudice, holding that even assuming plaintiff could pursue a private action under § 1276.5, it nevertheless had discretion to abstain from hearing the case. Id. The appellate court affirmed the dismissal of the class action complaint, explaining at page 252: “Adjudicating the alleged controversy would have required the trial court to become involved in complex health care matters concerning the staffing of skilled nursing and intermediate care facilities and assume regulatory functions of the [DHS]. In addition, granting and enforcing the requested relief would place an unnecessary burden on the trial court given the power of the DHS to monitor and enforce compliance with section 1275.6.”
Noting that the question before it was whether the trial court abused its discretion by abstaining from adjudicating the alleged controversy,” Alvarado, at 253, the Court of Appeal began by observing that the UCL claims in the class action complaint sought equitable relief, and that “[b]ecause these remedies are equitable in nature, under the doctrine of judicial abstention, courts have the discretion to abstain from employing them,” id., at253-54 (citation omitted). In broad terms, the judicial abstention doctrine may be invoked “when the lawsuit involves determining complex economic policy which is best handled by the legislature or an administrative agency” or “where granting injunctive relief would be unnecessarily burdensome for the trial court to monitor and enforce given the availability of more effective means of redress.” Id., at 254 (citations omitted). Thus, a court should abstain if “granting the requested relief would require a trial court to assume the functions of an administrative agency, or to interfere with the functions of an administrative agency.” Id. (citations omitted).
Here, the state Legislature charged the DHS with responsibility for “adopt[ing] regulations setting forth the minimum number of equivalent nursing hours per patient required in skilled nursing and intermediate care facilities.” Alvarado, at 257 (quoting Health & Safety Code, § 1276.5(a)). The statute also defines “nursing hours” as “number of hours of work performed per patient day by aides, nursing assistants, or orderlies plus two times the number of hours worked per patient day by registered nurses and licensed vocational nurses (except directors of nursing in facilities of 60 or larger capacity) and, in the distinct part of facilities and freestanding facilities providing care for the developmentally disabled or mentally disordered, by licensed psychiatric technicians who perform direct nursing services for patients in skilled nursing and intermediate care facilities, except when the skilled nursing and intermediate care facility is licensed as a part of a state hospital, and except that nursing hours for skilled nursing facilities means the actual hours of work, without doubling the hours performed per patient day by registered nurses and licensed vocational nurses.” Id., at 257-58 (quoting Health & Safety Code, § 1276.5(b)(1)).
In this case, the appellate court found that “[a]djudicating this class action controversy would require the trial court to assume general regulatory powers over the health care industry through the guise of enforcing the UCL, a task for which the courts are not well-equipped.” Alvarado, at 258. This is particularly true because under the court’s analysis, see id., at 258-59, § 1276.5(a) “is a regulatory statute, which the Legislature intended the DHS to enforce.” Id., at 258. Moreover, “ the DHS is better equipped to determine compliance with the statute.” Id., at 259. Deciding the merits of the class action claims would require the trial court “determine on a class-wide basis whether a particular skilled nursing or intermediate care facility is governed by section 1276.5 or 1276.9,” and perform the difficult task of “calculat[ing] nursing hours for each facility involved in this case,” id., at 259. Additionally, “adjudicating this class action controversy would require the trial court to classify employees into different categories including aides, nursing assistants, orderlies, registered nurses, licensed vocational nurses, directors of nursing and licensed psychiatric technicians who perform direct nursing services,” id., and then “calculate the hours they worked,” id., at 259-60. This task is complicated by the fact that the statute “provides different formulas for calculating nursing hours in different skilled nursing facilities.” Id. As the Court of Appeal found at page 260,
Thus, the court would have to determine on a class-wide basis the size, configuration and licensing status of skilled nursing and intermediate care facilities. For example, the court would have to determine whether the facility accommodated 60 or more patients, whether a distinct part of a facility or free-standing facility provided care for developmentally disabled or mentally disordered persons, and whether the facility was licensed as a part of a state hospital.
In light of this, the appellate court concluded that the trial court properly abstained from the class action: “We find that calculating on a class-wide basis whether skilled nursing or intermediate facilities are in compliance with section 1276.5, subdivision (a), or section 1276.9, subdivisions (a) or (d) , is a task better accomplished by an administrative agency than by trial courts.” Alvarado, at 260. Indeed, if the trial court had injected itself into the nursing care regulations in the manner required by the class action complaint, then “it would have to decide whether to issue networks of injunctions across the State of California” and, if so, “it would have to monitor and enforce them.” Id. The trial court did not abuse its discretion in electing to abstain from this task. Id. Accordingly, the Court of Appeal affirmed the dismissal of the class action complaint.