GGNSC Clarion LP v. Kane

131 A.3d 1062, 2016 Pa. Commw. LEXIS 44
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 11, 2016
StatusPublished
Cited by17 cases

This text of 131 A.3d 1062 (GGNSC Clarion LP v. Kane) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GGNSC Clarion LP v. Kane, 131 A.3d 1062, 2016 Pa. Commw. LEXIS 44 (Pa. Ct. App. 2016).

Opinion

OPINION BY

President Judge DAN PELLEGRINI.

Before the Court are the preliminary objections and motion to dismiss of Kathleen G. Kane, in her Official Capacity as Attorney General of the Commonwealth of Pennsylvania (collectively, OAG) and Cohen Milstein Sellers & Toll PLLC (Cohen Milstein) to the amended petition for review seeking declaratory relief filed by GGNSC Clarion LP d/b/a “Golden Living Center — Clarion,” et al. (collectively, Facilities) 2 pursuant to the Declaratory Judgments Act.3 We sustain the preliminary objections, grant the motion to dismiss, and dismiss the amended petition for review.

I.

A.

In 2012, OAG entered into a contingent fee agreement with Cohen Milstein, which has been subsequently amended, through which Cohen Milstein began an investigation into whether a number of the Facili[1065]*1065ties had fraudulently, deceptively or falsely represented their services in their billing and marketing practices under the Unfair Trade Practices and Consumer Protection Law (Consumer Protection Law),4 breach of contract and unjust enrichment.

In this declaratory judgment action, the Facilities contend the investigation was not based on any material consumer complaints, but was based on Cohen Milstein’s efforts to persuade OAG, among many other state attorneys general, to investigate purported violations and to sue. In their petition for review, they contend that the Attorney General exceeded her authority by issuing a series of administrative subpoenas and retaining Cohen Milstein to assist in her investigation and the related litigation and sought a declaration:

• In Count I, that OAG lacks authority to investigate or pursue litigation concerning staffing levels at their skilled nursing facilities because the Health Care Facilities Act5 vests exclusive ju[1066]*1066risdiction in DOH and that OAG’s action in this case- violates their due process rights by circumventing the authorized regulatory process; 6
• In Count II, that OAG is not empowered to delegate its authority to Cohen Milstein and the contract between,OAG and Cohen Milstein constitutes an improper expenditure of state funds under state law and the Pennsylvania Constitution;7 and
• In Count III, that OAG’s subpoenas were improperly issued for the purpose of litigation in violation of Sections 918,8 919,9 and 921 of the Administrative Code [1067]*1067of 1929 (Administrative Code)10 and are unenforceable as overbroad and lacking definiteness. ■

In May 2015, this Court granted the Pennsylvania HealthCare Association (PHCA) leave to intervene in the action. In its petition, PHCA stated that “[i]f permitted to intervene, PHCA will adopt the petition for review filed by [the Facilities] as the basis for challenge to [OAG’s] actions, and would not propose to file a separate petition for review.” (Unopposed Petition for Leave to Intervene at ¶ 28).

B,

Overtaking the Facilities’ declaratory judgment action, in July 2015, OAG filed Kane v. GGNSC, LLC, et al., docketed in this Court at No. 886 M.D. 2015, which is an enforcement action under the Consumer Protection Law against two of the GGNSC facilities and twelve other Golden Living nursing homes. In that case, OAG alleged violations of the Consumer Protection Law and common law arising from the marketing and billing practices .of Golden Living skilled' nursing facilities and their parent corporations. Specifically, OAG claimed that Golden Living facilities’ statements in their marketing promising to meet residents’ needs for hygiene, comfort and nourishment were false, deceptive and misleading. OAG also claimed that the Golden Living defendants had engaged in deceptive, misleading and unfair practices by representing to consumers, insurers and the Commonwealth that they had provided basic care to residents when such basic care had, in fact, not been provided to residents. In their answer to ■ OAG’s complaint, the Facilities allege, among other things, that the complaint was filed in retaliation for its filing the declaratory judgment action now before us as well as stating that-the OAG complaint mooted the request for subpoenas to the. Facilities.11

II.

As noted above, presently -before the Court are, OAG’s preliminary objections 12 and motion to dismiss13 the amend[1068]*1068ed petition for review. With respect to Count I of the amended petition, as outlined above, the Facilities allege that OAG is without authority to conduct an investigation and to pursue litigation concerning the staffing level at their facilities, and that it is enforcing standards that are not required by DOH or federal agencies which constitutes administrative rulemak-ing in violation of the regulatory procedures and their due process rights. Additionally, with respect to Count III, the Facilities allege that OAG’s subpoenas were improperly issued for the purpose of litigation in violation of the Administrative Code and are unenforceable as overbroad and lacking definiteness.

OAG filed the motion to dismiss as to some GGNSC facilities and Golden Living nursing homes on the grounds of mootness. OAG averred that the Facilities could raise matters raised in this action in the context of OAG’s affirmative enforcement action. Moreover, OAG contends that because the administrative subpoenas issued to all GGNSC facilities were withdrawn, the Facilities’ Count III claims that those subpoenas were improperly issued is moot, and to the extent that the Facilities’ action was premised on the investigatory subpoenas, they now lack standing to pursue their amended petition for review. Accordingly, OAG concluded that because it filed an affirmative complaint against two of the GGNSC facilities and withdrew the subpoenas issued to all of the GGNSC facilities, judgment as it relates to GGNSC facilities should be granted in favor of OAG and Cohen Milstein with respect to those facilities.

As noted above, OAG has filed an enforcement action under the Consumer Protection Law in Kane v. GGNSC, LLC, et al., docketed at No. 336 M.D.2015, against two of the GGNSC facilities and twelve other Golden Living nursing homes and has asserted that any administrative subpoenas issued to these entities have been mooted or withdrawn. As a result, those Facilities may raise all of the claims raised in Counts I and III of the instant petition seeking declaratory relief that directly challenge OAG’s authority to enforce the Consumer Protection Law against them in that enforcement proceeding. In fact, those Facilities raise the same claims in their preliminary objections to OAG’s petition for review in the enforcement action that are raised in Counts I and III of the instant petition seeking declaratory relief.

Moreover, in the instant petition seeking declaratory relief, the Facilities specifically allege that “[ljitigation is therefore imminent and inevitable” in attempting to establish that “[a]n actual and immediate controversy exists between” them and OAG and Cohen Milstein. (Amended Petition for Review at ¶¶ 124, 131, 138).14

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Bluebook (online)
131 A.3d 1062, 2016 Pa. Commw. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ggnsc-clarion-lp-v-kane-pacommwct-2016.