Guthrey v. Alta CA Regional Center

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 ALETA GUTHREY, et al., No. 2:18-cv-01087-MCE-EFB 12 Plaintiffs, 13 v. MEMORANDUM AND ORDER 14 ALTA CALIFORNIA REGIONAL CENTER, et al., 15 Defendants. 16

17 18 Through the present lawsuit, Plaintiffs Aleta Guthrey (“Aleta”), a conserved adult, 19 through her Conservator, Areta Guthrey (“Areta”), and Areta, as an individual, 20 (collectively, “Plaintiffs”)1 seek damages on grounds that Aleta was wrongfully denied 21 access to support services to which she was entitled due to her multiple disabilities. 22 Areta, who in addition to serving as Aleta’s conservator is also her mother, further claims 23 that both she and Aleta were discriminated and retaliated against when Areta asserted 24 their right to such services. Defendants are three different entities alleged to be 25 responsible for the provision of services to Aleta. 26 /// 27 1 Given their shared surnames, the Court will utilize Plaintiffs’ first names when referring to them 28 individually. 1 Presently before the Court are three separate motions to dismiss Plaintiffs’ 2 Second Amended Complaint, ECF No. 69 (“SAC”), brought pursuant to Federal Rule of 3 Civil Procedure 12(b)(6)2 on behalf of (1) Defendant S.T.E.P., Inc. (“STEP”),3 4 ECF No. 70; (2) Defendant Alta California Regional Center (“Alta”), ECF No. 72; and 5 (3) Defendant On My Own Independent Living Services, Inc. (“On My Own”), 6 ECF No. 83. Following this Court’s authorization in light of Plaintiffs’ retention of 7 counsel, Plaintiffs filed a Sur-Reply to the pending Motions to Dismiss, to which each 8 Defendant has filed a response. See ECF Nos. 97–101. For the reasons set forth 9 below, Defendants’ Motions are GRANTED.4 10 11 BACKGROUND5 12 13 Aleta is a young woman with developmental disabilities as a result of 14 microcephaly, a physical and intellectual impairment that substantially limits all of her 15 major life activities. She does not speak, write, or eat by mouth, and she takes nutrition 16 by way of a gastrostomy tube. According to the SAC, Aleta qualifies as an individual 17 with a disability under all applicable state and federal laws. Areta is a single mother of 18 three children with developmental disabilities. She has served as Aleta’s conservator 19 since she turned 18, and until May 1, 2020, cared for Aleta on a full-time basis. Because 20 she suffers from both arthritis and bipolar disorder, Areta claims that caring for her family 21 is difficult. 22 Aleta was referred to California’s regional care system at the time of her birth in 23 1995. That system is governed by the Lanterman Developmental Disabilities Services 24

25 2 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure.

3 This acronym is a shortened version of “Strategies to Empower People.” 26

4 Because oral argument would not have been of material assistance, the Court ordered these 27 matters submitted on the briefs. E.D. Local Rule 230(g).

28 5 The following recitation of facts is taken, sometimes verbatim, from Plaintiffs’ SAC. 1 Act, California Welfare and Institutions Code §§ 4501 et seq. (“Lanterman Act” or “Act”). 2 The Act states that services should be provided to prevent or minimize the 3 institutionalization of developmentally disabled persons like Aleta and to enable them to 4 lead more independent and productive lives in the community. Provision of services 5 under the Lanterman Act is progressively delegated first from the California Health and 6 Human Services Agency to the California Department of Developmental Services 7 (“DDS”), and then from DDS to regional care centers which, in turn, contract with the 8 vendors who provide direct services to those qualifying for care. 9 In 2014, after moving to Citrus Heights, California, Aleta became a client of Alta 10 and Areta began discussing with Aleta’s assigned service coordinator at Alta the 11 provision of Supported Living Services (“SLS”) for Aleta in her own home. Although Alta 12 had at times indicated that Aleta’s feeding tube made independent living problematic, 13 even with personal attendant care, Areta was eventually introduced by Alta, in 2016, to 14 On My Own. Areta claims she signed numerous documents, including a contract, so 15 that On My Own could provide SLS such as locating a home and hiring personal 16 caregivers for Aleta under Alta’s auspices. 17 In April 2017, Areta was allegedly informed by On My Own representative Mary 18 McGlade that she had located a roommate for Aleta. Although Areta approved the 19 apartment in question, another resident refused to vacate the apartment and a different 20 apartment had to be found for Aleta and her proposed roommate. Areta claims that this 21 process was delayed by Alta’s desire to have a third young woman share the living 22 arrangement. Then, a meeting was scheduled between the other two prospective 23 roommates from which both Areta and Aleta were allegedly excluded. Once Areta 24 expressed disappointment about being left out of the meeting, she claims she was 25 informed in writing, on May 1, 2017, that On My Own was terminating services for Aleta. 26 Areta believes that this was in retaliation for her advocacy on Aleta’s behalf, and when 27 she spoke to Aleta’s service coordinator at Alta about what transpired, she claims to 28 /// 1 have been told, in writing, that vendors like On My Own had an absolute right to 2 discriminate and determine whether they wished to provide services. 3 In the summer of 2017, Aleta received another SLS referral through Alta, this time 4 for STEP. Areta again claims she entered into a contract with STEP to provide SLS for 5 Aleta, such as locating a suitable home and hiring caregivers. When Aleta’s case 6 manager at STEP was hired away by Alta a few weeks later, Aleta’s file had to be 7 reassigned, moving Aleta farther down the line in housing placement given the new 8 manager’s existing caseload. This resulted in a delay in Aleta being considered for SLS 9 until after Christmas 2017. 10 Areta contacted Jacquie Dillard-Foss, STEP’s chief executive officer, to see if 11 placement could be expedited on grounds that she and Aleta were in crisis and that the 12 situation was not safe. Specifically, Areta explained that both she and Aleta were not 13 sleeping, that Aleta was in danger when she was not supervised, that Aleta was not 14 receiving adequate supervision, and that Alta would not increase her hours as long as 15 Aleta lived at home. When Areta requested a status update in November 2017 as to 16 when SLS would be provided, however, she was told by Alta’s service coordinator that 17 STEP was refusing to provide services. Areta states that the email sent by Tammy 18 Smith, STEP’s SLS Program Manager, to Alta indicated that STEP’s decision turning 19 down the referral was based both on Areta’s advocacy as well as Aleta’s care needs. 20 The SAC further alleges that shortly before STEP rejected Aleta’s placement, Alta 21 scheduled a meeting for current SLS providers. Areta claims that she attempted to sign 22 up for the meeting, but Alta refused her, stating that the meeting was for current vendors 23 only. However, Areta alleges that either Tammy Smith or Jacquie Dillard-Foss attended 24 the meeting with representatives of On My Own, who intentionally influenced STEP’s 25 decision to reject Aleta. 26 In the beginning of 2020, Areta attended a vendor orientation course at Alta in 27 order to become a SLS vendor. Shortly after the orientation, a vendor suddenly 28 appeared, and a plan was put into place and quickly executed. On May 1, 2020, Aleta 1 finally moved into her own home in the community with the assistance of two caregivers, 2 increased supervision, and elevated services. 3 4 STANDARD 5 6 On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all 7 allegations of material fact must be accepted as true and construed in the light most 8 favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 9 (9th Cir. 1996). Rule 8(a)(2) “requires only ‘a short and plain statement of the claim 10 showing that the pleader is entitled to relief’ in order to ‘give the defendant fair notice of 11 what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 12 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A 13 complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual 14 allegations. However, “a plaintiff’s obligation to provide the grounds of his entitlement to 15 relief requires more than labels and conclusions, and a formulaic recitation of the 16 elements of a cause of action will not do.” Id. (internal citations and quotations omitted). 17 A court is not required to accept as true a “legal conclusion couched as a factual 18 allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 19 555). “Factual allegations must be enough to raise a right to relief above the speculative 20 level.” Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. Miller, 21 Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must 22 contain something more than “a statement of facts that merely creates a suspicion [of] a 23 legally cognizable right of action”)). 24 Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket 25 assertion, of entitlement to relief.” Twombly, 550 U.S. at 555 n.3 (internal citations and 26 quotations omitted). Thus, “[w]ithout some factual allegation in the complaint, it is hard 27 to see how a claimant could satisfy the requirement of providing not only ‘fair notice’ of 28 the nature of the claim, but also ‘grounds’ on which the claim rests.” Id. (citing Wright & 1 Miller, supra, at 94, 95). A pleading must contain “only enough facts to state a claim to 2 relief that is plausible on its face.” Id. at 570. If the “plaintiffs . . . have not nudged their 3 claims across the line from conceivable to plausible, their complaint must be dismissed.” 4 Id. However, “a well-pleaded complaint may proceed even if it strikes a savvy judge that 5 actual proof of those facts is improbable, and ‘that a recovery is very remote and 6 unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). 7 A court granting a motion to dismiss a complaint must then decide whether to 8 grant leave to amend. Leave to amend should be “freely given” where there is no 9 “undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 10 to the opposing party by virtue of allowance of the amendment, [or] futility of [the] 11 amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 12 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 13 be considered when deciding whether to grant leave to amend). Not all of these factors 14 merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 15 carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 16 185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 17 “the complaint could not be saved by any amendment.” Intri-Plex Techs., Inc. v. Crest 18 Group, Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 19 1006, 1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 20 (9th Cir. 1989) (“Leave need not be granted where the amendment of the complaint . . . 21 constitutes an exercise in futility . . . .”)). 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 ANALYSIS 2 A. Claims One through Three: Violations of Title III of the Americans 3 with Disabilities Act (“ADA”)6 4 Title III of the ADA provides that “[n]o individual shall be discriminated against on 5 the basis of disability in the full and equal enjoyment of the goods, services, facilities, 6 privileges, advantages, or accommodations of any place of public accommodation by 7 any person who owns, leases (or leases to), or operates a place of public 8 accommodation.” 42 U.S.C. § 12182(a). At issue here is whether Alta, On My Own, and 9 STEP each qualify as places of public accommodations. 10 The Ninth Circuit has defined places of public accommodation as “actual, physical 11 places where goods or services are open to the public, and places where the public gets 12 those goods or services.” Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104, 13 1114 (9th Cir. 2000). There must accordingly be “some connection between the good or 14 service complained of and an actual physical place . . .” Id. 15 In their SAC, Plaintiffs allege that, from its offices, Alta provides vendor 16 registration and orientation meetings for potential vendors, and its service coordinators 17 provide case management services such as making phone calls, preparing contracts, 18 and sending emails to vendors and service providers “to create a supported living 19 arrangement for Aleta.” SAC ¶¶ 88, 98. Plaintiffs further allege that “Alta 20 representatives held meetings at Alta’s offices at which Aleta’s needs and desires were 21 assessed and discussed and the necessary forms were completed to outline the terms 22 of the services that would be provided by Alta and the vendors for Aleta’s supported 23 living.” Id. ¶ 89. As for STEP and On My Own, Plaintiffs allege that each “performs the 24 following functions at their offices”: “administrative functions; rental or leasing of 25

6 In their Sur-Reply, Plaintiffs allege for the first time that Defendants are instrumentalities of the 26 state and thus subject to Title II of the ADA, although it is unclear whether Plaintiffs are asserting such a claim against all Defendants or Alta only. See Pls.’ Sur-Reply, ECF No. 98, at 4–5. In any event, Plaintiffs 27 have only asserted claims based on Title III of the ADA, and there is no mention of Title II in the SAC. See SAC ¶¶ 30, 82, 110, 134. Given this and that Plaintiffs have never sought leave to add a Title II claim, the 28 Court will not consider such a claim or any derivative arguments now. 1 administrative office(s) space; purchasing office furniture, supplies, and equipment; 2 arranging travel designated in the SLS vendor’s contract as necessary for the 3 performance of administrative functions; accounting; payroll; and background checks for 4 paid staff, volunteers, and contractors as specified in the SLS vendor’s contract.” Id. 5 ¶¶ 114, 139. Lastly, Plaintiffs allege that On My Own and STEP “received emails, 6 documents and phone calls from [their] office[s] regarding the services being provided.” 7 Id. ¶¶ 117, 144. 8 While such allegations are more detailed than those set forth in previous 9 Complaints, the SAC still fails to show a nexus between the disability support services 10 provided by Defendants and their physical office locations. See Mem. and Order, ECF 11 No. 68, at 11–14. These allegations only demonstrate that administrative tasks were 12 performed at Defendants’ offices, not disability support services such as providing care 13 or increased supervision. In other words, there are no allegations that Defendants 14 provided SLS or disability support services directly from their physical office locations. 15 Plaintiffs’ Title III ADA claims thus fail as currently constituted. 16 As for leave to amend, this is Plaintiffs’ third iteration of the Complaint and despite 17 being given multiple opportunities by the Court, Plaintiffs have failed to adequately allege 18 a viable ADA claim against Defendants. Accordingly, Claims One through Three are 19 DISMISSED without leave to amend. 20 B. Claims Four through Six: Violations of California’s Unruh Civil Rights Act (“Unruh Act”) 21 22 California’s Unruh Act permits individuals injured by an ADA violation to recover 23 damages through a private lawsuit. Munson v. Del Taco, Inc., 46 Cal. 4th 661, 673 24 (2009). Because Plaintiffs have not identified any viable ADA violation for the reasons 25 stated above, their Unruh Act claims also fail. Claims Four through Six are therefore 26 DISMISSED without leave to amend. 27 /// 28 /// 1 C. Claims Seven through Nine: Tortious Breach of Contract, Covenant of Good Faith and Fair Dealing 2 3 Although an implied covenant of good faith and fair dealing may be implied by law 4 into every contract, and while a breach of that covenant can potentially give rise to tort 5 liability in a contractual setting, case law sharply limits the kinds of contracts that can 6 support an additional claim sounding in tort. Generally, “[c]onduct amounting to a 7 breach of contract becomes tortious only when it also violates an independent duty 8 arising from principles of tort law.” Freeman & Mills, Inc. v. Belcher Oil Co., 9 11 Cal. 4th 85, 94–95 (1995) (citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 10 7 Cal. 4th 503, 515 (1994)) (alteration in original). The California Supreme Court 11 concluded that tort recovery is precluded other than in the context of insurance 12 coverage, “at least in the absence of violation of ‘an independent duty arising from 13 principles of tort law’ other than the bad faith denial of the existence of, or liability under, 14 the breached contract.” Freeman & Mills, 11 Cal. 4th at 102 (citing Applied Equipment, 15 7 Cal. 4th at 515). 16 Plaintiffs allege that “Defendants were aware of the personal and emotional 17 nature of the services to be provided as Areta had informed each of them many times 18 that Aleta was in need of more services than were currently being provided,” and that 19 “Defendants knew that the mental and emotional well-being of the plaintiffs was a core 20 reason for the contract.” SAC ¶¶ 205, 214. Even construing these allegations in a light 21 most favorable to Plaintiffs, this case still does not fall within the very narrow range of 22 cases where emotional distress would be expected in the event of a breach of contract. 23 As this Court previously explained, 24 [t]here is no authority for the proposition that delay in providing a different level of care to a profoundly disabled individual like 25 Aleta, where her basic care needs continued to be met in the interim and where additional services were ultimately 26 provided, falls within the limited exception permitting tort liability . . . Nor is there support for the even more attenuated 27 argument that the provision of such services to Aleta expressly implicated Areta’s mental and emotional well-being so as to 28 permit tort damages to Areta directly. 1 Mem. and Order, ECF No. 68, at 16. Claims Seven through Nine are thus DISMISSED 2 without leave to amend in light of Plaintiffs’ repeated failures to sustain such a claim. 3 D. Claims Ten through Twelve: Violations of the Rehabilitation Act of 1973 (“Rehabilitation Act”) 4 5 Under § 504 of the Rehabilitation Act, a plaintiff must show (1) he or she is an 6 “individual with a disability” (2) “otherwise qualified” to receive the benefit (3) but denied 7 the benefits of the program solely by reason of his disability, (4) provided that the 8 program receives federal financial assistance. See 29 U.S.C. § 794; Weinrich v. L.A. 9 Cnty. Metro. Transp. Auth., 114 F.3d 976, 978 (9th Cir. 1997); Bonner v. Lewis, 857 F.2d 10 559, 562–63 (9th Cir. 1988). The first three prerequisites mirror the requirements for 11 establishing a violation of Title III of the ADA, which similarly requires that a disabled 12 individual be denied the benefits of a public accommodation because of his or her 13 disability. Molski v. M.J. Cable, Inc., 481 F.3d 724, 730 (9th Cir. 2007). 14 In order to demonstrate an additional claim under the Rehabilitation Act, a plaintiff 15 must first establish an ADA claim before going on to show that the program in question 16 receives federal financial assistance. Weinrich, 114 F.3d at 978. Once again, Plaintiffs 17 fail to state an ADA claim against Defendants which means that Plaintiffs have also not 18 satisfied the prerequisites for a viable Rehabilitation Act claim. Accordingly, Claims Ten 19 through Twelve are DISMISSED without leave to amend.7 20 /// 21 /// 22 /// 23 /// 24 /// 25 ///

26 7 Because dismissal of Plaintiffs’ claims is warranted under Rule 12(b)(6), the Court need not consider Alta’s alternative motion for a definite statement, see ECF No. 72, at 10–11, or STEP’s argument 27 that Plaintiffs lack standing to sue it, see ECF No. 70-1, at 9–11. Furthermore, because the Court need not consider documents outside the pleadings in reaching its decision, STEP’s Request for Judicial Notice, 28 ECF No. 70-2, is DENIED as moot. 1 CONCLUSION 2 3 For the foregoing reasons, Defendants STEP, Alta, and On My Own’s Motions to 4 | Dismiss (ECF Nos. 70, 72, 83) are each GRANTED without leave to amend. The Clerk 5 | of Court is directed to enter judgment in favor of Defendants and to close the case. 6 IT IS SO ORDERED. 7 | Dated: February 1, 2023 KE . SENIOR UNITED STATES URTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11