Shulman Hodges & Bastian LLP
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Court of Appeals Affirms Majority of Trial Court's Order Sustaining Demurrer to Class Action Complaint

Shulman Hodges & Bastian LLP was recently successful in defeating an appeal of an order sustaining its Hospital client's demurrer to a class action complaint. The Court of Appeal affirmed the majority of the trial court's order sustaining the demurrer to plaintiff's third amended complaint.

Specifically, the Court of Appeals determined that while plaintiff had standing to bring his unfair competition claims against the Hospital, the safe harbor created by Business & Professions Code §§ 16770 and 17042 precludes plaintiff from alleging the Hospital's practice of charging self-pay patients more than patients covered by government programs or private insurance violates the Unfair Competition Law. Furthermore, the Court of Appeals affirmed the trial court's order sustaining the Hospital's demurrer to plaintiff's claim that the Hospital's purported acts and practices constitute misrepresentations that the services and/or supplies in question had characteristics, uses and/or benefits which they did not have. Cal. Civ. Code § 1770(a)(5). The Court held "to the extent plaintiff relies on purported violations of the CLRA premised on misrepresentations, his claim that defendants' business practice is unlawful fails because he does not allege facts supporting a finding he actually relied on or could reasonably rely on any misrepresentations in seeking medical treatment at defendants' hospital."

The Hospital also prevailed against plaintiffs' allegations that the Hospital's billing acts and practices constitute misleading statements of fact concerning reasons for, existence of, or amounts of price reductions, that the Hospital represented that a transaction involved obligations which it does not have or involve, or which are prohibited by law and fraud.

Moreover, the Court of Appeals affirmed the trial court's order sustaining the Hospital's demurrer to plaintiff's fraudulent acts or practices claim holding plaintiff failed to plead injury occurred "as a result of" the alleged fraudulent acts or representation or that he relied upon them.

Finally, the Court of Appeals affirmed the trial court's order sustaining the Hospital's demurrer to plaintiff's California Legal Remedies Act based on misrepresentation "because plaintiff failed to allege he read and relief on the signed Contracts or other representation by defendants, he lacks standing to maintain the CLRA cause of action on this basis."

If you have any questions or would like any assistance with legal issues regarding health care law, please contact Ron Hodges of Shulman Hodges & Bastian LLP at 949-340-3400 or [email protected]

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