Opinion
Case No: 2:15-cv-593
02-16-2015
Manor Care of Westerville, Ohio, Plaintiff, v. Nick H. Johnson, P.C., Defendant.
Magistrate Judge King
Opinion and Order
This matter is before the court on plaintiff's motion for a temporary restraining order to restrain defendant from placing advertisements of the same type and nature as are contained in Exhibits A and B to the complaint. The action was originally filed in the Franklin County, Ohio Court of Common Pleas. On February 3, 2015 the state court issued a temporary restraining order that is effective through February 17, 2015. On February 11, defendant removed the action to this court on grounds of diversity jurisdiction. On February 13, the court held a hearing by telephone conference concerning plaintiff's request to extend the TRO. For the reasons stated below, the court denies plaintiff's motion and will allow the state court TRO to expire on February 17, 2015.
I. Background
Plaintiff Manor Care of Westerville, Ohio, LLC (d/b/a Heartland of Uptown Westerville) operates a 180-bed skilled nursing facility in Westerville, Ohio. Plaintiff is a Delaware limited liability company with it principal place of business in Ohio. Defendant Nick Johnson is an attorney in Texas and is not licensed to practice law in Ohio. Johnson allegedly does business through the Johnson Law Group, an Ohio limited liability company. The Johnson Law Group was voluntarily dismissed as a defendant prior to removal to federal court.
On January 14 and 20, 2015, defendant allegedly placed an advertisement in the Columbus Dispatch that began:
IMPORTANT NOTICE
This Westerville nursing home has been cited for multiple deficiencies.
MCHS---WESTERVILLE
140 Old County Line Rd, Westerville 43081
According to the complaint, the advertisement targeted plaintiff, as the address listed matches the address of plaintiff's place of business.
The advertisement then listed 23 deficiencies for which plaintiff had received a citation, with the dates of citation also listed. This list included, for example:
• FAILURE to develop policies that prevent mistreatment, neglect, or abuse of residents or theft of resident property. [3/23/2011, 3/19/2012, 6/24/2013]The advertisement noted that the deficiencies were "obtained from past federal and state inspection results available on Medicare.gov."
• FAILURE to make sure that the nursing home area is free from accident hazards and risks and provides supervision to prevent avoidable accidents. [3/23/2011, 7/24/2012, 10/25/2013]
• FAILURE to immediately tell the resident, the resident's doctor and a family member of the resident situations (injury/decline/room, etc.) that affect the resident. [8/15/2013, 10/25/2013].
Below the list of deficiencies were the following statements:
THESE DEFICIENCIES ARE KNOWN TO CAUSE SEVERE INJURY, HEALTH
DETERIORATION, BEDSORES AND EVEN DEATH.
IF YOU OR A LOVED ONE WAS AFFECTED BY ONE OF THESE DEFICIENCIES,
HOSPITALIZED, OR INJURED, CALL JOHNSON LAW GROUP FOR A FREE
CONSULTATION.
At the bottom of the advertisement was a telephone number for the Johnson Law Group and an address in Texas for Nick Johnson.
The complaint asserts claims under Ohio's Deceptive Trade Practices Act, O.R.C. § 4165.02 and for defamation. Plaintiff argues that the statement that "these deficiencies are known to cause severe injury, health deterioration, bedsores and even death" is false and deceptive because the actual conduct underlying the citations was not sufficiently serious to have caused severe harm. The complaint provides the following example. The advertisement states that plaintiff was cited for "failure to provide care for residents in a way that keeps or builds each resident's dignity and respect of individuality." The conduct that led to that citation, according to the complaint, was that several residents were given disposable drinking cups rather than glass cups.
During the February 13, 2015 telephone conference with the court, plaintiff's counsel clarified that the plaintiff was in fact cited for all of the deficiencies listed in the advertisement. The citations were issued by representatives of the Ohio Department of Health during surveys of plaintiff's facility pursuant to federal "OBRA Regulations." See 42 C.F.R. § 483, et seq. (Omnibus Budget Reconciliation Act of 1987). Plaintiff states that all of the deficiencies have been resolved through "plans of correction" with the Department.
On February 13, 2015, plaintiff moved to remand the case to state court on the basis that the amount in controversy is not met.
The court also notes that several similar cases have been removed to this federal district court. Heartland of Portsmouth OH, LLC v. McHugh Fuller Law Group, PLLC, No. 1:15-cv-007 (S.D. Ohio); Heartland-Mt. Airy of Cincinnati, OH, LLC v. Nick H. Johnson, P.C., No. 1:15-cv-086 (S.D. Ohio) (denying TRO because plaintiff did not establish irreparable injury); Heartland of Urbana Ohio, LLC v. McHugh Fuller Law Group, PLLC, No. 3:15-cv-004 (S.D. Ohio).
II. Discussion
Temporary restraining orders and preliminary injunctions are available under Rule 65 of the Federal Rules of Civil Procedure. They are extraordinary remedies that are governed by the following considerations: "(1) whether the movant has a strong likelihood of success on the merits, (2) whether the movant would suffer irreparable injury absent a stay, (3) whether granting the stay would cause substantial harm to others, and (4) whether the public interest would be served by granting the stay." Ohio Republican Party v. Brunner, 543 F.3d 357, 361 (6th Cir. 2008); see also Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008).
"Although no one factor is controlling, a finding that there is simply no likelihood of success on the merits is usually fatal." Gonzales v. Nat'l Bd. of Med. Examiners, 225 F.3d 620, 625 (6th Cir. 2000); accord Jolivette v. Husted, 694 F.3d 760, 765 (6th Cir. 2012). "The party seeking the preliminary injunction bears the burden of justifying such relief, including showing irreparable harm and likelihood of success." McNeilly v. Land, 684 F.3d 611, 615 (6th Cir. 2012).
As characterized by counsel in the February 13, 2015 conference, plaintiff's argument for a TRO relies on its likelihood of obtaining injunctive relief under the Deceptive Trade Practices Act. The Act provides:
A person who is likely to be damaged by a person who commits a deceptive trade practice that is listed in division (A) of section 4165.02 of the Revised Code may commence a civil action for injunctive relief against the other person, and the court of common pleas involved in that action may grant injunctive relief based on the
principles of equity and on the terms that the court considers reasonable. Proof of monetary damage or loss of profits is not required in a civil action commenced under division (A)(1) of this section.O.R.C. § 4165.03(A)(1).
The complaint asserts that defendant's advertisement: is likely to cause confusion or misunderstanding as to the government's certification of nursing home services, represents that plaintiff's services have certain characteristics that they do not have, falsely represents that plaintiff's services are anything other than sufficient and currently in compliance with applicable law, and disparages plaintiff's business.
A leading case in this area of the law is Diamond Co. v. Gentry Acquisition Corp., Inc., 48 Ohio Misc.2d 1, 531 N.E.2d 777 (Ohio Ct. C.P. 1988). In Diamond Co., plaintiff sought a TRO and preliminary injunctive relief under the Act against the running of an advertisement in Cleveland-area newspapers by a competitor in the men's clothing business. The advertisement made claims concerning the relative price and quality of the goods being offered by defendant and plaintiff. The court held that in order to be entitled to injunctive relief, plaintiff had to demonstrate four elements by "clear and convincing evidence": (1) a false statement, or a statement which is misleading, (2) which statement has actually deceived or has the tendency to deceive a substantial segment of the target audience, (3) the deception is material in that it is likely to influence a purchasing decision, and (4) plaintiff has been or is likely to be injured as a result. 531 N.E.2d at 779, 781-82.
The court in Diamond Co. denied preliminary injunctive relief because the statements in the advertisements amounted to puffery, "boastful assertions and exaggerated descriptions." Id. at 783. "[T]he consuming public has become so accustomed to discounting what has been said in ads that any advertising is inevitably and inherently discounted itself. The targeted consuming public is wiser than its most nimble critic and this Court still believes in the competency, judgment and the wisdom of our people." Id. at 784.
Though Diamond Co. is a decision of a lower state court, it is a "carefully reasoned" and persuasive opinion in the application of Deceptive Trade Practices Act's injunction provision to advertisements. International Diamond Exchange Jewelers, Inc. v. U.S. Diamond & Gold Jewelers, Inc., 70 Ohio App.3d 667, 591 N.E.2d 881, 888-89 (Ohio Ct. App. 1991) (finding allegation that statements in an advertisement about pricing discounts were misleading "falls short of the clear and convincing standard needed to support the necessity for a preliminary injunction").
In its motion for a TRO, plaintiff argues that defendant's advertisement is likely to cause a false impression among readers about the severity of the cited deficiencies and whether any violations are ongoing. Plaintiff contends that the advertisement deceptively suggests that each of the deficiencies carried the reasonable potential to cause harm. And plaintiff argues that the advertisement failed to clarify that "most of the violations caused no harm to nursing home patients" or that the deficiencies had been corrected. Doc. 1-4, PAGE ID 257-58.
The court finds that plaintiff has not demonstrated a strong likelihood of success on the merits of its claims under the Deceptive Trade Practices Act. The court is not persuaded at this preliminary stage that plaintiff will be able to establish by clear and convincing evidence that the advertisement has a tendency to deceive a substantial segment of the target audience. In the absence of actual evidence of confusion, plaintiff gives a somewhat strained interpretation to the advertisement's statement that the deficiencies are known to cause severe harm or health deterioration. The advertisement does not claim that the deficiencies found at plaintiff's facility actually did cause such harm, nor is there a suggestion that each and every deficiency carried the same level of risk or seriousness. Rather, a reading of the advertisement that is as plausible as plaintiff's is that the deficiencies for which plaintiff was cited are of a category, type or nature that "are known" to cause harm in some instances. The advertisement is an invitation to those individuals potentially affected to engage legal counsel to help consider whether legally-actionable harm did occur. The court believes that a reasonable member of the target audience would appreciate that the statements were made in the context of an advertisement and would, as the Diamond Co. decision predicts, approach them with a somewhat critical eye.
Plaintiff complains that the advertisement fails to give the underlying facts of the deficiencies. This makes the deficiencies sound worse than they actually were, plaintiff argues. But this argument carries with it the undertone that either plaintiff's conduct did not deserve the citations or that the OBRA Regulations ought to refine how citations are labeled. These are not matters for this court to rectify. Plaintiff concedes that it was in fact given citations for all 23 deficiencies listed in the advertisements; defendant correctly stated the deficiencies and provided a notation to the government website through which defendant found a report of the deficiencies. Regardless of whether some or most of the citations were for technicalities, as plaintiff contends, it did receive the citations and it is plausible to characterize the citations as of the type or nature of deficiencies that are known to cause harm. Indeed, by stating in its brief that "most" of the deficiencies did not involve harm to plaintiff's patients, Doc. 1-4, PAGE ID 257-58, plaintiff appears to acknowledge that harm was caused in at least of few of the cited deficiencies.
Further, the court finds, for purposes of the motion for a TRO, that plaintiff has not established a strong likelihood of showing that the advertisement has a tendency to deceive readers about whether any violations are ongoing. Plaintiff emphasizes that it has corrected all of the deficiencies and has no ongoing violations. But the advertisement does not claim otherwise. The advertisement correctly states that plaintiff "has been" cited and it provides correct notations to the date or dates of each citation. The advertisement does not state that plaintiff has failed to correct any of the deficiencies, nor does the advertisement suggest one way or the other whether plaintiff is committing ongoing violations.
The court's finding that plaintiff has not demonstrated a likelihood of success on the merits alone is sufficient grounds on which to deny the motion for a TRO. Gonzales, 225 F.3d at 625. Even so, the court additionally finds that plaintiff has not demonstrated irreparable injury. Plaintiff argues that the advertisement will cause it to suffer reputational harm in central Ohio. However, the advertisement does not identify plaintiff by name (Heartland of Westerville), but by initials (MCHS) that plaintiff's counsel stated, in the February 13, 2015 conference, were not used by plaintiff. Plaintiff is affirmatively identified in the advertisement only by street address. This is not a situation in which plaintiff's name is being loudly announced in an allegedly defamatory advertisement.
Plaintiff further argues that its goodwill will be impaired "among the local skilled nursing industry, and to Plaintiff's contractual and business relationships." Doc. 1-4, PAGE ID 257. However, these are the audience members most likely to know better — to understand plaintiff's underlying complaint that sometimes the cited deficiencies sound much worse than they really were and to discount the statements made in the advertisement. Absent further evidence on the matter, the court does not believe that the advertisement is likely to cause the irreparable injury suggested by plaintiff.
III. Conclusion
Accordingly, plaintiff's motion for a temporary restraining order is DENIED.
s/ James L. Graham
JAMES L. GRAHAM
United States District Judge DATE: February 16, 2015