Thursday, September 29, 2016

Ad featuring old, mild citations against health facility was false by necessary implication

Heartland of Urbana OH, L.L.C. v. McHugh Fuller Law Group, P.L.L.C., 2016 WL 5375676, 2016 -Ohio- 6959, No. 2016–CA–3 (Ct. App. Sept. 23, 2016)

Heartland appealed from summary judgment granted to McHugh in Heartland’s deceptive trade practices case against McHugh, and the court of appeals reversed, finding that the relevant ad was false by necessary implication and that injury was presumed because the ad targeted Heartland.

In 2014, McHugh published a full-page ad and online ad in the Urbana Daily Citizen newspaper that discussed Heartland, a skilled nursing care facility located in Urbana, Ohio. The ad contained a picture of Heartland’s facility in Urbana, and stated:

The government has cited HEARTLAND OF URBANA NURSING AND REHABILITATION CENTER for failing to provide necessary care and services to maintain the highest well-being of each resident. If you suspect that a loved one was NEGLECTED or ABUSED at Heartland of Urbana, call McHugh Fuller today! Has your loved one suffered?
Broken Bones
Unexplained Injuries

“Attention,” “Neglected or Abused,” and “Death,” were in red, bold type. “Cited” was also underlined in red.

In fact, Heartland had not had a citation of any kind for over two years, and had not had a citation remotely similar to the one alleged in the advertisement since June 24, 2010, more than four years previously. Even the June 2010 citation did not cause harm to any nursing home patient, and the deficiencies had been corrected in June 2010.  Under Federal standards, violations are assessed by letters ranging from “A” to “L,” with “L” being the most severe. “J,” “K,” or “L” violations mean that a nursing facility is in immediate jeopardy, and is in risk of being cut-off from Medicare reimbursement. The particular violations on June 24, 2010 were only “E” and Level 2 violations, “which, at worst, contemplate only minimal physical discomfort and the potential to undermine a given resident’s ability to maintain or reach his or her highest practicable well-being, in light of definitions of that resident’s plan of care.”

According to Heartland, “negligence, abuse, bedsores, broken bones, unexplained injuries, and death” would have Level 4 severity. By contrast, three matters that were involved in the June 24, 2010 citation, were: a failure to document and administer laxatives prescribed for constipation; a failure to timely reassess abdominal pain for 18 hours; and a failure to apply prescribed antibiotic for two weeks after a physician had ordered a culture.

Subsequently, the legislature amended state law to prohibit the use of the results of an inspection or investigation of a home in an ad unless the ad included:

(i) The date the inspection or investigation was conducted;
(ii) A statement that the director of health inspects all homes at least once every fifteen months;
(iii) If a finding or deficiency cited in the statement of deficiencies has been substantially corrected, a statement that the finding or deficiency has been substantially corrected and the date that the finding or deficiency was substantially corrected;
(iv) The number of findings and deficiencies cited in the statement of deficiencies on the basis of the inspection or investigation;
(v) The average number of findings and deficiencies cited in a statement of deficiencies on the basis of an inspection or investigation conducted under this section during the same calendar year as the inspection or investigation used in the advertisement;
(vi) A statement that the advertisement is neither authorized nor endorsed by the department of health or any other government agency.

Query: what are the First Amendment implications of this rule?

The trial court found that this legal change had mooted Heartland’s claim.  The court of appeals reversed, because if McHugh willfully violated the state Deceptive Trade Practices Act, Heartland would be entitled to attorneys’ fees.

Ohio courts follow the Lanham Act in interpreting the DTPA.  The court of appeals found the ad false by necessary implication.  “When the advertisement was published, McHugh, a law firm, would have known that any claims based on the June 24, 2010 citations were barred due to the statute of limitations.”  McHugh also had access to information that Heartland wasn’t cited in 2012 or 2014, and that none of the 2010 citations related to harm to residents. “[T]he only reasonable conclusion is that the advertisement falsely implied Heartland was a facility where patients were being exposed to very dangerous conditions, including death,” which justified a finding of intent to deceive consumers.

In noncomparative advertising, plaintiffs must show causation and harm, but a material, misleading comparison to a specific product necessarily causes harm to the target, relieving the target of its burden of separately showing causation and harm.  The court of appeals applied this rule here, to the broader category of “misleading advertisements identifying a specific party,” although the ad wasn’t comparative. The court of appeals did say that the presumption of causation and injury was rebuttable.

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