[00:00:05] Speaker 03:
Good morning.

[00:00:07] Speaker 03:
May it please the court, I would like to reserve five minutes for my rebuttal.

[00:00:12] Speaker 03:
OK, please watch the clock.

[00:00:18] Speaker 03:
I'm sorry.

[00:00:19] Speaker 03:
That's it, Your Honor.

[00:00:21] Speaker 03:
OK, thank you.

[00:00:25] Speaker 03:
The district court abused its discretion when it denied the leave to amend my client's

[00:00:34] Speaker 03:
causes action for unfair business practices, amongst other things, because my clients have shown standing.

[00:00:46] Speaker 03:
And standing for the purposes of unfair business practices post Proposition 64 in California is clarified by California Supreme Court in Kwikset case.

[00:01:01] Speaker 03:
It can be shown by numerous ways.

[00:01:04] Speaker 03:
And the amended complaint, first amended complaint, clearly stated at least several ways that my clients have suffered economic harm as a result of unlicensed medicine scheme perpetrated by Luana Murphy

[00:01:24] Speaker 05:
But let me ask you a question about the procedural history here, because didn't your clients move to remand the state law claims?

[00:01:35] Speaker 05:
And the district judge didn't grant that.

[00:01:38] Speaker 05:
The district judge actually ended up ruling, I think it was either on a motion to dismiss or a motion for judgment on the pleadings.

[00:01:45] Speaker 05:
Is that what happened?

[00:01:46] Speaker 03:
No, Your Honor, she did grant the request to remand.

[00:01:50] Speaker 03:
We did dismiss last remaining federal claim under Rehab Act and the case was remanded.

[00:01:57] Speaker 03:
So the court declined to exercise jurisdiction on the state claim.

[00:02:02] Speaker 03:
But our Fair Business Practices and the claim under Disabled Person Act was dismissed

[00:02:10] Speaker 03:
prior to the second round of motions to dismiss and request and a court declining to exercise jurisdiction.

[00:02:19] Speaker 03:
So there is one.

[00:02:21] Speaker 05:
Yes.

[00:02:21] Speaker 05:
I see.

[00:02:21] Speaker 05:
So what's preventing you then from taking that issue back up again in California State Court?

[00:02:30] Speaker 03:
That's exactly what I'm trying to tell.

[00:02:33] Speaker 03:
But of course, my opponents, who are three of them here, saying that there is a collateral estoppel.

[00:02:39] Speaker 03:
and a court ruling prevents us from going back and re-alleging same claims.

[00:02:46] Speaker 03:
I did attempt that.

[00:02:48] Speaker 03:
Obviously, we met and confer.

[00:02:51] Speaker 03:
And their position is that I can't.

[00:02:53] Speaker 03:
But I do agree 100% with Your Honor that the fact is this is an interim ruling.

[00:03:02] Speaker 03:
a declination of jurisdiction by the federal court, we can reallege the same claim.

[00:03:09] Speaker 03:
The other side is arguing, well, it dismissed with prejudice, therefore it's collateral estoppel.

[00:03:15] Speaker 03:
So it opens up another appeal.

[00:03:17] Speaker 01:
I'm not sure though, counsel, why you don't want to take this battle up in state court.

[00:03:21] Speaker 01:
So what is it that you want us to do here?

[00:03:24] Speaker 01:
Send it back on the UCL claim because of the allegation of injunctive relief?

[00:03:28] Speaker 01:
That's one of the arguments raised in the brief.

[00:03:30] Speaker 01:
Correct.

[00:03:31] Speaker 01:
And it's an allegation that we... But I'm looking at the complaint, and other than a passing reverence to injunctive relief, you don't allege a request for injunctive relief, setting aside a problem with standing, which I think is a pretty serious problem, but you don't allege a claim for injunctive relief in the prayer for relief.

[00:03:48] Speaker 01:
That was not the thrust of the complaint at all.

[00:03:52] Speaker 01:
And to send it back on that, I'm just not sure what you're hoping to accomplish with that.

[00:03:56] Speaker 03:
I am hoping to accomplish a reversal on the ground that it was a piece of discretion not to allow even one amendment and I can point your honor where we have at least claim for restitution relief because the.

[00:04:09] Speaker 03:
paragraph, and I can tell you it's on a page 15 where my clients describe the practice of, it's on a page 15 paragraph 60 to 63 titled, Exodus's predicate practice of withholding patient's record, which is contrary to the state and federal law.

[00:04:29] Speaker 03:
that one medical facility cannot do that.

[00:04:32] Speaker 02:
But the district court didn't see any grounds for restitution.

[00:04:35] Speaker 02:
He said it was for the death of the son, and there was nothing there.

[00:04:40] Speaker 02:
It was just damages.

[00:04:41] Speaker 02:
What is restitutionary?

[00:04:43] Speaker 02:
So what did the illegal practices, what money did they take from your client?

[00:04:49] Speaker 03:
So one example of illegal practice which caused the economic harm is that it, and I described in length in my complaint,

[00:04:58] Speaker 03:
that it's a pattern and practice of this facility entity as whole.

[00:05:02] Speaker 03:
What they do, they withhold medical records forcing a patient's family to go file a lawsuit in order to get that, to incur attorney fees, to incur court fees, process serving fees.

[00:05:14] Speaker 03:
So this is on its own.

[00:05:16] Speaker 03:
It's a concrete injury that my client suffered

[00:05:19] Speaker 03:
As a result of this fraudulent, well, predicate scheme or unfair scheme, the scheme is basically centers around Luana.

[00:05:28] Speaker 03:
So would the injunction be to provide the medical records?

[00:05:32] Speaker 03:
The injunction is prohibiting them denying deceased patients or patients' families who have right to obtain medical records.

[00:05:42] Speaker 03:
because their son is deceased.

[00:05:43] Speaker 02:
I have one more question.

[00:05:44] Speaker 02:
I know you want to save some time, but we asked you also to brief Article 3 standing because the complaint didn't allege there's a threat of the same injury in the future to your clients.

[00:05:58] Speaker 02:
What's your position on that?

[00:06:00] Speaker 03:
My position, I understand the court's position that my client's son is deceased, but the entity operates and continues operation.

[00:06:10] Speaker 03:
We're a small boutique firm.

[00:06:11] Speaker 03:
This is the second case we have.

[00:06:13] Speaker 03:
With them, were they doing same thing, withholding medical records, forcing the lawsuit just to obtain the records, one patient ended up

[00:06:23] Speaker 03:
committing suicide, hanging himself right in the facility.

[00:06:26] Speaker 03:
Second one was discharged.

[00:06:28] Speaker 03:
All it is is this individual who's not even a physician has this lucrative contract.

[00:06:34] Speaker 02:
You're not alleging that your client has Article III standing.

[00:06:37] Speaker 02:
You're saying that if there was a class action, there might be Article III standing.

[00:06:43] Speaker 03:
Under private attorney general, yes, we would have Article 3 standing because they still continue their practice as of today and obviously one thing that

[00:06:54] Speaker 03:
the court could enjoin state court can to join is by issuing injunction and I believe that the fact that we have at least made a colorable showing through the pleadings I understand that Explicitly your honor within state we want the injunctive relief to this this this but we did state particularized elements of harm such as forced to file a lawsuit incur attorney fees and

[00:07:19] Speaker 03:
to obtain the records or funeral expenses.

[00:07:22] Speaker 03:
Those are what type of harm if a district court had a problem with that, surely we were entitled to have leave to amend.

[00:07:30] Speaker 03:
And eventually we wanted out of that jurisdiction, but at least we would not run into now long running problem of state court

[00:07:42] Speaker 03:
taking a position, which is it's easy way out when they do that frequently, that it's a collateral estoppel.

[00:07:48] Speaker 03:
But I agree.

[00:07:48] Speaker 03:
It's interim ruling.

[00:07:50] Speaker 03:
It should have been a collateral estoppel.

[00:07:52] Speaker 03:
And we should have had the right to reallege the same claims in a state court upon courts declining to exercise jurisdiction.

[00:08:01] Speaker 03:
We'll save time for rebuttal.

[00:08:03] Speaker 02:
Thank you.

[00:08:05] Speaker 02:
We'll hear from the other side.

[00:08:17] Speaker 00:
Good morning.

[00:08:18] Speaker 00:
May it please the court, my name is Raymond Wilson, and I represent Exodus Recovery, Exodus Foundation, and Luana Murphy, along with my co-defendants council.

[00:08:28] Speaker 00:
We're here to argue today.

[00:08:30] Speaker 00:
I would like to take seven minutes of our ten.

[00:08:35] Speaker 00:
My co-counsel, David Pruitt, will take the final three.

[00:08:44] Speaker 00:
I think that the court was right in focusing on the lack of Article 3 standing.

[00:08:52] Speaker 00:
District Court did a very good job of walking through California law on the Unfair Competition Act and in determining that there was no injury in fact under California law than finding because there's no injury in fact.

[00:09:11] Speaker 01:
The lack of Article 3 standing was not the basis of the District Court's dismissal.

[00:09:16] Speaker 01:
Do we decide that in the first instance or do we send it back for the District Court to reach that question?

[00:09:22] Speaker 00:
I think that you can decide that on the first instance when looking at a dismissal, the court looks at that de novo and can look into the law as it's presented on the record and determine that it should not be sent back.

[00:09:41] Speaker 02:
Well, assuming we think the complaint did request injunctive relief, and there's certainly a couple of paragraphs on that, even if it's not in the prayer for relief, why would the court not have Article III standing for that?

[00:09:55] Speaker 02:
That seems to be enough for UCL standing.

[00:09:58] Speaker 00:
I think that if the court looks at the record, it's quite clear that there is not standing for injunctive relief in this case.

[00:10:08] Speaker 00:
As the United States Supreme Court recently decided in the Murthy case, there must be particularized risk of injury to each plaintiff

[00:10:20] Speaker 00:
in the matter in a looking forward or a going forward basis for injunctive relief.

[00:10:26] Speaker 00:
Neither living plaintiff in this case has shown in the original first amended or second amended complaint at the district court that they suffered or expect to suffer any injury going forward in this matter that would entitle them to injunctive relief.

[00:10:47] Speaker 00:
Insofar as the decedent is concerned,

[00:10:50] Speaker 00:
Looking forward, there is no risk of continuing ongoing harm of the same nature because he is deceased, much as the district court decided in the ADA claim.

[00:11:03] Speaker 05:
And then particularly here with these plaintiffs, they don't have any further exposure to your client going forward.

[00:11:13] Speaker 00:
That is correct.

[00:11:14] Speaker 00:
The two surviving plaintiffs are not deaf.

[00:11:17] Speaker 00:
They're not mentally disturbed, so they're not going to be seeking the care of a mental crisis center, let alone our mental crisis center, Exodus.

[00:11:26] Speaker 05:
Now, can you address opposing counsel's statement that it's your client's position that if this were to go down to California State Court, that defendants would assert a collateral estoppel argument on the UCL claim?

[00:11:43] Speaker 00:
Yes, and I think this goes to the first part of the appellant's briefing to your honors, and that is that it's not an interim order.

[00:11:55] Speaker 00:
The order that the district court found when ruling on our 12b6 motion for the first minute complaint, they had proper jurisdiction for two federal questions and then supplemental jurisdiction over the state law claims.

[00:12:13] Speaker 02:
But because they allowed amendment of the complaint, the initial ruling at least on the DPA and UCL claims were interim or interlocutory.

[00:12:25] Speaker 00:
That is correct.

[00:12:27] Speaker 00:
And the plaintiff's counsel did amend and filed a second amended complaint.

[00:12:34] Speaker 00:
They thereafter asked the court to not take up supplemental jurisdiction when they chose not to amend the sole remaining federal claim under the Rehabilitation Act.

[00:12:48] Speaker 02:
So then the UCL and DPA claim merged into the final dismissal?

[00:12:55] Speaker 00:
Is that your position?

[00:12:56] Speaker 00:
That is our position.

[00:12:57] Speaker 02:
Okay.

[00:12:58] Speaker 02:
And so then it would be that the dismissal would be binding on the state court.

[00:13:04] Speaker 00:
That is correct.

[00:13:04] Speaker 00:
It is our position that upon the dismissal following the second amended complaint and our second 12b6 motion that the two orders merged.

[00:13:18] Speaker 05:
Well, and even in state court, my understanding is that the California Supreme Court imputes Article III standing principles to UCL.

[00:13:28] Speaker 05:
Is that not correct?

[00:13:29] Speaker 00:
That is correct.

[00:13:30] Speaker 00:
In all of the jurisprudence, looking at the UCL Article 3 standing is very important.

[00:13:34] Speaker 00:
The California Supreme Court has laid out a way of thinking about the UCL in that the causes or actions that may constitute an unfair practice

[00:13:49] Speaker 00:
is quite broad, but the remedies are very, very narrow.

[00:13:53] Speaker 00:
Really, it's only restitution, the return of ill-gotten gains, or injunctive relief.

[00:13:58] Speaker 00:
And I believe that we have briefed and have argued in our papers that plaintiffs in this case have neither.

[00:14:08] Speaker 00:
Restitutionary damages, standing for restitutionary damages or standing for injunctive relief.

[00:14:16] Speaker 02:
The opposing counsel argued that return of medical records or the expenses that incurred due to withholding of medical records was a form of restitutionary relief.

[00:14:29] Speaker 02:
Can you address that?

[00:14:31] Speaker 00:
Yes.

[00:14:33] Speaker 00:
The California Supreme Court has indicated, and I believe it's in the Korea Supply case, but I do not know that for certain, that once you have filed a lawsuit,

[00:14:44] Speaker 00:
to enforce any of your damages, that that is not restitutionary and that's not recoverable under the UCL.

[00:14:53] Speaker 00:
As I'm coming up on my time, I don't want to eat into my co-counsel's time.

[00:14:56] Speaker 00:
Thank you very much, Your Honors.

[00:15:10] Speaker 04:
Good morning, honorable judges.

[00:15:12] Speaker 04:
David Pruitt on behalf of defendant Dr. William Worshing.

[00:15:20] Speaker 04:
So I just want to recount the procedural history since Judge Liberty asked about it in particular.

[00:15:29] Speaker 04:
And the way it happened is that there was a motion dismissed that was granted

[00:15:33] Speaker 04:
And then when plaintiff amended, despite asking for the opportunity to amend the Rehabilitation Act, the only thing that they asked to amend, they did not address the 17200 claim at or argument at all.

[00:15:47] Speaker 04:
Only after they had the opportunity to amend, they didn't reassert any federal claim.

[00:15:53] Speaker 04:
And then they moved, the plaintiff they being, to ask the court to decline supplemental jurisdiction.

[00:15:59] Speaker 04:
The district court did so, entered judgment accordingly.

[00:16:03] Speaker 04:
And therefore, as a result of that sequence of events, the 17200 claim was necessarily decided.

[00:16:10] Speaker 04:
It was an interim ruling, which became a final determination when there was a final determination

[00:16:17] Speaker 04:
made by the district court.

[00:16:19] Speaker 04:
And although it was a state law claim at the time, the district court clearly had jurisdiction because it was supplemental jurisdiction at that time.

[00:16:30] Speaker 04:
And the court had the authority to make a determination relative to that claim.

[00:16:36] Speaker 04:
There have been some things said about injunctive relief in medical records.

[00:16:43] Speaker 04:
I think that those are new theories.

[00:16:44] Speaker 04:
I don't think that they were addressed below.

[00:16:47] Speaker 04:
I know they weren't addressed below and I don't recall them.

[00:16:50] Speaker 04:
being addressed in the briefing, but I will point out that under California law, the California Medical Information Act, Civil Code 56 at SEC, provides for a process by which someone gets medical records.

[00:17:05] Speaker 04:
That includes paying for them.

[00:17:08] Speaker 04:
So this idea that you have to pay to get medical records is not a form of injury that would

[00:17:14] Speaker 04:
Uh, fill a void in this particular case.

[00:17:17] Speaker 04:
In addition, and again, I don't believe that the plaintiff actually addressed these issues, so I'm going to respond to them in kind.

[00:17:27] Speaker 04:
The California Court of Appeal, in a very well-respected decision, Carter v. Paradise Valley Hospital, decided

[00:17:36] Speaker 04:
that when a plaintiff claims a post-injury failure to provide records or failing to document records, that's not an injury.

[00:17:46] Speaker 04:
It's not an injury in any sense.

[00:17:48] Speaker 04:
Because when someone goes to hear a medical provider and they seek medical services, after they have ceased receiving those medical services, the things that occur after that are not damaging from the services.

[00:18:04] Speaker 04:
So I want to make that point.

[00:18:06] Speaker 04:
Another thing that the plaintiff has sort of thrown in here over and over again that we address below and is in the motion for judgment on the pleadings on behalf of Dr. Wersching is, Pegham v. Herdrich, the United States Supreme Court, decided that

[00:18:26] Speaker 04:
When there's an issue of whether there's financial incentives involved, the check on that is the standard of care.

[00:18:33] Speaker 04:
It is what is the medical standard of care?

[00:18:36] Speaker 04:
What does a physician have to do to be in compliance with the obligation to use reasonable judgment in the provision of care?

[00:18:46] Speaker 04:
And that's at PGRM 530 US 211 at 218 to 219.

[00:18:52] Speaker 02:
Your time is used up, so please wrap up.

[00:18:55] Speaker 04:
Thank you.

[00:18:56] Speaker 04:
I appreciate that opportunity.

[00:18:58] Speaker 02:
All right, thank you.

[00:19:01] Speaker 03:
You have a couple of minutes for rebuttal.

[00:19:04] Speaker 03:
Thank you.

[00:19:04] Speaker 03:
First, misstatement of law, and council just said that

[00:19:10] Speaker 03:
California UCL law restricts the relief only standing only to claims for valid restitutionary relief.

[00:19:21] Speaker 03:
That's not true.

[00:19:22] Speaker 03:
Absolutely wrong.

[00:19:23] Speaker 03:
And this is post Prop 64.

[00:19:26] Speaker 03:
California Supreme Court ruled that

[00:19:30] Speaker 03:
standing for purposes UCL and false advertising law is not dependent on whether plaintiff can state a valid claim for restitutionary relief.

[00:19:39] Speaker 03:
Clayworth versus Pfizer in 2010, California Supreme Court ruled.

[00:19:44] Speaker 03:
Quickset Corporation versus Superior Court, that's a California Supreme Court ruling, specifically said, we hold ineligibility for restitution is not a basis for denying standing

[00:19:58] Speaker 03:
under Section 172.04 and disapprove those cases that have concluded otherwise.

[00:20:05] Speaker 03:
So that's the first misstatement of law.

[00:20:07] Speaker 05:
What's the flip side of that?

[00:20:09] Speaker 05:
If restitution isn't a necessary prerequisite, what is?

[00:20:14] Speaker 05:
It's injunctive relief, right?

[00:20:18] Speaker 03:
It's all kind of harm, and they described, for example,

[00:20:21] Speaker 03:
how plaintiff can show the economic injury.

[00:20:25] Speaker 03:
So that gets us to the Article III standing.

[00:20:28] Speaker 02:
Okay.

[00:20:28] Speaker 02:
So if the only thing left is injunctive relief, how do you show Article III standing for that?

[00:20:34] Speaker 03:
We have, and so there are two aspects of this case.

[00:20:39] Speaker 03:
If plaintiffs were not able to show Article III standing, that the court had to void its order or at least

[00:20:46] Speaker 03:
We have to be allowed to go back to the state court because the standards are different.

[00:20:51] Speaker 03:
We don't need Article III standing in a state court.

[00:20:54] Speaker 02:
In a state court, that's the quotes you're reading from the California Supreme Court adopted Article III standing principles for standing under the UCL.

[00:21:05] Speaker 03:
Not exactly.

[00:21:07] Speaker 03:
It basically states here, the California Supreme Court states that there are innumerable ways in which economic injury

[00:21:16] Speaker 03:
from unfair competition may be shown.

[00:21:19] Speaker 03:
Plaintiff may surrender transaction, acquire transaction less, have a present or future property interest diminished, deprived of money or property to which he has cognizable interest.

[00:21:29] Speaker 03:
And there are so many ways.

[00:21:32] Speaker 03:
It's very broad because it has really, the policy is remedial.

[00:21:39] Speaker 03:
I think we have your argument.

[00:21:40] Speaker 03:
You're over time now.

[00:21:41] Speaker 03:
And one more minute.

[00:21:42] Speaker 02:
Please wrap up.

[00:21:43] Speaker 03:
Yes, one more minute.

[00:21:44] Speaker 02:
No, you don't have one more minute.

[00:21:46] Speaker 03:
Please wrap up.

[00:21:48] Speaker 03:
I will.

[00:21:50] Speaker 03:
Paragraph 62 states that contrary to, in a violation of evidence code 1158, the records were withheld.

[00:21:58] Speaker 03:
It's one thing to pay for records.

[00:22:00] Speaker 03:
It's another thing to have to pay for a lawyer to file a lawsuit

[00:22:04] Speaker 03:
to enforce California Evidence Code 1158.

[00:22:07] Speaker 03:
And that's exactly what defendants force my clients to do.

[00:22:11] Speaker 03:
Thank you.

[00:22:11] Speaker 03:
OK, thank you.

[00:22:13] Speaker 03:
The case of Wright versus Exodus Recovery Incorporated is submitted.