Congress of California Seniors v. Catholic Healthcare West

Hospitals, doctors and others who provide services to Medicare beneficiaries are reimbursed based in part upon annual cost reports filed by the providers to conform to the Medicare statute and a variety of federal rules and regulations. Those cost reports are at the heart of this case, in which the primary plaintiff is a union and the primary defendant is a hospital at which there appears to be an ongoing effort to unionize the hospital’s employees. The union claims the hospital has included in its annual cost reports certain “anti-union” expenses that the union says are not allowable under federal law. For relief, the union wants a declaration that the hospital’s conduct constitutes an unfair business practice within the meaning of section 17200 of the Business and Professions Code, an accounting of the hospital’s “expenditures on activities to influence employees regarding unionization and of the impact of such expenditures on payments received” by the hospital under the Medicare program, and an injunction compelling the hospital to disgorge all money it has acquired by means of any unlawful business practice.

The issue is preemption. Our conclusion is that the field…