law firm raises significant 1A questions over nursing home-specific advertising law

Wilkes & McHugh, P.A. v. LTC Consulting, L.P., —
S.E.2d —-, 2019 WL 2570982 (Ga. Jun. 24, 2019)
Georgia revised its anti-SLAPP law to be more like
California’s (though apparently without the exception for commercial
advertising) and the state supreme court here interprets the revised version
for the first time, sending the case back to the trial court for some actual
findings about whether the law at issue violates the First Amendment.
LTC Consulting sued law firm Wilkes & McHugh, P.A. and
one of its attorneys for violations of a Georgia statute governing nursing
home-related advertising, deceptive trade practices, and false advertising
after the defendants ran full-page advertisements in local newspapers targeting
patients of plaintiffs’ nursing homes.
The ads arose “from acts that could reasonably be construed
as acts in furtherance of the defendants’ right of free speech under the United
States Constitution in connection with an issue of public interest or concern,”
triggering the anti-SLAPP law and shifting the burden to the plaintiffs to
establish that there was a probability that they would prevail on their claims.
But “the parties and the trial court overlooked certain preliminary questions,
which also have not been adequately briefed here.” Specifically, the trial
court thought plaintiffs had sufficiently shown a likelihood of success on
violation of the nursing home advertising law, but that law itself (1) might
not cover defendants’ ads (though it sure looks like it would) and (2) might be
unconstitutional if it did.  Those issues
had to be resolved before likelihood of prevailing could be assessed. Back to
the trial court they go!
I’m much more interested in the underlying First Amendment
question than the anti-SLAPP part.  Defendants
ran ads referring to specific nursing homes and to the results of one or more
legally required government “surveys,” or inspections, of the nursing home
named in the ad.  Each ad stated across
the top in a large font and all capital letters, “THIS IS A LEGAL
ADVERTISEMENT,” followed by a larger, reverse-background stripe stretching all
the way across the page and containing the contrasting words “IMPORTANT NOTICE”
in a still larger font.
The ads stated, “If your loved one has been a resident at” [nursing
home name/address, with the name very large], “[t]his facility has been cited
for multiple deficiencies* including” multiple paragraphs, each beginning with
the word “FAILURE.” The text “purported to recount the deficiencies for which
each nursing home had been cited in a government survey conducted on one or
more dates listed. The text also stated the date by which each deficiency was
corrected and described the level of harm from each deficiency and the number
of residents affected.” Then there was a “densely worded” asterisked paragraph
“that, among other things, said that the ads were not authorized or endorsed by
any government agency, provided information on the survey process and average
numbers of cited deficiencies at nursing homes in Georgia and in the United
States, and listed a government website where those interested could find
additional information.”  The ad then
said, in large font, “POOR CARE AND UNDERSTAFFING CAN LEAD TO: BEDSORES,
CHOKING, FALLS, BROKEN BONES, DEHYDRATION, INFECTIONS/ SEPSIS, MALNUTRITION, OR
UNEXPLAINED DEATH” and solicited people with loved ones who were residents to
contact defendants.
Plaintiffs alleged that 91% of nursing homes surveyed are
found to have “deficiencies” and that the defendants did not include in the ads
all the information required by the law, and also that the ads deceptively
omitted important facts and falsely implied that residents of the plaintiffs’
nursing homes had suffered “BEDSORES,” “BROKEN BONES,” and “DEATH” from the
cited deficiencies. One ad allegedly falsely stated that four of the
deficiencies “constituted minimal harm or the potential for actual harm,” when
in reality those four deficiencies were cited at the “D” level, meaning that
there was no actual harm.
Plaintiffs alleged violation of OCGA § 31-7-3.2’s recently
enacted subsection (j), which imposes limitations on advertisements that use or
reference the results of federal or state surveys or inspections of nursing
homes, as well as Georgia’s Uniform Deceptive Trade Practices Act and two state
false advertising statutes, one specific to ads for legal services.  The trial court granted a TRO, which enjoined
the defendants from publishing “any false, fraudulent, deceptive and misleading
advertisements concerning the Plaintiffs”; the existing ads, and other ads not
complying with the nursing home-specific law.
The nursing home law says:
(j)(1) The results or findings of a
federal or state survey or inspection of a nursing home facility, including any
statement of deficiencies or reports, shall not be used or referenced in an
advertisement or solicitation by any person or any entity, unless the
advertisement or solicitation includes all of the following:
(A) The date the survey was
conducted;
(B) A statement that the Department
of Community Health conducts a survey of all nursing home facilities at least
once every 15 months;
(C) 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;
(D) The number of findings and
deficiencies cited in the statement of deficiencies on the basis of the survey
and a disclosure of the severity level for each finding and deficiency;
(E) The average number of findings
and deficiencies cited in statements of deficiencies on the basis of surveys
conducted by the department during the same calendar year as the survey used in
the advertisement;
(F) A disclosure of whether each
finding or deficiency caused actual bodily harm to any residents and the number
of residents harmed thereby;  and
(G) A statement that the
advertisement is neither authorized nor endorsed by any government agency.
(2) In addition to any other
remedies and damages allowed by law, a party found to have violated paragraph
(1) of this subsection shall be liable for attorney fees and expenses of
litigation incurred in an action to restrain or enjoin such violation;  provided,
however, that damages, attorney fees, and expenses of litigation shall not be
recoverable against any newspaper, news outlet, or broadcaster publishing an
advertisement or solicitation submitted by a third party for a fee.
RT: The newly enacted provision is pretty clearly enacted to
protect nursing homes against negative reputational consequences from
surveys/inspections, and I understand why—no one likes dirty laundry aired, and
it is also the case that things labeled deficiencies might not necessarily be
all that bad—risky, or diagnostic of imperfect procedures, which is itself not
a great thing but may be common enough that no nursing home could expect to be
above reproach. And one might further conclude that consumers are likely to
overweight officially reported deficiencies compared to their actual
seriousness—but that conclusion will have a hard time weathering current First
Amendment scrutiny.  Doing this as a
disclosure regime helps, but courts vary in the degree of rigor with which they
evaluate how burdensome a disclosure like this can be. I wonder if the
regulators could instead relabel minor deficiencies as “concerns” (or, heck,
“fizzbins”), leaving the same regulatory consequences (if you don’t remediate
concerns sufficiently, you can lose your license, etc.) without requiring as
much regulation of advertising.
Anyway, lawyer advertising has some First Amendment
protection, and “the alleged existence of serious injuries and deaths at local
nursing homes resulting from deficiencies known to a government agency
certainly qualifies as a public issue or an issue of public concern. Thus,
running the ads could reasonably be construed as an act in furtherance of the
defendants’ constitutional right of free speech in connection with a public
issue or an issue of public concern,” so the anti-SLAPP law’s threshold
requirements had been met.  Plaintiffs were
thus required to demonstrate that their claims were both legally sufficient and
supported by a sufficient prima facie showing of facts to sustain a favorable
judgment if their evidence is credited. In doing that, the plaintiffs’ evidence
is accepted as true, and the defendants’ evidence is evaluated only to
determine if it defeats the plaintiffs’ showing as a matter of law.
The trial court said only that plaintiffs demonstrated a
probability of prevailing “by submitting a verified complaint citing to the
Georgia statute limiting the use of survey data and by prevailing on their
temporary restraining order on the same issue before this Court.”  The transcript revealed no further
explanation. That wasn’t enough.  First,
the court thought that the law establishing Georgia’s regulatory framework for
hospitals and related institutions was “an unlikely place to find a statute
regulating attorney advertising” and might contemplate enforcement only by the
AG, not private parties.  “If the most
natural reading of the statutory text is that the cited statutes do apply to
the defendants’ ads, there is a constitutional separation of powers issue that
might require reading them not to apply. There is also a significant First
Amendment issue with respect to the application of each statute here,” which
wasn’t adequately addressed. Given that “the particular claims at issue in this
case implicate complex and important questions of statutory interpretation and
constitutional law,” the trial court should go back and do that.

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