Predatory legal advertising: How nursing homes can respond

“Attention! If you suspect that a loved one was neglected or abused at ABC Nursing Home, call the lawyers at XYZ Law Firm today!”

Attention-grabbers like the one above scream out from highway billboards and full-page ads in local newspapers. They are ubiquitous on the Internet and on television. But, at what point does advertising by a law firm that “specializes” in “nursing home negligence” cross the line and become misleading and deceptive? This article attempts to suggest ways of dealing with ads that are predatory, deceptive and unlawful.

What is a predatory advertisement?

There is a yawning chasm between a legitimate advertisement by a lawyer or law firm and a predatory advertisement that casts a wide net, hoping to draw in potential clients with its deceptive and misleading wording. The definition of predatory, in part, is “inclined or intended to injure or exploit others for personal gain or profit.” Specific examples of predatory advertising are addressed below.

An advertisement claimed a nursing home “FAILED to provide care for residents in a way that keeps or builds each resident’s dignity and respect for individuality.” However, the surveyors did not allege a “failure” to provide care to residents. In addition, the basis for the ad was survey allegations that were almost four years old.

Ads that rely on old information and deceptive wording are often followed by statements such as “These deficiencies are known to cause severe injury, health deterioration, bed sores and even death.” However, the conclusory statement above is a non sequitur. It does not follow that just because a deficiency might have been cited, a resident has been or is likely to be harmed. In fact, the specific F-tags cited in the survey had no relationship to the speculative harm in this instance.

Another tactic used in some ads is the inclusion of statements like this: “Poor care and understaffing can lead to bed sores, choking, falls, broken bones, dehydration, infections/sepsis, malnutrition or unexplained death.” While the statement is true in a vacuum, the operative term is “can lead to.” The statement is speculative and doesn’t acknowledge that some pressure ulcers and some falls are unavoidable despite a facility’s best efforts—a fact even the Centers for Medicare & Medicaid Services recognizes.

Surveyors cite more than 90 percent of nursing homes with deficiencies. Thus, deficiencies are the norm, not the exception. Under the federal regulatory scheme, they are graded according to their scope and severity, which can range from an isolated instance of the potential for more than minimal harm (not even a small bruise, just the “potential”) to widespread “immediate jeopardy” (serious harm has occurred or is likely to occur in the very near future).

Impact of predatory ads on nursing homes

Litigation involving nursing homes has grown exponentially over the past two decades. It has become a cash cow for some law firms. Multimillion-dollar verdicts are not unusual. A few years ago, a jury in West Virginia returned a verdict of $91 million, subsequently reduced to about $32 million, against a nursing home. Similarly, a California jury returned a verdict of $29 million, and a Florida jury returned a verdict of $110 million in compensatory damages and $1.0 billion in punitive damages.

In addition to these cases, class action suits against nursing homes have resulted in huge settlements. For example, one of the largest nursing home chains settled a class action suit for $62.8 million on behalf of the class of residents.

Apart from multimillion-dollar verdicts, nursing homes that have adverse jury verdicts or settle cases often have increased insurance premiums, suffer public relations consequences and experience demoralized staff. Some operators have chosen not to operate in those states where the legal climate is so unfavorable.

Patrick Kelly, President and CEO of the West Virginia Health Care Association, says, “Misleading ads damage staff morale. Our employees work hard and are very dedicated. They don’t deserve public humiliation. They should be thanked for the good work they perform. Misleading ads offend both the staff and the residents who call the facility home. Families struggle finding the right option for their family members. Misleading ads only make their struggle greater.”

A tactic used by lawyers in some states is to offer the Statement of Deficiencies (CMS Form 2567) as evidence of negligence per se. In response, many state legislatures have precluded the use of a Statement of Deficiencies as automatically establishing the tort of negligence per se.

Responding to predatory advertising

A nursing home has a number of arrows in its quiver if it chooses to challenge a predatory and deceptive advertisement.

Federal Lanham Act

When a law firm purposefully misrepresents the nature of deficiencies cited in a survey and omits essential information from its advertisements that is likely to deceive the public and cause significant financial and reputational harm to a nursing home, such a deceptive advertisement may be a violation of the Lanham Act. Federal courts may issue an injunction against the offending and unlawful advertisement, thereby halting and removing them.

In order to be successful at a Lanham Act claim, a nursing home must prove the existence of the following: (1) a false or misleading statement of fact that (2) is used in a commercial advertisement that (3) deceives or is likely to deceive consumers in a material way (4) that has caused injury to the plaintiff (e.g., diminished admissions, increased staff turnover and/or loss of “good will”).

State Deceptive Trade Practices Acts

A violation of a state’s deceptive trade practices act may lead a court to issue a restraining order against the law firm placing a deceptive ad. Seeking a temporary restraining order is an extraordinary remedy. In order to prevail on deceptive trade practices, courts typically require a showing that the advertisement contained a false or misleading statement, a substantial segment of the target audience has been or will be deceived, the deception is likely to influence a purchasing decision and the complaining party has been or is likely to be injured as a result.

A potential risk involved with seeking a restraining order is that if the court disagrees with the nursing home, the adverse publicity may hinder rather than help the facility’s goal of promoting a positive image. An alternative or additional measure to seeking a restraining order would be for a facility to take out an advertisement rebutting claims in the law firm’s ad.

Jason Bring, Esq., partner at Arnall Golden Gregory, has been successful at obtaining injunctions against law firms that engage in predatory advertising. He notes, “I prefer targeted lawsuits over rebuttal ads, which tend to keep the story alive. When deciding which ads to challenge in court, it is best to be selective.” Picking your battles also is important, he adds: “Rather than challenging every ad, focus on those that are most misleading. The courts have been receptive to lawsuits when the ads stretch the truth or use the nursing facility’s service marks.”

State Common Law

Various theories of tort law may also provide an avenue for nursing homes to challenge false or deceptive advertising. For example, tortious interference with contractual relations or business relations may be an appropriate remedy to consider. State laws vary regarding tortious interference with contractual relations and tortious interference with business relations, also called “tortious interference with prospective economic advantage” in some jurisdictions. Generally, proof is required that the defendant: acted improperly and without privilege, acted purposefully and with malice with the intent to injure, induced a third party or parties not to enter into or continue a business relationship with the plaintiff and caused the plaintiff to suffer financial injury. When a law firm acts improperly or with malice by placing a misleading and deceptive ad seeking to find people who want to sue a nursing home and the nursing home suffers economic damages as a result, the nursing home could bring suit against the law firm.

State Bar Associations

State bar associations and state supreme courts promulgate rules regarding attorney advertising. For example, according to the New York Lawyer's Code of Professional Responsibility, “A lawyer or law firm shall not use or disseminate or participate in the use or dissemination of any advertisement that contains statements or claims that are false, deceptive or misleading.” Thus, where there is a false, misleading or deceptive advertisement, the applicable state bar association might become involved.

Media

Nursing homes should consider using the media to highlight positive aspects and combat the perception created by predatory advertising seeking to solicit clients based on deceptive tactics. If a facility has a favorable 5-Star Quality Rating on the CMS Nursing Home Compare website, that would be worthy of mention. Likewise, where a facility has received awards or recognition from national, state or local organizations that could also help to rebut the impression created by misleading advertising.

Recommendations

Simply because a law firm advertises that it focuses on “nursing home negligence,” does not make the ad unlawful or otherwise wrong. However, where an advertisement is predatory – seeking clients on the basis of misleading and deceptive advertising, nursing homes may want to consider some of the potential means to refute and even remove the deceptive advertising. Nursing homes should carefully consider their state’s laws and consult with competent counsel experienced in this area if they wish to legally challenge a predatory ad.

• Carefully consider legal options (varies within each state)
• State Bar Association (file complaint, if appropriate)
• Consumer Protection Agency (file complaint, if appropriate)
• Educate the media (inform newspapers of the facts, publish favorable CMS 5-Star Rating, awards and recognition)
• Public relations (working with a public relations firm or the organization’s marketing department)
• Use social media appropriately (promote positive aspects of nursing home)

Related article: Nursing home negligence?

Alan C. Horowitz

Alan C. Horowitz, Esq., is a partner at Arnall Golden Gregory LLP, where he focuses his legal practice on regulatory compliance for skilled nursing homes, hospices and home health agencies and manages cases where the Centers for Medicare and Medicaid Services (CMS) has imposed an enforcement action. He is a former assistant regional counsel Office of the General Counsel, U.S. Department of Health and Human Services. As counsel to CMS, he was involved with hundreds of enforcement actions and successfully handled appeals before administrative law judges, the HHS Departmental Appeal Board and in federal court. He also has clinical healthcare experience as a registered respiratory therapist and registered nurse. He can be reached at alan.horowitz@agg.com.