King & Spalding obtained a significant win for Senior Planning Services, LLC (“SPS”) in a putative nationwide class action filed in the District of New Jersey before Chief Judge Freda L. Wolfson. The case involves allegations that SPS engaged in the unauthorized practice of law in violation of New Jersey’s Consumer Fraud Act (“NJCFA”) by assisting long-term care facility residents with their applications for Medicaid.
The plaintiffs alleged that SPS violated the NJCFA and are liable for various state common law claims by falsely claiming they are authorized to provide certain Medicaid planning services that can only be provided by a lawyer and/or omitting that they are not so authorized. Plaintiffs comprise two groups, each purporting to represent a separate class. Class A, represented by the Cotton plaintiffs, comprise SPS clients from New Jersey, and Class B, represented by the Wojna plaintiffs, comprise SPS clients from Connecticut and other states outside of New Jersey in which SPS operates. Mr. Cotton, Ms. Wojna, and Mr. Wojna all utilized SPS’s services to apply for Medicaid, but Mr. Cotton and Mr. Wojna’s applications were terminated after their families determined not to continue working with SPS. Ms. Wojna was granted Medicaid with SPS’s assistance.
Our team successfully moved to dismiss the NJCFA claims for failure to state a claim, and to strike the nationwide class for lack of standing. The team argued that Plaintiffs failed to allege that SPS actually provided any legal advice or performed any legal analysis, and therefore, Plaintiffs met none of the elements required to state a NJCFA claim under New Jersey law. Further, the team asserted that the court lacks jurisdiction over Class B, the nationwide class, because New Jersey law cannot apply to their claims pursuant to a choice of law analysis.
The Court ruled that Plaintiffs failed to state a claim for violation the NJCFA because Plaintiffs failed to allege any “unlawful practice” by SPS. It found that Plaintiffs alleged no facts or evidence showing that SPS told the Plaintiffs it was authorized to provide legal advice or performed any sort of legal analysis. The Court also dismissed the nationwide class, Class B, for lack of standing. However, the Court gave the New Jersey Plaintiffs one more chance to plead the required elements of a NJCFA claim. The Court further cautioned Plaintiffs that the remaining common law claims, although not dismissed, are deficient in several respects.
The case is The Estate of Lester Cotton, et al., v. Senior Planning Services, LLC, et al., No. 19-cv-8921-FLW (D.N.J.).