Prime Healthcare Services, Inc. v. Harris (216 F. Supp. 3d 1096, 2016)

ORDER:

(1) DENYING DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT PURSUANT TO FED. R. CIY. P. 12(b)(1)

(2) GRANTING DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6)

(3) DENYING AS MOOT PLAINTIFFS’ EX PARTE APPLICATION TO STRIKE NEW ARGUMENTS AND EVIDENCE IN DEFENDANT’S REPLY BRIEF

[ECF Nos. 49, 50.]

Before the Court is Defendant Kamala D. Harris’s (“Defendant’s” or “Harris’s”) motion to dismiss Plaintiffs Prime Healthcare Services, Inc. and Prime Healthcare Foundation, Inc.’s (“Plaintiffs’ ” or “Prime’s”) First Amended Complaint (“FAC”) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. No. 49.) The motion has been fully briefed. (Dkt. Nos. 26-28, 31-33.) Plaintiffs also filed an Ex Parte Application to Strike New Arguments and Evidence in Defendant’s Reply Brief on March 3, 2016. (Dkt. No. 50.) The Ex Parte Application has been fully briefed. (Dkt. No. 36.)

The Court held a hearing on the motions on September 30, 2016. (Dkt. No. 51.) John Mills, Esq. appeared on behalf of Plaintiffs. (Id.) S. Michele Inan, Esq., Marc LeForestier, Esq., and Sharon O’Grady, Esq. appeared on behalf of Defendant. (Id.)

Having reviewed the parties’ motions and the applicable law, and for the reasons set forth below, the Court (1) DENIES Defendant’s motion to dismiss Plaintiffs’ FAC pursuant to Federal Rule of Civil Procedure 12(b)(1), (2) GRANTS Defendant’s motion to dismiss Plaintiffs’ FAC pursuant to Federal Rule of Civil Procedure 12(b)(6), and (3) DENIES AS MOOT Plaintiffs’ Ex Parte Application to Strike New Arguments and Evidence in Defendant’s Reply Brief.

BACKGROUND

I. The Parties

Plaintiff Prime Healthcare Services, Inc. is a California corporation that owns and operates twenty-eight hospitals throughout the country. (Dkt. No. 14, FAC ¶ 21.) Plaintiff Prime Healthcare Foundation, Inc. is a nonprofit public charity that owns seven nonprofit hospitals, each of which was donated by Prime Healthcare Services, Inc., in various states. (Id. ¶22.) Defendant Kamala D. Harris is the Attorney General of California. (Id. ¶ 24.) This action stems from Harris’s allegedly improper, defacto denial of Prime’s proposed acquisition of the Daughters of Charity Health System (“DCHS”). (Id. ¶¶ 1, 2, 14.)

II. Statutory and Regulatory Background

The Attorney General supervises all charitable organizations and enforces the obligations of trustees, nonprofits, and fiduciaries that hold or control property in trust for charitable purposes. Pursuant to California Corporations Code §§ 5914-5925 (“Nonprofit Hospital Transfer Statute” or “Statute”), a nonprofit corporation that operates a health facility must provide notice to and obtain the written consent of the Attorney General prior to entering into an agreement to sell a material amount of its assets to a for-profit corporation. Cal. Corp. Code § 5914(a)(1). The Attorney General has “discretion to consent to, give conditional consent to, or not consent to any agreement or transaction.” Cal. Corp. Code § 5917.

In making her determination, the Attorney General “shall consider any factors that the Attorney General deems relevant,” including, but not limited to a list of nine factors specified by the Statute. Id.-, Cal. Code Regs. tit. 11, § 999.5(f). The factors include, inter alia, whether the transaction “may create a significant effect on the availability or accessibility of health care services to the affected community,” Cal. Corp. Code § 5917(h), and whether the transaction is “in the public interest,” Cal. Corp. Code § 5917(i). If consent is granted to a transaction, the Attorney General’s policy is to “require for a period of at least five years the continuation at the hospital of existing levels of essential healthcare services, including but not limited to emergency room services.” Cal. Code Regs. tit. 11, § 999.5(f)(8)(C). Notwithstanding this policy, the Attorney General “retain[s] complete discretion to determine whether this policy shall be applied in any specific transaction under review.” Id.

The Attorney General considers information from a variety of sources in making her determination on a proposed transaction. The selling entity must submit to the Attorney General information about the transaction, reasons for the sale, the fair market value of the transaction, and the impact of the sale on the availability and accessibility of healthcare services in the community affected by the sale, among other information. Cal. Corp. Code § 5914(b); Cal. Code Regs. tit. 11, § 999.5(d). The Attorney General may also request that the seller provide additional information that she deems reasonably necessary to make her determination. Cal. Code Regs. tit. 11, § 999.5(c)(2). Before issuing a written decision, the Attorney General must conduct one or more public meetings in order to hear comments from interested parties. Cal. Corp. Code § 5916. The Attorney General’s policy is to receive and consider all relevant information concerning the proposed transaction from “[a]ny interested person.” Cal. Code Regs tit. 11, § 999.5(e)(7). The Attorney General may contract with consultants and experts to review the proposed sale or receive expert opinion from any state agency. Cal. Code Regs. tit. 11, § 999.5(e)(4).

If a proposed transaction affects an acute care hospital with more than fifty beds or may result in a significant effect on the availability or accessibility of existing healthcare services, the Attorney General prepares an independent healthcare impact statement that evaluates the transaction’s potential impact on the availability and accessibility of services to the affected community. Cal. Code Regs. tit. 11, § 999.5(e). The independent statement may assess factors such as the transaction’s potential impact on the “level and type of charity care that the hospital has historically provided” and the “provision of health care services to Medi-Cal patients, county indigent patients, and any other class of patients.” Cal. Code Regs. tit. 11, § 999.5(e)(6). The information in the statement is then used to consider whether the proposed transaction may “create a significant effect on the availability or accessibility of health care services,” one of the nine factors listed in Cal. Corp. Code § 5917. Cal. Code Regs. tit. 11, § 999.5(e). The statement is public. Cal. Code Regs. tit. 11, § 999.5(e)(3)(D).

The Attorney General notifies the applicant of her decision in writing. Cal. Corp. Code § 5915. Her decision is reviewable in state court in an administrative mandamus proceeding. Cal. Civ. Proc. Code § 1085.

III. Factual Background

A. The Alleged Illegal Agreement Between Harris and SEIU-UHW

Since 2009, Prime has been engaged in a protracted dispute with the Service Employees International Union-United Healthcare Workers West (“SEIU-UHW”), a labor union that represents California hospital workers, in part due to its unwillingness to allow SEIU-UHW to unionize Prime’s California hospitals. (FAC ¶ 10.) Prime alleges that Harris entered into an illegal scheme with SEIU-UHW: in exchange for SEIU-UHW’s political ,and financial support, Harris would prevent Prime from acquiring nonprofit hospitals in California until Prime agreed to allow SEIU-UHW to unionize its hospital workers. (Id. ¶ 93.) Prime alleges that pursuant to this unlawful scheme, Harris “refused, to reasonably approve the sale of [DCHS] to [Prime] because Prime rejected SEIU-UHW’s extortionate demands to unionize workers at all Prime hospitals and did so in quid pro quo exchange for the union’s continuing financial support of her political career, including her current candidacy for the U.S. Senate.” (Id. ¶ 1.)

As evidence for this scheme, Prime cites SEIU-UHW’s donations to Harris’s 2010 and 2014 campaigns for Attorney General. (Id. ¶40.) Prime alleges on information and belief that SEIU-UHW promised Harris up to $25 million in political contributions to her U.S. Senate campaign if she denied Prime’s acquisition or imposed conditions that would effect a de facto denial of the DCHS sale. (Id. ¶ 41.)

B. The VVCH Transaction

In 2011, Harris denied consent to Prime’s proposed acquisition of Victor Valley Community Hospital (“WCH”). (Id. ¶¶ 45-48.) Prime asserts that Harris’s denial of the WCH transaction was the first and only time Harris has denied the sale of a California nonprofit hospital. (Id. ¶54.)

Prime asserts that Harris denied' the 2011 WCH sale pursuant to her unlawful agreement with SEIU-UHW. (Id. ¶ 93.) As evidence, Prime cites examples of statements and conduct by SEIU-UHW. An SEIU-UHW attorney stated at a bankruptcy hearing that Harris would deny the WCH transaction; SEIU-UHW campaigned against the sale; and SEIU-UHW opposed the sale at the Attorney General’s public hearing on the transaction. (Id. ¶¶ 45, 47, 50.) After Harris denied Prime’s proposed acquisition of WCH, SEIU-UHW publicly claimed credit for the decision. (Id. ¶ 62.) During labor negotiations with Prime in July 2014, Dave Regan, president of SEIU-UHW, stated that Harris denied the WCH sale to Prime at the union’s request. (Id. ¶ 53.)

C. The DCHS Transaction

Facing financial difficulty in 2014, the Daughters of Charity Health System decided to sell five nonprofit hospitals and a skilled nursing facility that it owns and operates in California. (Id. ¶¶ 3, 65, 94.) After a thirteen-month bidding process, DCHS selected Prime’s bid to purchase the hospitals. (Id. ¶¶ 4, 7, 78.) DCHS and Prime’s sale agreement required Prime to keep each of the hospitals open and to “maintain all existing healthcare services, including emergency rooms and trauma centers, for at least five years.” (Id. ¶ 78.) DCHS submitted written notice of the proposed sale to the Attorney General on October 24, 2014. (Id. ¶¶ 8, 81.) Prime alleges that its proposed acquisition was “the single largest hospital transaction ever reviewed by the Attorney General’s office.” (Id. ¶¶ 8, 9.)

The Attorney General’s Office made public five healthcare impact statements assessing the effects of the proposed sale on the availability and accessibility of healthcare services. (Dkt. Nos. 18-3-18-7, Defendant’s Request for Judicial Notice (“Defi’s RJN I”), Ex. 1-5.) The statements, prepared by a healthcare consultant, recommended that four of the five hospitals and the skilled nursing facility be required to maintain emergency and specific essential services for ten years in order to minimize potential negative consequences. (Def.’s RJN I, Ex. 1 at 95-105; Ex. 3 at 91-99; Ex. 4 at 87-95; Ex. 5 at 82-89.) Prime alleges that Harris specifically requested that these statements include the ten-year conditions. (FAC ¶¶ 15, 82, 85, 90.) On information and belief, Prime alleges that Harris made this request “before the report or any studies had been generated.” (Id. ¶ 82.) In January 2015, the Attorney General received written comments and held multiple public hearings over a period of five days to receive input on the proposed sale. (Id. ¶ 84.)

On February 20, 2015, the Attorney General conditionally consented to the sale. (Id. ¶¶ 14, 89.) The Attorney General imposed a number of conditions on the sale. (Id.) The conditions at issue in this instant case require Prime to operate the five hospitals as acute care facilities for ten years and to maintain the majority of current hospital services at each hospital (with the exception of St. Vincent Medical • Center) for ten years. (Id.) Staff members of the Attorney General’s Office informed Prime that Harris requested the ten-year conditions. (Id. ¶¶ 15, 82, 85, 90.) Prime alleges that the Attorney General’s ten-year conditions were unprecedented and rendered the proposed transaction operationally and financially unviable, requiring Prime to operate the financially failing hospitals at a loss for ten years. (Id. ¶¶ 18, 92, 94, 96.) Accordingly, Prime characterizes the Attorney General’s conditional approval of the DCHS sale as a de facto denial. (Id. ¶¶ 14, 85, 94, 95.) On March 10, 2015, Prime withdrew its bid to purchase the DCHS hospitals because of the ten-year conditions. (Id.)

Prime asserts that Harris issued a de facto denial of Prime’s acquisition pursuant to her agreement with SEIU-UHW. (Id. ¶¶ 1, 2,17, 41, 93.) As evidence, Prime cites examples of statements and conduct by SEIU-UHW. SEIU-UHW created a website to oppose Prime’s bid. (Id. ¶ 68.) SEIU-UHW aired television ads and initiated a calling campaign urging Harris to deny consent to the sale. (Id. ¶ 79.) SEIU-UHW and a competing bidder met with Harris to show Harris that an alternative buyer existed. (Id. ¶83.) SEIU-UHW passed a resolution calling on Harris to halt the sale of any hospital to Prime until investigations of Prime for alleged Medicare fraud were resolved. (Id. ¶ 73.) SEIU-UHW issued a press release announcing that twenty-seven state legislators had submitted a letter to Harris asking her to stop the sale to Prime. (Id. ¶ 74.) SEIU-UHW issued a subsequent announcement that thirty-eight state legislators, two U.S. representatives, and other elected officials had signed on to the letter to Harris. (Id.) Prime alleges that SEIU-UHW threatened to withdraw its support for any Democratic politician who accepted contributions from Prime. (Id.) SEIU-UHW comprised the main source of opposition to the Prime-DCHS deal. (Id. ¶¶ 79, 80, 84.)

Dave Regan, the president of SEIU-UHW, repeatedly informed Prime and DCHS that Harris would approve Prime’s acquisition only if Prime agreed to allow SEIU-UHW to unionize workers at Prime’s hospitals. {Id. ¶¶ 9 -11, 42, 48, 64, 71, 72, 85.) Regan informed Prime that “he has the influence with Harris to either make or break Prime with respect to the Prime-DCHS sale transaction,” that Harris “would do what she was told and nothing more,” that “a SEIU-UHW deal was the price for doing business in California and obtaining a sale approval from Harris,” and that Regan “control[s] Harris and the political process in California.” {Id. ¶¶ 42, 71, 85.) DCHS representatives allegedly informed Prime that Harris would deny Prime’s acquisition or require financially unviable conditions unless Prime agreed to SEIU-UHW’s demands. {Id. ¶¶ 9, 12.) SEIU-UHW publicly took credit for Harris’s decision to impose “unprecedented conditions” on Prime’s acquisition of DCHS. {Id. ¶ 91.)

On July 31, 2015, DCHS submitted notice to the Attorney General of a proposed sale to Blue Mountain Capital Management, LLC (“Blue Mountain”). {Id. ¶ 99.) Prime speculates that the Attorney General will approve this transaction and impose five-year, instead of ten-year, conditions. {Id. ¶ 98.)

IV. Procedural Background

Plaintiffs filed a Complaint in the United States District Court for the Central District of California on September 21, 2015 (Dkt. No. 1) and filed a FAC on November 12, 2015 (Dkt. No. 14).

Plaintiffs assert five claims for relief in the FAC: (1) a 42 U.S.C. § 1983 claim for violation of Plaintiffs’ rights under the Due Process Clause of the Fourteenth Amendment; (2) a 42 U.S.C. § 1983 claim for violation of Plaintiffs’ rights under the Equal Protection Clause of the Fourteenth Amendment; (3) a 42 U.S.C. § 1983 claim for violation of Plaintiffs’ rights under the National Labor Relations Act, 29 U.S.C. §§ 151- 169; (4) a declaratory judgment that Cal. Corp. Code §§ 5914-5925 Is unconstitutional under the Fourteenth Amendment, both facially and as applied to Plaintiffs; and (5) a permanent injunction enjoining Harris from enforcing Cal. Corp. Code §§ 5914-5925, both generally and with respect to Plaintiffs. (Dkt. No. 14.)

Defendant moved to transfer the case to the United States District Court for the Southern District of California, or, in the alternative, to dismiss Plaintiffs’ FAC on November 30, 2015. (Dkt. Nos. 17, 18.) Defendant’s motion to transfer was granted on March 31, 2016 by Chief Judge George H. King of the United States District Court for the Central District of California. (Dkt. No. 38.) Accordingly, Defendant’s motion to dismiss (Dkt. No. 18) and Plaintiffs’ Ex Parte Application to Strike New Arguments and Evidence in Defendant’s Reply Brief (Dkt. No. 35) were denied without prejudice to their reassertion in the transferee court. (Dkt. No. 38.) On April 12, 2016, the parties jointly moved the Court to accept as reasserted and filed Defendant’s motion to dismiss Plaintiffs’ FAC and Plaintiffs’ Ex Parte Application, together with all related briefing. (Dkt. No. 42.) Judge John A, Houston of the United States District Court for the Southern District of California granted the parties’ joint motion on April 12, 2016. (Dkt. No. 43.) The case was reassigned to the undersigned judge on July 11, 2016. (Dkt. No. 44.) ' : .

LEGAL STANDARDS

A. Rule 12(b)(1)

Federal Rule of Civil Procedure (“Rule”) 12(b)(1) provides for dismissal of a complaint for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). “The Article III case or controversy requirement limits federal courts’ subject-matter jurisdiction by requiring.. .that plaintiffs have standing and that claims be ‘ripe’ for adjudication.” Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1121 (9th Cir. 2010). Lack of Article III standing requires dismissal for lack of subject matter jurisdiction under Rule 12(b)(1). Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir, 2011). The threshold question of whether a plaintiff has standing is distinct from the merits of his or her claim. Id. at 1068.

B. Rule 12(b)(6)

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12 (b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984); see also Neitzke v. Williams, 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989) (“Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law.”). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534. While a plaintiff need not give “detailed factual allegations,” a plaintiff must plead sufficient facts that, if true, “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 547, 127 S.Ct. 1955). A claim is facially plausible when the factual allegations permit “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In other words, “the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009). “Determining whether a complaint states a plausible claim for relief will.. .be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe all inferences from them in .the light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions, however, need not be taken as true merely because they are cast in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, the court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the court takes judicial notice. Lee v. Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).

DISCUSSION

I. Standing

To satisfy Article Ill’s standing requirements, a plaintiff must show (1) it has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and 3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (U.S. 2000).

Defendant contends that Prime’s allegations of injury are speculative and hypothetical. (Dkt. No. 49-1 at 24-26.) Defendant focuses on three allegations: that Prime is (1) prevented from lawfully acquiring and operating DCHS pursuant to the sale agreement, (2) potentially subject to an action by DCHS for breach of the agreement, and (3) unlawfully prevented by Harris from acquiring other California nonprofit hospitals so long as Prime continues to reject SEIU-UHW’s unionization demands. (Id. at 25.)

Defendant overlooks Prime’s core allegation of injury. Prime alleges that the financially unviable conditions Harris imposed on the DCHS transaction forced it to abandon its $843 million bid to acquire DCHS on March 10, 2015. (FAC ¶¶ 18, 92.) Prime’s alleged lost business opportunity and corresponding economic harm constitutes an injury in fact. See, e.g., Wedges/Ledges of California, Inc. v. City of Phoenix, Ariz., 24 F.3d 56, 60 (9th Cir. 1994) (finding plaintiffs suffered an injury in fact by alleging that the city’s revocation of existing licenses and blanket ban on new licenses caused plaintiffs to suffer “lost sales, lost profits, lost business opportunities and other economic harms”); Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 261-63, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977) (concluding that a nonprofit developer had standing to challenge the denial of its petition for rezoning and seek injunctive and declaratory relief, despite the fact that its land-purchase contract was contingent upon securing rezoning). Prime’s allegation that Defendant’s conduct pressured it to unionize its hospitals also suffices to show an injury in fact. See Viceroy Gold Corp. v. Aubry, 75 F.3d 482, 488 (9th Cir. 1996) (finding injury in fact where plaintiff alleged that it suffered “competitive disadvantage.. .relative to unionized mines and the pressure to unionize”).

Defendant’s argument that Prime’s allegations of future injury are hypothetical is unavailing. A plaintiff “does not have to await the consummation of threatened injury to obtain preventive relief.” LSO, Ltd. v. Stroh, 205 F.3d 1146, 1154 (9th Cir. 2000) (internal citation omitted). While “past wrongs do not in themselves amount to [a] real and immediate threat of injury necessary to make out a case or controversy,” City of Los Angeles v. Lyons, 461 U.S. 95, 103, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983), “evidence of past instances of enforcement is important in a standing inquiry,” LSO, Ltd., 205 F.3d at 1154. Prime, which is in the business of buying and operating hospitals, infers from Harris’s obstruction of two of its proposed acquisitions of nonprofit hospitals that it will continue to lose business goodwill and future opportunities to purchase hospitals in California. (FAC ¶¶ 64,105.)

Furthermore, “[i]t is sufficient for standing purposes that the plaintiff intends to engage in a course of conduct arguably affected with a constitutional interest and that there is a credible threat that the challenged provision will be invoked against the plaintiff.” LSO, Ltd., 205 F.3d at 1155 (internal citation and quotation marks omitted). Should Prime attempt to purchase nonprofit hospitals in California in the future, its transactions are necessarily subject to the Attorney General’s review pursuant to the Nonprofit Hospital Transfer Statute, which Prime argues is unconstitutional.

Finally, Prime meets the causation and redressability requirements for standing. Prime alleges that Harris’s imposition of the ten-year conditions on the DCHS transaction caused Prime’s inability to further pursue its bid and complete the acquisition. (FAC ¶¶ 18, 92.) Prime’s requests for declaratory and injunctive relief, if granted, would redress its injury by preventing Defendant from unlawfully impeding Prime’s purchases of California nonprofit hospitals. See Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 261, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977) (finding redressability where the denial of a rezoning petition stood as a barrier to a nonprofit. developer’s construction of housing that it had contracted to build, and where securing injunctive relief would remove the barrier); see also Graham v. Fed. Emergency Mgmt. Agency, 149 F.3d 997, 1003 (9th Cir. 1998), abrogated on other grounds by Levin v. Commerce Energy, Inc., 560 U.S. 413, 130 S.Ct. 2323, 176 L.Ed.2d 1131 (2010) (recognizing that “[pjlaintiffs need not demonstrate that there is a ‘guarantee’ that their injuries will be redressed by a favorable decision” but “only that a favorable decision is likely to redress” their injuries) (internal citation and quotation marks omitted).

In sum, Plaintiffs have sufficiently alleged that they have standing to pursue their claims at the pleadings stage. Accordingly, the Court DENIES Defendant’s motion to dismiss Plaintiffs’ FAC pursuant to Federal Rule of Civil Procedure 12(b)(1).

II. Plaintiffs’ Quid Pro Quo Allegations

Throughout its FAC, Prime relies on the existence of an illegal agreement between Harris and SEIU-UHW to support various causes of action. Prime acknowledges that its quid pro quo allegations are not vital to the Court’s disposition of this ease, and it does not assert a separate claim for relief on conspiracy grounds. Nonetheless, Prime marshals its quid pro quo allegations to argue that it possesses a cognizable property interest under the Fourteenth Amendment; that Harris’s reasons for de facto denying Prime’s DCHS acquisition were pretextual for purposes of Prime’s class-of-one equal protection claim; that Harris imposed upon Prime an implicit condition to unionize in violation of the NLRA; and that the Nonprofit Hospital Transfer Statute is void for vagueness. Because Prime’s quid pro quo allegations pervade Prime’s various arguments, the Court finds it appropriate to first address these allegations prior to addressing each of Prime’s claims in turn.

Defendant contends that Prime’s allegations of a quid pro quo scheme between Harris and SEIU-UHW fail in light of the plausibility requirement established by Twombly and Iqbal. (Dkt. No. 49-1 at 20-24.) Prime responds that its allegations support the plausibility of its central assertion that Harris’s conditional approval of the DCHS acquisition was motivated by political corruption. (Dkt. No. 27 at 23-26.)

Prime alleges conclusorily that Harris entered into an illegal scheme with the SEIU-UHW: in exchange for SEIU-UHW’s political support and provision of up to $25 million in contributions to her campaign, Harris agreed to prevent Prime from acquiring nonprofit hospitals in California until Prime agreed to allow SEIU-UHW to unionize its hospital workers. (FAC ¶¶ 1, 41, 93.) The “conclusory nature of [Plaintiffs’] allegations ... disentitles them to the presumption of truth.” Iqbal, 556 U.S. at 681, 129 S.Ct. 1937. Moreover, as explained below, even were it not con-clusory, Prime’s core allegation of an illegal agreement is contradicted by the non-conclusory factual allegations of the FAC.

Prime’s nonconclusory factual allegations do not give rise to a “plausible suggestion of conspiracy.” Twombly, 550 U.S. at 565-66, 127 S.Ct. 1955. Notably, Prime’s allegations center on conduct by SEIU-UHW and its representatives. (Dkt. No. 27 at 24-25.) While the allegations show that SEIU-UHW and its representatives attempted to pressure Prime into accepting its unionization demands and mounted campaigns to block Prime’s hospital acquisitions, they do not allow the Court to draw a reasonable inference of misconduct on Harris’s part. That the union told Prime during labor negotiations that it has control over Harris and significant political influence in California does not overcome the “obvious alternative explanation” that the union, which has been engaged in nearly a decade of legal, political, and legal disputes with Prime, was attempting to gain leverage over Prime and compel Prime to accede to its unionization demands. Twombly, 550 U.S. at 567, 127 S.Ct. 1955. Given that unions participate in the political arena, SEIU-UHW’s communications with Harris and donations to Harris’s 2010 and 2014 campaigns for Attorney General do not plausibly suggest an illegal agreement between Harris and SEIU-UHW. (FAC ¶¶ 9, 40.)

To the extent that there was an agreement for Harris to reject Prime’s DCHS acquisition in exchange for $25 million, the existence of such an incentivizing scheme is at odds with SEIU-UHW’s marked efforts to oppose Prime’s acquisition. Assuming that Harris had in fact entered into a quid pro quo scheme with the union, there would have been no need at all for SEIU-UHW’s extensive actions, which included, inter alia, creating a website to oppose Prime’s bid (id. ¶ 68), airing television ads (id. ¶ 79), initiating a calling campaign urging Harris to deny consent to the sale (id.), passing a resolution calling on Harris to halt the sale of any hospital to Prime until investigations of Prime for alleged Medicare fraud were resolved (id. 1173), issuing a press release announcing that twenty-seven state legislators had submitted a letter to Harris asking her to stop the sale to Prime (id. If 74), and issuing a subsequent announcement that thirty-eight state legislators, two U.S. representatives, and other elected officials had signed on to the letter to Harris (⅛).Rather than shoring up the existence of an illegal agreement between Harris and SEIU-UHW, these allegations point to the opposite conclusion. Despite Regan’s puffing that he “controls] Harris and the political process in California,” (id. ¶ 85), SEIU-UHW’s multifaceted campaign against Prime’s acquisition belies Regan’s boasts.

Moreover, that Harris personally requested that the ten-year conditions be inserted into the impact statements and into her final decision does not give rise to a plausible inference of an unlawful scheme or corrupt motive on her part. The “obvious alternative explanation” is that Harris was exercising her discretion pursuant to the Statute. Twombly, 550 U.S. at 567, 127 S.Ct. 1955. The Statute and its corresponding regulations explicitly give Harris discretion to vary from her policy of requesting that essential services be continued for a minimum of five years. Even if Harris’s discretionary decision to impose ten-year conditions on Prime constituted unsound or careless policymaking, the alleged lack of wisdom and care in issuing her decision would not plausibly establish that Harris had an improper purpose of carrying out an illegal agreement with the SEIU-UHW.

Finally, Prime’s allegations that link Harris’s conduct with politically corrupt motives are made upon information and belief. (See, e.g., FAC ¶¶ 17, 41, 47, 48, 53, 54, 56, 61, 85, 93, 102, 103, 105.) Because these allegations are conclusory, they are insufficient under Twombly and Iqbal. See Blantz v. California Dep’t of Corr. & Rehab., Div. of Corr. Health Care Servs., 727 F.3d 917, 926-27 (9th Cir. 2013) (rejecting plaintiffs complaint as conclusory and insufficient to state a claim against defendant because “[t]he only allegations that mention [defendant] are that, ‘on information and belief,’ he ‘directed]’ the other defendants to take the actions that form the basis of the complaint”). The Supreme Court’s reasoning in Twombly is illustrative. The complaint in Twombly presented its “ultimate allegations” on information and belief. Twombly, 550 U.S. at 551, 127 S.Ct. 1955. Citing the defendants’ “parallel course of conduct,” the plaintiffs alleged “upon information and belief’ that the defendants had “entered into a contract, combination or conspiracy” in violation of the antitrust laws. MThe Supreme Court held that the plaintiffs had “not nudged their claims across the line from conceivable to plausible,” and accordingly; “their complaint must be dismissed.” Twombly, 550 U.S. at 547, 127 S.Ct. 1955.

The Second Circuit explained Twombly’s impact on pleading upon information and belief:

Because the Twombly complaint’s factual allegations described only actions that were parallel, and were doctrinally. consistent with lawful conduct, the concluso-ry allegation on information and belief that the observed conduct was the product of an unlawful agreement was insufficient to make the claim plausible. The Twombly plausibility standard, which applies to all civil actions, does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within'the possession and control of the defendant, or where the belief is based on factual information that makes the inference of culpability plausible.

Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010) (internal citations and quotation marks omitted). Prime argues that “[w]hether AG Harris did in fact accept the promise of campaign contributions is a fact peculiarly within her possession and control, as Prime obviously was not present at the meetings or discussions between her and SEIU/Regan.” (Dkt. No. 27 at 26.) However, because Prime’s core allegation of an illegal agreement between the SEIU-UHW and Harris is conclusory, Prime’s allegations on information and belief that reiterate this conclusion do not render such a scheme plausible. Like the plaintiffs’ complaint in Twombly, Prime’s factual allegations describe only actions by SEIU-UHW and Harris that were nominally parallel at best and were “doctrinally consistent with lawful conduct.” Arista Records, LLC, 604 F.3d at 120. Furthermore, the very specificity of Prime’s allegation—that Harris accepted $25 million in campaign contributions—combined with the fact that Prime does not attribute its knowledge to any source or reasoning, undercuts Prime’s argument that such information is peculiarly within Harris’s control. Moreover, Prime’s belief is not “based on factual information that makes the inference of culpability plausible.” Min fact, as explained earlier, Prime’s factual allegations regarding SEIU-UHW’s conduct render the scheme implausible—they belie the conclusion that Harris had an agreement with SEIU-UHW to de facto deny approval of the DCHS sale in exchange for $25 million. Accordingly, Prime’s remaining “conclusory allegation[s] on information and belief that the observed conduct was the product of an unlawful agreement [are] insufficient to make the claim plausible.” Id,

In sum, Prime’s complaint has not “nudged [its] claims” of an illegal quid pro quo scheme between Harris and SEIU-UHW “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

III. 42 U.S.C. § 1983 Claims

A. Substantive Due Process

Defendant contends that Prime does not possess either a liberty or property interest protected by the Fourteenth Amendment. (Dkt. No. 49-1 at 27-28.) Defendant argues that accordingly, Prime does not meet the threshold requirement to state a due process claim under the Fourteenth Amendment. (Id.)

“A threshold requirement to a substantive or procedural due process claim is the plaintiffs showing of a liberty or property interest protected by the Constitution.” Wedges/Ledges of California, Inc., 24 F.3d at 62. Only a “limited range of rights.. .have been recognized as ‘fundamental’ for the purposes of substantive due process analysis[.]” United States v. Juvenile Male, 670 F.3d 999, 1013 (9th Cir. 2012).

i. Liberty Interest

a. Liberty of Contract

Prime alleges that it has a “liberty interest in freedom from arbitrary government action.” (FAC ¶ 107.) In response to Defendant’s contention that Prime lacks a cognizable liberty interest, Prime cites to language in cases stating that the right to contract is a constitutionally protected liberty interest. (Dkt. No. 27 at 29-30) (citing Bayside Fish Flour Co. v. Gentry, 297 U.S. 422, 427, 56 S.Ct. 513, 80 L.Ed. 772 (1936) and Meyer v. Nebraska, 262 U.S. 390, 399, 43 S.Ct. 625, 67 L.Ed. 1042 (1923)). Both Bayside Fish Flour Co.and Meyerrely on Adkins v. Children’s Hosp. of the D.C., 261 U.S. 525, 43 S.Ct. 394, 67 L.Ed. 785 (1923), in stating that the right to contract falls within the protection of the Due Process Clause. See 297 U.S. at 427, 56 S.Ct. 513; 262 U.S. at 399, 43 S.Ct. 625. However, in West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703 (1937), the Supreme Court repudiated the Lochner v. New York, 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937 (1905), and Adkins line of cases that upheld the liberty of contract as an interest protected by substantive due process. See 300 U.S. at 400, 57 S.Ct. 578. Accordingly, Prime’s argument that it had a protected liberty interest on liberty of contract grounds fails.

b. Occupational Liberty

Prime contends that Harris’s actions violated its liberty right to pursue an occupation under the Fourteenth Amendment. (Dkt. No. 27 at 29-30.) Forecasting that the Attorney General will likewise reject or de facto deny any future nonprofit hospital acquisitions that Prime undertakes, Prime argues that “Harris’s actions have resulted in a de facto debarment of Prime from contracting to purchase nonprofit hospitals in California.” (Id.)

The Supreme Court has stated that while there is “some generalized due process right to choose one’s field of private employment,” the cases recognizing such a right “all deal with a complete prohibition of the right to engage in a calling[.]” Conn v. Gabbert, 526 U.S. 286, 291-92, 119 S.Ct. 1292, 143 L.Ed.2d 399 (1999); accord Guzman v. Shewry, 552 F.3d 941, 954 (9th Cir. 2009) (“[T]he liberty interest in pursuing one’s chosen profession has been recognized only in cases where (1) a plaintiff challenges the rationality of government regulations on entry into a particular profession, or (2) a state seeks permanently to bar an individual from public employment.”). To assert a substantive due process claim based on the right to pursue an occupation of one’s choice, Plaintiffs must show “first, that they are unable to pursue an occupation in [their line of] business and, second, that this inability is due to actions that substantively were ‘clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.’ ” Wedges/Ledges of California, Inc., 24 F.3d at 65 (quoting FDIC v. Henderson, 940 F.2d 465, 474 (9th Cir. 1991)).

Here, Prime has not alleged that it is unable to pursue an occupation in its chosen industry: owning and operating hospitals. (FAC ¶¶ 21-23.) Prime’s FAC points to the opposite—Prime owns hospitals throughout the United States and has been billed an “award winning healthcare system.” (Id.) That Harris conditionally approved Prime’s DCHS acquisition does not leave Prime unable to continue purchasing, owning, and operating nonprofit and for-profit hospitals. See, e.g., Henderson, 940 F.2d at 474 (holding that a former bank president who alleged that he was wrongfully discharged as a result of the actions of a state banking official must show that the acts left him “unable to pursue a job in the banking profession”) (emphasis added).

Nor do Prime’s citations to de facto debarment cases avail Prime’s occupational liberty claim. (Dkt. No. 27 at 29-30.) “De facto debarment occurs when a contractor has, for all practical purposes, been suspended or blacklisted from working with a government agency without due process, namely, adequate notice and a meaningful hearing.” Phillips v. Mabus, 894 F.Supp.2d 71, 81 (D.D.C. 2012); accord TLT Const. Corp. v. United States, 50 Fed.Cl. 212, 215 (2001). The de facto debarment cases are factually inapposite to Prime’s case. Prime is in the business of owning and operating hospitals, not government contracting, and Harris’s conditional consent to Prime’s proposed acquisition of DCHS does not deprive Prime of its ability to pursue its occupation.

Finally, Prime contends that Harris’s actions amount to “government stigmatization” preventing Prime from pursuing its chosen occupation. (Dkt. No. 27 at 30-31.) However, “[o]nly the stigma of dishonesty or moral turpitude gives rise to a liberty interest!!.]” Henderson, 940 F.2d at 477. Harris’s decision regarding Prime’s acquisition cannot be said to “impugn [Prime’s] morality or question [Prime’s] honesty.” Id.

Accordingly, Plaintiffs do not allege that they possess a liberty interest protected by the Fourteenth Amendment.

ii. Property Interest

To have a property interest in a government benefit, a person must have “a legitimate claim of entitlement to it.’ ” Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)). A property interest must “stem from an independent source such as state law—rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.” Id. “[S]tate law creates a ‘legitimate claim of entitlement’ when it ‘imposes significant limitations on the discretion of the decision maker.’ ” Gerhart v. Lake Cty., Mont., 637 F.3d 1013, 1019 (9th Cir. 2011) (quoting Braswell v. Shoreline Fire Dep’t, 622 F.3d 1099, 1102 (9th Cir. 2010)); see also Doyle v. City of Medford, 606 F.3d 667, 673-74 (9th Cir. 2010) (citing cases holding that “a statute may create a property interest if it mandates a benefit when specific non-discretionary factual criteria are met”). “[A] benefit is not a protected entitlement if government officials may grant or deny it in their discretion.” Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, 756, 125 S.Ct. 2796, 162 L.Ed.2d 658 (2005).

“Whether an expectation of entitlement is sufficient to create a property interest will depend largely upon the extent to which the statute contains mandatory language that restricts the discretion of the decisionmaker.” Doyle, 606 F.3d at 672-73 (quoting Allen v. City of Beverly Hills, 911 F.2d 367, 370 (9th Cir. 1990)). “[A] statute must contain ‘particularized standards or criteria’ to create a property interest.” Id. at 673 (quoting Allen, 911 F.2d at 370) (internal quotation marks omitted). Open-ended criteria, such as ones that look to “other factors of public interest,” are not “particularized standards.” Id. at 673-74 (quoting Shanks v. Dressel, 540 F.3d 1082, 1091 (9th Cir. 2008)). “Only if the governing statute compels a result ‘upon compliance with certain criteria, none of which involve the exercise of discretion by the reviewing body,’ does it create a constitutionally protected property interest.” Shanks, 540 F.3d at 1091 (quoting Thornton v. City of St. Helens, 425 F.3d 1158, 1164-65 (9th Cir. 2005)).

Defendant argues that Prime had no legitimate claim of entitlement because the Nonprofit Hospital Transfer Statute confers upon the Attorney General discretion to deny, consent to, or conditionally approve a transaction. (Dkt. No. 49-1 at 28.) In making her determination, “the Attorney General shall consider any factors that the Attorney General deems relevant, including, but not limited to, whether any of the [listed factors] apply.” Cal. Corp. Code § 5917. The corresponding regulations allow the Attorney General “complete discretion” to determine the length of time the acquirer should continue existing levels of healthcare services. Cal. Code Regs, tit 11, § 999.5(f)(8)(C) (emphasis added). Given the discretion afforded by the Statute to the Attorney General in making her determination, state law does not confer upon Prime a legitimate claim of entitlement sufficient to be a cognizable property interest under the Fourteenth Amendment.

Prime cites to Dominion Cogen, D.C., Inc. v. D.C., 878 F.Supp. 258 (D.D.C. 1995), for the proposition that “[t]he withholding of a permit that was necessary for the parties’ contract to come to fruition ‘as a result of improper and politically motivated conduct.. .more than satisfies’ the standard for stating a due process claim.’ ” (Dkt. No. 27 at 27-28) (quoting Dominion Cogen, 878 F.Supp. at 265), In Dominion Cogen, the plaintiffs contended that they had complied with all necessary regulatory requirements and that “the only thing left to be done was for the Department of Consumer. and Regulatory Affairs (“DCRA”) to issue building permits for the project.” 878 F.Supp. at 261. The court stated that “the narrow question presented by this case is whether plaintiffs were improperly denied building permits to which they were legally entitled, and which District officials had extremely limited discretion to withhold.” Id. at 267. Here, Prime has not alleged that it was “legally entitled” to the Attorney General’s approval of the transaction or that the Attorney General had extremely limited discretion.

Citing decisions holding that individuals who were terminable only for cause had property interests in their continued employment, Prime contends that its private contract with DCHS created a property interest cognizable under the Fourteenth Amendment. (Dkt. No. 27 at 27-28.) While these cases involved situations wherein the government’s actions affected individuals’ property interests in private contracts, they are factually inapposite. Although its contract with DCHS was an acquisition contract, not an employment contract, Prime argues that because the contract provided that termination of the contract for an unenumerated reason would result in liquidated damages, the contract was analogously terminable only for good cause. (Dkt. No. 27 at 28.) Prime cites no law in support of its analogy. To the extent that Prime’s contract with DCHS can be analogized to a for-cause employment contract, the terms of the sale contract render the analogy moot. (Def.’s RJN I, Ex. 12 at 49-53.) The sale contract allowed for termination for “any reason” by Prime or DCHS, and the contract was expressly conditioned upon approval by the Attorney General and subject to conditions she might impose. Id.; see Roth, 408 U.S. at 578, 92 S.Ct. 2701 (holding that an at-will college professor had no property interest in his job within the meaning of the Fourteenth Amendment); Benn v. Cty. of Los Angeles, 150 Cal.App.4th 478, 58 Cal.Rptr.3d 563, 572 (2007) (finding that the “mere inclusion of the ‘termination for convenience’ clause in the contracts eliminated the essential characteristic of permanence and entitlement necessary to a finding of a protectable property right”).

Finally, Prime argues that it possessed a property interest in the contract because the DCHS sale agreement was structured on the parties’ prediction that Harris would continue imposing five-year, as opposed to ten-year, service continuance requirements. (Dkt. No. 27 at 28-29.) However, a “constitutional entitlement cannot be created—as if by estoppel—merely because a wholly and expressly discretionary state privilege has been granted generously in the past.” Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 465, 101 S.Ct. 2460, 69 L.Ed.2d 158 (1981) (internal citar tion and quotation marks omitted); Gerhart, 637 F.3d at 1021 (“[A] government body’s past practice of granting a government benefit is insufficient to establish a legal entitlement to the benefit.”). Nor did Prime have a “mutually explicit” understanding that would give rise to an entitlement to the Attorney General’s consent to the DCHS acquisition on terms Prime desired. Roth, 408 U.S. at 577, 92 S.Ct. 2701; see also Orloff v. Cleland, 708 F.2d 372, 377 (9th Cir. 1983) (remanding the question of whether plaintiffs twenty years of employment by the Veterans Administration (“VA”) and an “indefinite extension” of plaintiffs appointment after the initial termination decision created a “mutually explicit” understanding with the VA that plaintiff had a property interest in his employment); Gerhart, 637 F.3d at 1020 (“A person’s belief of entitlement to a government benefit, no matter how sincerely or reasonably held, does not create a property right if that belief is not mutually held by the government.”).

For the foregoing reasons, Plaintiffs do not allege that they possess a property interest protected by the Fourteenth Amendment. Accordingly, Plaintiffs cannot state a § 1983 claim for violation of their due process rights under the Fourteenth Amendment.

B. Equal Protection

Plaintiffs allege that Harris violated their Fourteenth Amendment equal protection rights by “not us[ing] the same standard of review and approval that she used with other similarly situated buyers of non-profit hospitals, but instead us[ing] a different standard that imposed arbitrary, capricious, onerous and unprecedented approval conditions because Plaintiffs rejected UHW’s unionization demands, an impermissible standard[.]” (FAC ¶ 113.) Because Plaintiffs do not allege that they are members of a class, Plaintiffs allege a “class-of-one” claim. To state a valid “class-of-one” claim under the Equal Protection Clause, Plaintiffs must allege that they have “been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment.” Engquist v. Oregon Dep't of Agr., 553 U.S. 591, 601, 128 S.Ct. 2146, 170 L.Ed.2d 975 (2008) (quoting Vill. of Willowbrook v. Olech, 528 U.S. 562, 564, 120 S.Ct. 1073, 145 L.Ed.2d 1060 (2000)).

Defendant contends that the class-of-one theory is not applicable in this case because Defendant’s actions constituted discretionary state decisionmaking. (Dkt. No. 49-1 at 29.) In Towery v. Brewer, 672 F.3d 650 (9th Cir. 2012), the Ninth Circuit stated that “[t]he class-of-one doctrine does not apply to forms of state action that ‘by their nature involve discretionary decision-making based on a vast array of subjective, individualized assessments.’ ” 672 F.3d at 660 (quoting Engquist v. Oregon Dep’t of Agric., 553 U.S. 591, 603, 128 S.Ct. 2146, 170 L.Ed.2d 975 (2008)). While Defendant is correct in arguing that her conditional approval of Prime’s DCHS acquisition was the product of discretionary decisionmaking, the Ninth Circuit noted in Towery that the class-of-one theory is inapplicable only “[ajbsent any pattern of generally exercising the discretion in a particular manner while treating one individual differently and detrimentally.” Id. at 660-61 (emphasis in original). To the extent that Prime alleges that Harris had a pattern of exercising her discretion in a particular manner while treating Prime differently and detrimentally, the Court declines at this time to hold that the class-of-one theory is inapplicable here.

1. “Similarly Situated”

Defendant contends that Prime fails to allege facts showing that it was similarly situated to other buyers of nonprofit hospitals. (Dkt. No. 49-1 at 29-30.) Prime lists a number of acquired nonprofit hospitals and corresponding conditions that the Attorney General imposed on those transactions. (FAC ¶¶ 96-97.) The conditions imposed vary from transaction to transaction. (Id.) However, Prime does not allege anything about the buyers that could give rise to an inference that such buyers were similarly situated as Prime. (Id.) If anything, Prime’s FAC indicates that no other similarly situated comparator exists, as Prime was slated to be the buyer in “the single largest hospital transaction ever reviewed by the Attorney General’s office.” (Id. ¶¶ 8, 9.) Prime attaches two transactions in its Request for Judicial Notice. (Pls.’ RJN, Ex. A-B.) One involved a for-profit buyer’s proposed acquisition of a single hospital. (Pls.’ RJN, Ex. A at 5.) The other involved an agreement between two nonprofit entities. (Pls.’ RJN, Ex. B at 5.) Neither transaction aids Prime’s showing of a similarly situated comparator. Accordingly, Prime’s class-of-one claim fails for lack of a similarly situated comparator. C.f. Nordlinger v. Hahn, 505 U.S. 1, 10, 112 S.Ct. 2326, 120 L.Ed.2d 1 (1992) (“[The Equal Protection Clause] keeps governmental decisionmakers from treating differently persons who are in all relevant respects alike.”); Erickson v. Cty. of Nevada ex rel. Bd. of Supervisors, 607 Fed.Appx. 711, 712 (9th Cir. 2015) (“Parties allegedly treated differently in violation of the Equal Protection Clause are similarly situated only when they are ‘arguably indistinguishable.’” • (quoting Engquist, 553 U.S. at 601, 128 S.Ct. 2146)); Gerhart, 637 F.3d at 1022 (finding that plaintiff “presented considerable evidence that he was treated differently than other similarly situated property owners throughout the permit application process,” given his “uncontradicted testimony” that “at least ten other property owners on his block” had built lane approaches without being required to apply for an approach permit).

Prime cites to decisions that purportedly allowed class-of-one claims to proceed if the state actor was shown to have selectively enforced the law because of animus, regardless of whether the plaintiffs made a sufficient showing of the “similarly situated” element. (Dkt. No. 27 at 33-34) (citing Squaw Valley Dev. Co. v. Goldberg, 375 F.3d 936, 945-47 (9th Cir. 2004); Swanson v. City of Chetek, 719 F.3d 780, 784 (7th Cir. 2013)). Contrary to Prime’s contention, a finding of pretext on Defendants’ part affects the “rational basis” element of a class-of-one claim, not the “similarly situated” element. See Squaw Valley Dev. Co., 375 F.3d at 945-46 (“In this circuit it is clearly established that a plaintiff may pursue an equal protection claim by raising a ‘triable issue of fact as to whether the defendants’ asserted [rational basis].. .was merely a pretext’ for differential treatment.” (internal citation omitted, alteration in original)). Although the plaintiff in Squaw Valleyasaerted a class-of-one claim without presenting evidence of other similarly situated entities, see id. at 945, the Ninth Circuit subsequently clarified that the similarly situated prong was not raised or contested on summary judgment, and that the defendant had conceded for purposes of appeal that plaintiff was subject to more oversight and regulatory and enforcement action as compared to other similarly situated parties, see Squaw Valley Dev. Co. v. Goldberg, 395 F.3d 1062, 1063-64 (9th Cir. 2005) (denying petition for rehearing or rehearing en banc). The Ninth Circuit emphasized that its statement about the lack of an “apples to apples” comparison of similarly situated entities “was made in the context of demonstrating that the record supports that [the defendant] had a rational basis for his exceptionally close scrutiny and oversight of [the plaintiff].” Id. at 1063.

Swansonis likewise inapposite. In Swanson, the Seventh Circuit stated that “[i]f animus is readily obvious, it seems redundant to require that the plaintiff show disparate treatment in a near exact, one-to-one comparison to another individual.” 719 F.3d at 784 (citing Fenje v. Feld, 398 F.3d 620, 628 (7th Cir. 2005) (“[A]n ‘orchestrated campaign of official harassment directed against [the plaintiff] out of sheer malice,’ ‘vindictiveness,’ or ‘malignant animosity’ would state a claim for relief under the Equal Protection Clause.” (internal citation omitted)). Here, Plaintiff has not alleged “readily obvious” animus on Harris’s part.

2. Rational Basis

“[T]he rational basis prong of a ‘class of one’ claim turns on whether there is a rational basis for the distinction, rather than the underlying government action.” Gerhart, 637 F.3d at 1023 (emphasis in original). “Unless a classification trammels fundamental personal rights or implicates a suspect classification, to meet constitutional challenge the law in question needs only some rational relation to a legitimate state interest.” Lockary v. Kayfetz, 917 F.2d 1150, 1155 (9th Cir. 1990). The court determines whether there is “any reasonably conceivable state of facts that could provide a rational basis for the classification.” FCC v. Beach Communications, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993).

Prime argues that the burden of rational basis review applies only in an equal protection challenge to a legislative classification in a statute. (Dkt. No. 27 at 35.) The Ninth Circuit rejected this argument in Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580 (9th Cir. 2008). In Lazy Y Ranch, the appellant made the same argument, drawing on the distinction between legislative and executive decisionmaking. See 546 F.3d at 590 n.4. The Ninth Circuit stated that the same equal protection analysis “applies equally to executive and legislative action.” Id. (citing Nordlinger v. Hahn, 505 U.S. 1, 16 n.8, 112 S.Ct. 2326, 120 L.Ed.2d 1 (1992); Immigrant Assistance Project of L.A. County Fed’n of Labor v. INS, 306 F.3d 842, 872 (9th Cir. 2002)).

Even if Prime presented sufficient allegations of similarly situated comparators, the Attorney General had a rational basis for imposing different conditions on Prime. Prime contends that Harris did not proffer any reasoned explanation for the conditions she imposed in her final decision. (Dkt. No. 27 at 36-37.) However, the Nonprofit Hospital Transfer Statute does not require the Attorney General to provide reasons for her decision, and Prime cites no legal authority requiring that Harris proffer reasons for her final decision. The Attorney General has discretion to consider whether each individual transaction “may create a significant effect on the availability or accessibility of health care services to the affected community” and whether the transaction is “in the public interest.” Cal. Corp. Code § 5917. Requiring Prime to continue services for ten years ensures that the hospitals will continue to provide services to their communities. (Dkt. No. 49-1 at 31.)

a. Pretext

A plaintiff may overcome a defendant’s alleged rational basis by demonstrating pretext. “[A]cts that are malicious, irrational, or plainly arbitrary do not have a rational basis.” Engquist v. Oregon Dep’t of Agric., 478 F.3d 985, 993 (9th Cir. 2007), aff'd sub nom. Engquist v. Oregon Dep’t of Agr., 553 U.S. 591, 128 S.Ct. 2146, 170 L.Ed.2d 975 (2008). “[I]n an equal protection claim based on selective enforcement of . the law, a plaintiff can show that a defendant’s alleged rational basis for his acts is a pretext for an impermissible motive.” Id. An equal protection plaintiff may show pretext by showing that “(1) the proffered rational basis was objectively false; or (2) the defendant actually acted based on an improper motive.” Squaw Valley Dev. Co., 375 F.3d at 946-47.

Prime does not show that Harris’s “preferred rational basis was objectively false.” Id. As explained earlier, Prime’s allegations that Harris was motivated by an illegal scheme with the SEIU-UHW are conclusory at best. And Prime’s factual allegations do not raise a plausible inference of an illegal quid pro quo scheme between SEIU-UHW and Harris. Because Prime’s quid pro quo allegations do not pass muster under the Twombly and Iqbal plausibility standard, Prime does hot show that Harris’s alleged rational basis for her acts was a pretext for an impermissible motive.

Accordingly, Plaintiffs fail to state a § 1983 claim for violation of their equal protection rights under the Fourteenth Amendment.

C. National Labor Relations Act (“NLRA”)

Prime alleges that Harris’s de facto denial of the DCHS acquisition and refusal to approve the transaction unless Prime a