California AG Bonta files suit against operator of 2 Seton hospitals in San Mateo County
California Attorney General Rob Bonta has stepped into a health care controversy in San Mateo County by filing a lawsuit against the operator of two of the county's medical centers for allegedly failing to maintain certain services such as emergency, stroke and heart attack care, his office announced Wednesday.
AHMC Seton Medical Center Coastside in Moss Beach and its emergency department shuttered in April, citing needed repairs stemming from damage caused by storms in 2023 and 2024. The closure alarmed elected officials who were concerned that anyone seeking emergency care in the county would now need to go to Daly City, a trek that could mean the difference between life and death for some.
Perhaps most vocal was U.S Rep. Ann Eshoo, D-Palo Alto, whose district covers the mid-Peninsula and coastal San Mateo County.
Eshoo sent a letter to California Department of Public Health director Dr. Tomas Aragon stating her "grave concerns" about the closure and she forwarded the letter to Bonta, she said.
"Seton Coastside is the only facility providing emergency services for 55 miles along the Pacific Coastline from Santa Cruz to Daly City," she wrote. "It's a lifeline for patients in need of emergency care."
Eshoo said patients being diverted to Daly City will have to make a 45-minute trip to get emergency care.
"Forty-five minutes can determine whether patients suffering from acute medical conditions survive," she wrote.
Bonta alleges in the lawsuit filed in San Mateo County Superior Court that the ER shutdown was wrong, as it violates the conditions he set for the facility when he agreed to its sale in July 2020.
The coastside hospital is owned by AHMC Healthcare Inc., which owns hospitals throughout the state, including San Mateo County's other outlet, Seton Medical Center Daly City. AHMC acquired the two hospitals in 2020 following the bankruptcy of Verity Health, their previous operator.
In order for the deal to go through, it had to be approved by the attorney general, according to the court filing Wednesday.
"Like all transactions involving at least one nonprofit hospital, the transaction involving Seton Medical Center and Seton Coastside was consummated only after approval by the Attorney General," reads the filing.
As part of his approval, Bonta alleges he specified that the emergency departments at both hospitals be maintained, among other mandates.
"These conditions that were set forth with AHMC were specifically implemented to protect patients, ensure continued access to critical health care services, and safeguard the community's health and well-being," Bonta said in a statement released by his office. "Unfortunately, AHMC clearly has not upheld its obligations. This failure to meet the required standards is completely unacceptable, and I'm holding them fully accountable for placing patient care and public health at risk."
Bonta said both hospitals broke their agreement by allowing stroke center certification and STEMI (heart attack care) designation to lapse at Seton Medical Center in Daly City and closed the emergency, skilled nursing facility, and its general acute care hospital at Seton Coastside "without notifying nor seeking an amendment of the conditions," he said.
In March of this year, Seton Coastside associate chief operating officer Tim Schulze announced that it would be closing its emergency department and acute care beds temporarily, "until further notice for major repairs due to storm damages."
Schulze said the damage was in the range of $10 million and that the decision was approved by the California Department of Public Health.
"The decision to temporarily close the facility was made after a thorough assessment of the damages, which revealed the need for extensive repairs to the building's infrastructure," he said. "Seton Medical Center Coastside is working closely with local and state authorities, and construction teams to expedite the repair process and minimize disruption on to services."
Schulze invited patients to use the emergency department at the Seton Medical Center in Daly City until the renovations were complete.
Schulze did not respond to a request for comment about the lawsuit by the end of the day, but in papers attached to the suit marked "Exhibit B," Bonta includes a statement from the hospital dated Aug. 2 of this year about the extent of damage they say occurred.
In them, Schulze says the storms "ravaged" the medical center and were "devastating," adding that keeping the facility open and occupied would pose a "severe risk to human life."
The damage he outlines includes a falling hillside "that could collapse at any moment," falling trees that block the only road into the facility, leaks in the emergency department that require extensive remediation, a damaged electrical system, and damage to oxygen tank enclosures.
Schulze estimated that the work would be done by next spring.
In the meantime, in June, San Mateo County supervisors approved an agreement with Dignity Health Medical Foundation to expand its urgent care department in Half Moon Bay in order to keep such services closer to coastal residents, handing over nearly $500,000 to make it happen.
Eshoo again pressed Bonta to intervene in the Coastside issue in July, and on Wednesday both she and Supervisor Ray Mueller praised the lawsuit.
"I am highly pleased that the Attorney General of California has responded forcefully to my call to hold AHMC accountable for its flagrant violations of the law and their Contract of Sale violations," said Eshoo in a statement. "The action today reinforces an important message: irresponsible actors will not be allowed to gamble with the wellbeing of patients."
Mueller said the suit is about more than righting a wrong, but about sending a message.
"No corporation can put financial gain over people without facing the full weight of the law," he said in a statement. "We are committed to restoring healthcare access and safeguarding our community's future."
The suit seeks specific performance and civil penalties and the restoration of certain services at Seton Medical Center in Daly City.
