A company that calls itself one of the fastest-growing health care businesses in the United States is suing a Modesto-based company that has grown rapidly itself in the last four years.
The case entitled “American Specialty Health Incorporated v. American Specialty Healthcare Inc.” was filed last week in the U.S. District Court in Fresno. It’s not hard to guess the lawsuit is about alleged trademark infringement.
American Specialty Health Incorporated based in San Diego also alleges trademark counterfeiting in the suit against American Specialty Healthcare of Modesto. The Modesto firm operates Central Valley Specialty Hospital at 17th and H streets, and two other care facilities in Modesto and Riverbank.
The San Diego company wants the Modesto firm and its executives to stop using the names American Specialty Healthcare and American Specialty College. The lawsuit seeks compensatory damages and an accounting of profits the Modesto company has reaped from using the name.
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Also named as defendants in the civil suit are Gurpreet Singh, a principal owner of the Modesto company, and chief executive officer Gia Smith.
“Our company has spent millions of dollars building brand awareness for its nationally recognized health services under the name American Specialty Health,” said John Dabney, lead attorney for the plaintiffs.
He said the trademark issue has caused confusion in the marketplace and he believes the Modesto company has increased sales by using the American Specialty name.
Smith, the CEO of American Specialty in Modesto, said the local company disagrees with the allegations. “We have trademarked our name and we are moving forward,” Smith said.
The CEO said that lawyers for the local company are working on an agreement with the plaintiff’s attorneys.
The owners of the Modesto firm burst on the scene in 2013 when it reopened a long-term acute care hospital at 17th and H Streets, calling the facility Central Valley Specialty Hospital. The same business people created American Specialty Healthcare in 2015 with an aggressive plan for expansion.
Along with Central Valley Specialty Hospital, it operates Valley Subacute Rehabilitation Center on East Orangeburg Avenue and Central Valley Post Acute in Riverbank.
The Modesto firm began to expand outside the local area by striking a deal last year to reopen services at Colusa Regional Medical Center, which filed for bankruptcy and shut its doors. It also is working on opening a facility in Southern California, Smith said.
The Modesto company has about 800 employees and expects to have 1,200 on the payroll when the Colusa and Southern California facilities are in operation.
The firm purchased the City Mall office complex at 11th and J streets in downtown Modesto for its corporate offices.
American Specialty College was a short-lived private school in Salida that the company opened and closed in late 2016. Smith said the school offering health-care degree programs was merged with a vocational college in Stockton.
The San Diego company said its trademark was registered more than 10 years ago. The services of the privately held company include medical provider networks and administration, fitness center networks and exercise programs and management services for health plans, insurance carriers and employer groups.
American Specialty Health in San Diego has more than 1,400 employees and also has offices near Dallas and Indianapolis and in Columbia, S.C.
Dabney said there was some discussion between attorneys representing the two companies several months ago, but there was no agreement. The Modesto business continued using the name, prompting the lawsuit, he said.
Dabney said the San Diego company sent many cease and desist letters to the Modesto firm before filing the suit. “We will see the lawsuit through unless there is a settlement,” Dabney said.