The first major case for Paul Morantz involved elderly alcoholics involuntarily incarcerated in the Golden State Manor Convalescent Hosptial in Burbank, CA. Sanford Gage and Steven Cooper subsequently jointed Morantz in preparing the case, and the three filed a class-action lawsuit in January 1975. The lawsuit was based on allegations that 11 Los Angeles-area hospitals and their operators and specified employees, as well as five physicians, and the County of Los Angeles, were engaged in a scheme to illegally incarcerate elderly alcoholics to collect payments from the patients' Medicare, Medi-Cal, Social Security and other benefits. In addition, the lawsuit contended that the patients were subjected to such harsh treatment to cause injuries, loss of consciousness, allergic reactions, shock, or even death, according to a Los Angeles Times story dated January 23, 1975.

The suit was settled before going to the jury in July 1977. The plaintiffs received $300,000.