I previously reported on the unprecedented Skilled Healthcare verdict relating to chronic under-staffing in 22 nursing homes over a 6 year period. The jury awarded the members of the class $677,000,000, a figure derived by multiplying a $500 statutory penalty times the number of days each of the 22 facilities were proven to be staffed under the legal minimum multiplied by the number of residents in each home on those days. It was a staggering verdict, one that was hard fought by the attorneys who devoted 6 years to the litigation. Kudos to them for initiating a lawsuit and seeing it through to the end in order to really advance the cause of elderly nursing home residents.
Importantly, in addition to the jury's monetary award, the court also issued an injunction, a court order requiring the Skilled Healthcare company to properly staff their nursing homes according in order to meet the needs of all of the residents they serve. This type of injunction is also unprecedented; it provides for oversight and penalties over the next two years to ensure the corporation follows the law . It will reportedly cost the corporation over $12,000,000 to institute this program.
This verdict, of course, not only affects Skilled Healthcare, but the entire nursing home industry (at least in California, which has the special provision regarding daily statutory penalties for understaffing). It sends the message to nursing home chains that they may pay a huge penalty if they continue to cut corners on staffing to boost profits. Gone are the days of thinking either they won't get caught understaffing or if they do get caught, the penalty ($500) is inconsequential.
After the jury rendered its verdict, there was a lot of talk about whether this would bankrupt the corporation; whether Skilled Healthcare could appeal (they would have to post a bond of 1 ½ times the jury award, over $1 Billion to do so); or whether the claim could be settled for a substantially smaller sum. The parties were able to reach an agreement and on December 1, 2010, exactly one year after commencement of the trial, the court approved settlement in the amount of $62.8 Million dollars.
To read more about the case: CLICK HERE
