• 09
  • July
    2010

A jury in California recently awarded more than $670 million dollars to a group of plaintiffs in a nursing home negligence class action lawsuit. The case was brought against Skilled Healthcare Inc. by a group of plaintiffs representing 32,000 nursing home residents as well as family members of deceased former residents.

The plaintiffs alleged Skilled Healthcare violated California law by understaffing their facilities, which in turn, led to substandard care for residents throughout the 22 facilities Skilled Healthcare operates in California. Under state law, a nursing home in California must provide 3.2 nursing hours per patient per day.

The $671 million verdict includes the maximum amount of damages the jury could award under the California statute, $613 million, as well as another $58 million in restitution. The jury still has to decide if it will award punitive damages to the plaintiffs as well.

Skilled Healthcare has said that it strongly disagrees with the outcome of the lawsuit and will appeal the decision. However, in order to defer the judgment while waiting to appeal, they may be required to provide a large portion of the damages as bond. According to an analysis by the Wall Street Journal, it is unlikely the company could afford to do so.

The company has approximately 14,000 employees and also operates in Arizona, Iowa, Kansas, Missouri, Nevada, New Mexico and Texas. The class action lawsuit at issue here only applies to those facilities operated in California. 

Skilled Healthcare is traded on the New York Stock Exchange and saw its stock drop from $4.70 to $1.52 following the ruling.


Related Resources:

Nursing home firm hit with $670 million judgment