From Our Blog

Today CALA released a report on litigation costs to 12 of California’s school districts, finding that in just three fiscal years, these schools spent $98.7 million.

The report examined verdicts, settlements and outside counsel costs to Capistrano Unified, Elk Grove Unified, Fresno Unified, Kern High School, Long Beach Unified, Los Angeles Unified, Merced Union High School, Modesto City, Poway Unified, San Diego Unified, San Juan Unified, and Santa Ana Unified.

You would think at a time when a record number of our schools are in financial trouble and further education cuts are likely ahead, we would not allow these litigation costs to go unchecked. California continues to rank among the most litigious states in every study yet we rank at the bottom in many measures of student performance. The more dollars our schools have to pay in litigation costs, the less we have to improve our students’ performance.

California ranks 45^th in 4^th grade math and second to last in 8^th grade reading. At the same time, the state 46^th in the Institute for Legal Reform’s Lawsuit Climate 2010 report and 41^st in the 2010 U.S. Tort Liability Index.

We hear story after story of activities schools are forced to cut, yet no one ever talks about one of the most unpredictable costs of all - litigation. These numbers reflect just 12 of California’s school districts. With nearly 1,000 in the state, there’s no telling what the total number is.

The $98.7 million spent in just three years could have been put to much better use across the state. That money could have paid the salaries of more than 1,530 teachers, purchased nearly 600 new school buses, more than 1.1 million school desks or 246,762 desktop computer packages.

Just like our cities, counties and the state need to be more accountable, so do our schools. There needs to be more transparency and the school districts needs to be more up front about these costs. If parents are being asked to pay more, at least the schools can be more accountable for how they are spending it.

A recent lawsuit against Skilled Healthcare California LLC has had little or no coverage and it is amazing. Skilled Healthcare California was hit with a penalty of $671 million dollars by a Humboldt County jury. And that does not even include the punitive damages. The core issue was whether the company violated a state law requiring nursing homes to provide a minimum of 3.2 nursing hours per patient per day (ppd). The key word here is minimum.

Senior care in this state and country is a huge issue. Skilled Healthcare has never received one complaint against it on the California Nursing Home Directory. However, this did not stop the plaintiffs' attorneys. The judgement was leveled against Skilled Nursing on behalf of the 32,000 patients it has in California, awarding the maximum damages over a six year period to the whole class.

This is a company that provides 14,000 jobs to people in California. Its stock price plummeted 75% on news of the judgement. It looks like it cannot appeal the decision because to do so you have to post a bond of 150% to do so and its assets are approximately $2 million. It has also exhausted its primary professional liability insurance.

Skilled Healthcare California has 22 facilities in California. What happens now?  Does it file for bankruptcy? Close it's doors? What happens to the 14,000 employees? Are they let go? Considering this state has the third worst unemployment rate in the nation that would be a disaster. And what about the 32,000 patients?

The whole thing is a mess. How can this happen? There has to be a better way. The only people that are truly are going to benefit from this sham of a class action are the shameless trial lawyers. Since the punitive damages have not been awarded, I have not seen their fee, but it will likely fall between 30% and 40% of the total award. All because this jury in Humboldt did not feel the company met a nursing patient ratio. Unbelievable.

CALA in the News