The Class Action from Hell

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.

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