Nursing Home Chain Loses Class Action Lawsuit Big

I guess there's probably a lot a screaming and yelling going on at the Skilled Healthcare Group (SKH) headquarters in California. Perhaps the anger derives from the miserable looking financial chart for the company showing a whopping 75% decline in price per share in one day!

Another portion of the companies anger is probably being misdirected at the lawyers who defended the company in a class action lawsuit brought against Skilled Healthcare based on systematic under-staffing at 22 nursing homes owned by the corporate giant. Really, the only people to blame are the managers in the company who intentionally chose to limit that staffing at their facilities.

After hearing months of evidence regarding staffing levels at the nursing homes operated by Skilled Healthcare, the jury awarded the maximum amount permissible under the California Health and Safety Code--- a whopping $671 million to the members of the class.

The massive jury award is hardly an arbitrary number. Rather, the compensatory damages were awarded based on a statutory violation of $500 per-patient per-day at the 22 subject facilities for not providing that state minimum staffing of 3.2 hours for each patient living at the nursing homes on a daily basis.

In addition to the compensatory damages, the lawsuit also seeks punitive damages against Skilled Healthcare. Unlike compensatory damages, punitive damages are intended to punish the wrongdoer for their acts. The punitive aspect of the lawsuit will move forward in the coming weeks.

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Nursing Home Chain Hit With Landmark Verdict in Under-Staffing Class Action Lawsuit