California jury orders Skilled Healthcare to pay $671 million in damages

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Friday, July 9, 2010

Logo of Skilled Healthcare
Image: Skilled Healthcare.

A California jury in a Humboldt County courthouse ordered nursing home operator Skilled Healthcare (SH) to pay $671 million (about 531 million) in a class action lawsuit from patients of SH's 22 California facilities and their families. The jury found that SH failed to properly staff its facilities to comply with California state law.

The jury has not heard the case for punitive damages; however, it awarded the plaintiffs $613 million (about €484 million) in statutory damages. The remaining $58 million (about €46 million) was in restitution.

After the verdict was issued, Skilled Healthcare stocks plunged over 75% to a record low.

An official statement from SH says it "strongly disagrees" with the jury's verdict. SH plans on filing an appeal to the decision. The company could possibly face bankruptcy because of this verdict.

One of the lawyers for the nearly 32,000 plaintiffs, Timothy Needham, claimed that inadequate staffing levels put SH's patients at risk. He said, "The company knows that this lack of staffing causes a higher risk of problems for patients. Call lights don't get answered, persons don't get proper hygiene, persons don't get their medications on time or the care they need."

This lawsuit does not apply to SH's facilities in Arizona, Iowa, Kansas, Missouri, Nevada, New Mexico, and Texas.


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