Skilled Healthcare Seeks Mistrial on Damages Award

Skilled Healthcare Group Inc. asked a California judge to declare a mistrial or order a new trial over a jury’s $677 million damages award for claims the company improperly staffed its nursing homes.

Lawyers for Skilled Healthcare today asked Superior Court Judge W. Bruce Watson in Eureka, California, to throw out the verdict because one juror lied about knowing one of the plaintiffs and was biased and hostile toward the company. The judge said he would issue a decision at an Aug. 31 hearing.

The plaintiffs had accused Foothill Ranch, California-based Skilled Healthcare of improperly staffing 22 facilities in the state. A Humboldt County jury on July 6 found the company liable for statutory damages and restitution. The verdict is the largest jury award in the U.S. this year, according to data compiled by Bloomberg.

Lawyers for the plaintiffs said in a filing that Skilled Healthcare’s juror-misconduct allegations were based on “hearsay, speculation, and outright fabrication of the facts” and that the company’s request for a mistrial lacked merit.

In its request for a mistrial filed Aug. 6, Skilled Healthcare said a juror didn’t disclose before the trial that she had worked for the Humboldt County Coroner’s Office and had handled at least one corpse that came from one of the company’s facilities.

Coroner’s Office

The juror, April Garwin, came to know the daughter of the deceased whose body was handled at the coroner’s office, according to Skilled Healthcare. The daughter was one of the plaintiffs in the case, the company said.

The company said July 15 that it had agreed to try to settle the case through mediation, which was scheduled to end Aug. 9.

W. Tim Needham, an attorney for the plaintiffs, declined outside court today to discuss mediation. He said he intends to seek punitive damages against Skilled Healthcare.

Under California law, when a company is found liable for targeting “the elderly and infirm, damages can be trebled,” he said in the interview.

Skilled Healthcare has said the jury award exceeds the policy limits of its insurance. The company had a net loss of $133 million last year on revenue of $759.8 million.

The plaintiffs asked the judge to issue an order requiring the company to show proof of compliance with state regulations governing nurse-to-patient staffing ratios.

“These are documents that they prepare every day,” Needham said today. “This is not rocket science.”

Kippy Wroten, an attorney representing the company, said how the state regulations apply to Skilled Healthcare is “a complex issue” because they haven’t been implemented yet.

“The problem is a matter of the statute itself, though passed by the Legislature, is contingent on funding, which will not come until a state budget is passed,” she said in an interview.

That issue will be addressed at the Aug. 31 hearing, Watson said.

The case is Lavender v. Skilled Healthcare Group, DR060264, Superior Court, Humboldt County, California (Eureka).

To contact the reporters on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net; David Watts Barton in Eureka, California, at davidwattsbarton@gmail.com.

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