Facts

Plaintiffs filed a class action against Skilled Healthcare Group Inc., the parent company of 22 nursing home operators, and its administrative services company, Skilled Healthcare LLC, alleging violations of California law that required 3.2 nursing hours per patient each day. The complaint encompassed the time period between 2003 and 2009, and included 32,000 patients at 22 facilities.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that defendants violated Health and Safety Code section 1430(b), the Consumer Legal Remedies Act, and unfair competition laws by staffing their facilities at levels below those required by state and federal laws.

DEFENDANTS' CONTENTIONS:
Defendants denied all allegations and asserted that the skilled nursing facilities were at all times adequately staffed to provide the services needed and requested by their residents.

Damages

Plaintiffs sought statutory damages, restitution of fees paid to the facilities and other recovery on behalf of the class.

Result

The jury awarded the class over $671 million, which included $613 million in statutory damages and $58 million in restitution. On Sept. 7, 2010, the parties reached a settlement whereby Skilled Healthcare would deposit $50 million into an escrow account to pay for settlement payments to class members, adminstrative costs, attorney fees and certain other payments. The parties also agreed to a 24-month injunction, requiring defendants to adhere to certain nurse staffing levels, to comply with those laws governing staffing requirements, and to cooperate with monitoring efforts. If defendants are found to have violated the terms of the injunction, it may be extended for an additional three months. Conversely, if defendants are compliant for 18 months, they may petition for early termination of the injunction. Plaintiffs have agreed to release defendants from claims related to the litigation. Defendants made no admission of wrongdoing.