California law caps statutory damages by patients in nursing homes at $500 per lawsuit, the state top court ruled Monday, rejecting two justices’ concerns that such a limitation is particularly onerous during the Coronavirus pandemic.
The court overturned a decision by the California Court of Appeal, Fourth District, which had upheld a jury award of $250 per violation to plaintiff Janice Jarman, the daughter of a deceased nursing home patient.
A jury awarded Jarman $95,500—$250 for each of 382 violations—plus an additional $100,000 in damages against HCR ManorCare for its failure to help her father with daily activities.
The trial court initially reduced the award over concerns regarding sufficiency of the evidence. But in 2017 the Fourth District held that a $500 statutory limit on damages applied to each individual violation, not for the lawsuit as a whole as the nursing home argued.
On remand, the trial court ordered the full $195,500 reinstated. Jarman was later awarded $368,755 in attorneys’ fees.
The Fourth District’s decision created a split among the state’s intermediate appeals courts as to how to interpret statutory damages under the California Health & Safety Code.
Arguments centered on a section of the code that permits a civil lawsuit against a facility for violating the state’s Patients Bill of Rights “or any other right provided for by federal or state law or regulation.”
The statute provides that the facility holding a license, in addition to facing a penalty of up to $500, is also liable for costs and attorneys’ fees and may be enjoined from permitting the violation to continue.
In Lemaire v. Covenant Care, the Second District found that the words of the statute didn’t support the lower court’s award of $500 in statutory damages for each of 540 violations alleged. The phrase “up to five hundred dollars” referred to the suit overall, the appeals court said, and state lawmakers’ proposed amendments to increase the $500 cap clarified the legislators’ intent.
The court in Jarman rejected that the language referred to either violations or the suit itself. Instead, it held that a third option existed, which was to award statutory damages based on a per cause of action basis.
High Court Reversal
The top court agreed with the Second District that lack of textual guidance, and legislative amendment history, suggested the law wasn’t written to account for the severity of a facility’s misconduct.
The law wasn’t intended to be the exclusive or primary enforcement mechanism for residents of long-term care facilities seeking compensation for harms suffered, Justice Ming W. Chin wrote.
Capping damages at $500 per lawsuit doesn’t make the law toothless, however, because attorneys’ fees and costs also serve as strong deterrents. The court said a per violation approach presented practical difficulties, including determining how many times a facility violated a patient’s rights.
Harry W.R. Chamberlain II of Buchalter APC told Bloomberg Law the majority concluded the statute is an ancillary remedy that goes along with common law remedies, not a “go-to cause of action.”
Chamberlain, who filed a brief on behalf of the Association of Southern California Defense Counsel in support of ManorCare, said the court properly reinforced that, absent some compelling reason, judges shouldn’t legislate.
He also said the ruling could have been impacted by recent changes to the court that brought in several justices with more scholarly backgrounds.
Justice Mariano Forentino Cuéllar filed a 26-page dissent, citing the struggle long-term care facilities in California and elsewhere have faced with containing Covid-19. He also said that one of ManorCare’s facilities, a home in Walnut Creek, has reported over 130 infections, including12 deaths.
No basis exists for solving the majority’s concerns about disentangling one violation from another by reading the statute to permit—no matter the number of transgressions or cumulative risk to nursing home residents’ lives—a single $500 penalty per lawsuit, he said.
Tony Chicotel, a staff attorney for California Advocates for Nursing Home Reform, agreed. He said the decision will negatively impact elder care, a particularly harmful outcome during the pandemic.
“Residents have never needed the few tools they have for enforcement more than they need them now, and they’ve just had one taken away,” Chicotel said.
Already state nursing home inspectors, having to focus entirely on Covid infection control, have been unable to scrutinize whether other standards of care are being met, Chicotel told Bloomberg Law.
Further, family members, who are frequently the most important advocates for nursing home residents, have been prohibited from visiting.
Chicotel expressed optimism, however, that legislators may soon revisit the 40-year-old statute, especially in light of California being one of the states hardest hit by Covid-19.
“I think a lot of legislators will be interested in addressing the nursing home crisis, and reinvigorating private enforcement of resident rights would definitely be in that wheelhouse,” he said.
Chief Justice Tani Gorre Cantil-Sakauye and Justices Carol A. Corrigan, Leondra R. Kruger, and Joshua P. Groban joined the majority opinion.
Justice Goodwin H. Liu joined Cuéllar in his dissent.
Lanzone Morgan LLP and Downey Brand LLP represent Jarman. Petrullo LLP and Manatt, Phelps & Phillips LLP represents ManorCare.
The case is Jarman v. HCR ManorCare, Cal., No. S241431, 8/17/20.