This article was downloaded by: [York University Libraries]On: 11 November 2014, At: 17:20Publisher: Taylor & FrancisInforma Ltd Registered in England and Wales Registered Number:1072954 Registered office: Mortimer House, 37-41 Mortimer Street,London W1T 3JH, UK

Journal of Legal MedicinePublication details, including instructionsfor authors and subscription information:http://www.tandfonline.com/loi/ulgm20

Punitive Damages inLawsuits Against NursingHomesEllen J. Scott aa Southern Illinois University School of Law.c/o Law Journal Office, Lesar Law Building,Carbondale, Illinois 62901.Published online: 10 Nov 2010.

To cite this article: Ellen J. Scott (2002) Punitive Damages in LawsuitsAgainst Nursing Homes, Journal of Legal Medicine, 23:1, 115-129, DOI:10.1080/019476402317276696

To link to this article: http://dx.doi.org/10.1080/019476402317276696

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy ofall the information (the “Content”) contained in the publicationson our platform. However, Taylor & Francis, our agents, and ourlicensors make no representations or warranties whatsoever as to theaccuracy, completeness, or suitability for any purpose of the Content.Any opinions and views expressed in this publication are the opinionsand views of the authors, and are not the views of or endorsed byTaylor & Francis. The accuracy of the Content should not be reliedupon and should be independently verified with primary sources ofinformation. Taylor and Francis shall not be liable for any losses,actions, claims, proceedings, demands, costs, expenses, damages,and other liabilities whatsoever or howsoever caused arising directlyor indirectly in connection with, in relation to or arising out of the useof the Content.

This article may be used for research, teaching, and private studypurposes. Any substantial or systematic reproduction, redistribution,reselling, loan, sub-licensing, systematic supply, or distribution in anyform to anyone is expressly forbidden. Terms & Conditions of accessand use can be found at http://www.tandfonline.com/page/terms-and-conditions

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

The Journal of Legal Medicine, 23:115–129Copyright C° 2002 Taylor & Francis0194-7648/02 $12.00 + .00

PUNITIVE DAMAGES IN LAWSUITS AGAINST

NURSING HOMES

Ellen J. Scott, J.D.*

INTRODUCTION

Nursing homes provide skilled nursing care and support to individuals whoare not well enough to care for themselves, but are not sick enough to requirehospitalization. 1 Most nursing homes are for-pro� t, with a signi� cant numberof them owned by for-pro� t chains.2 Every year, more than 1.5 million indi-viduals are admitted to nursing homes in the United States.3 In 1997, therewere more than 17,000 nursing homes in the United States with over 1.7 mil-lion beds.4 In the same year, government programs, such as Medicaid, paidthese homes roughly $28 billion.5 It is estimated that, by the year 2030, thepopulation of people age 60 and older will more than double to 85 million andthe group of individuals age 85 and older will triple to 8 million.6 As medicaladvances improve treatment for this population, the need to provide for theirlong-term care becomes more critical.

Nursing home residents are highly vulnerable to injuries resulting notjust from medical error, but also from abuse.7 These elderly patients are usuallyunable to perform daily living tasks independently.8 They must be assisted

* December, 2001 graduate, Southern Illinois University School of Law. She would like to thank her son,Jorge Jr., and her editor, Joe Rose, for their support . Address correspondenc e to Ms. Scott at SouthernIllinois University School of Law, c/o Law Journal Of� ce, Lesar Law Building, Carbondale, Illinois62901.

1 See SENATE SPECIAL COMMITTEE ON AGING, CALIFORNIA NURSING HOMES: CARE PROBLEMS PERSIST DESPITE

FEDERAL AND STATE OVERSIGHT 1, 1998 GAO/HEHS 202.2 Nursing Homes: When a Loved One Needs Care, CONSUMER REP., Aug. 1995, at 518. Nearly 70% of all

nursing homes are investor-owned. One chain, Beverly Enterprises, runs more than 700 nursing homesand reports annual revenues of nearly $3 billion.

3 AngelaS.Quin, Imposing Federal Criminal Liability on Nursing Homes: A Way of Deterring Inadequat eHealth Care and Improving the Quality of Care Delivered?, 43 ST. LOUIS U.L.J. 653, 654 (1999).

4 Id.5 Id.6 Id.7 Neil Sugarman et al., Medical Errors from Which the Elderly Are at Risk and the Use of Litigation to

Protect the Elderly from Such Errors, available at 2 Ann. 2000 ATLA-CLE 2627, at *1 (Westlaw).8 Id.

115

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

116 SCOTT

with basic tasks such as feeding and bathing.9 Many of them do not havevisitors; even when family members or friends visit, they often fail to noticesigns of neglectful care or may be unwilling to complain about it.10 Errors inthe care of these residents, especially in long-term care facilities, often occurwhere � nancial considerations negatively affect the adequacy of recruitment,retention, or training of staff, as well as the availability of appropriate medicaland safety devices.11

Minimum care standards for nursing homes are set by the federal govern-ment through its Omnibus Budget Reconciliation Act of 1987 (OBRA ’87).12

Under this regulatory model, states are permitted to enact higher standards;additionally, they are given responsibilit y for enforcing both state and fed-eral regulations.13 Under OBRA ’87, a nursing home patient’s “Bill of Rights”was enacted, which includes the requirement that facilities must not “use ver-bal, mental, sexual, or physical abuse, corporal punishment, or involuntaryseclusion.”14

Another section of the statute sets out minimum “quality of life”standards. 15 Nursing homes are to provide proper treatment, meet the nutri-tional needs of patients, and provide each patient with adequate supervisionand assistance to prevent accidents.16 These federal regulations, though, donot provide a civil remedy to the resident for noncompliance. Many statesalso have enacted legislation for the purpose of regulating delivery of nurs-ing home care,17 many of which provide for a private right of action for theresident.18 These actions are often limited to actual damages suffered or re-quire conditions for � ling suit, which may be time-consuming and imposeadditional costs.19

For several reasons, litigation in this area has had limited success inimproving the quality of care for this population. This is a particularly vulner-able population due to their age, mental ability, � nancial status, and medical

9 Id.10 Id.11 Id.12 Margaret M. Flint, Nursing Homes, 294 PLI/EST 447, 449.13 42 C.F.R. § 483 (2000).14 Id. § 483.13.15 Id. § 483.15. For example, 42 C.F.R. § 483.15(h) requires a nursing home to provide a “(1) safe,

clean, comfortable, and homelike environment” to the patients, by providing “(2) housekeeping andmaintenance services necessary to maintain a sanitary, orderly, and comfortable interior.”

16 Id. § 483.25.17 See, e.g., MO. REV. STAT. § 198 (2000); 210 ILL. COMP. STAT. 45 (2000).18 See, e.g., FLA. STAT. § 400.023 (2000); OR. REV. STAT. § 124.100 (2000); 210 ILL. COMP. STAT. 45/3-602

(2000); MO. REV. STAT. § 198.093 (2000); WIS. STAT. § 50.10 (2000); LA. REV. STAT. ANN. § 40:2010.8(A)-(E) (West 2000); N.Y. PUB. HEALTH L. § 2801(d)(1)-(10) (2000).

19 See, e.g., MO. REV. STAT. § 198.093 (2000). The resident must � rst � le a complaint with the AttorneyGeneral’s Of� ce; only if the Attorney General fails to pursue the complaint may the resident then � lea civil suit against the facility.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 117

condition. Often, lawsuits in this area are for the wrongful death of a lovedone, coming too late to deter maltreatment of the decedent.20 Furthermore,damages in negligence lawsuits � ow from “loss of earning capacity and lifeexpectancy,”21 which can be negligible for an elderly person in an often ad-vanced state of illness.

In most of these cases, a claim for pain and suffering focuses on themost signi� cant type of damages, because medical costs and other specialdamages usually will be covered by insurance (such as Medicaid).22 Addition-ally, when damages are imposed, the facility’s insurance carrier often pays themonetary penalty. Although this may increase a facility’s insurance premi-ums, when the facility is operated by a multi-state conglomerate with millionsof dollars in revenue, such an increase has little deterrent effect. Also, with-out a statutory provision for attorney’s fees and costs, attorneys may hesitateto represent a � nancially strapped client with a time-consuming andexpensive case.

To receive punitive damages in these cases, under a common-law theoryof recovery, the resident must prove conduct of a “gross and � agrant character,evincing reckless disregard of human life.”23 That standard is higher than merenegligence and requires a showing of intentional behavior, which is oftendif� cult to establish. Yet, even the federal government has recognized theimportant potential deterrent effect punitive damages can have. Congressiona lamendments to OBRA ’87 included additional monetary sanctions againstnoncompliant nursing home providers.24

The � rst section of this commentary explores the current state of carein nursing home facilities. Section II looks at punitive damages in the contextof common-law theories of recovery. Section III explores the development ofvarious state and federal legislative remedies for residents of nursing homes,including the availability of punitive damages in civil suits against nursinghome facilities. Section IV uses several recent studies of punitive damages toput these awards in context with current litigation. The conclusion suggeststhat stronger statutory protection, which provides private civil liability fornursing home operators, as well as provisions for punitive damages, can act asa strong deterrent to the maltreatment of nursing home residents. Furthermore,without such statutory protection, nursing home residents will remain largelyunprotected.

20 Quin, supra note 3, at 681.21 See generally Jeffrey Spitzer-Resnick & Maya Krajcinovic, Protecting the Rights of Nursing Home

Residents: How Tort Liability Interacts with Statutory Protections, 19 NOVA L. REV. 629 (1995) (dis-cussing various private rights of action against nursing homes for inadequate care).

22 Julie A. Braun & Cheryl C. Mitchell, Recent Developments in Senior’s Law, 34 TORT & INS. L.J. 669,687 (1999).

23 First Healthcare Corp. v. Hamilton, 740 So. 2d 1189, 1197 (Fla. App. 1999).24 William J. Scanlon, Testimony before the Senate Special Committee on Aging, Mar. 18, 1999,

GAO/HEHS 46, at 2.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

118 SCOTT

I. QUALITY OF CARE PROBLEMS IN NURSING HOMES

In 1987, Congress enacted a comprehensive federal nursing home reformact as part of OBRA ’87.25 This legislation was a major reform attempt in thefederal regulation of nursing homes.26 This initiative was intended to dramat-ically improve the health and safety of nursing home residents with extensiveregulations, including a “Residents’ Bill of Rights,” new care standards, andnew enforcement mechanisms.27

However, many recent reports suggest otherwise. In 1998, the Gen-eral Accounting Of� ce (GAO) released a report on the quality of care inCalifornia nursing homes.28 Although the GAO report focused on selectednursing homes in California, the report concluded that “the problems weidenti� ed are indicative of systemic survey and enforcement weaknesses.”29

The study further noted: “National data indicate this problem is notlimited to California.”30 GAO investigators found that residents often werenot provided with the most basic care, including food, drink, andmedication.31

In fact, according to GAO investigators , inadequate routine medical careled to problems as serious as “dramatic unplanned weight loss and failure toproperly treat pressure sores that became infected and toxic.”32 Their reportstated that “in the absence of autopsy information : : : we cannot be conclusiveabout the extent to which this unacceptable care may have contributed directlyto individual deaths.”33

Similarly, the Health Care Financing Administration (HCFA), a divi-sion of the Health and Human Services Department, reported to Congress in1998 that, nationally, nursing home residents continue to suffer from seriousyet preventable medical problems, such as bed sores, malnutrition, and de-hydration, caused by inadequate care.34 The report also found that residentscontinued to suffer from both verbal and physical abuse as well as neglect.35

Additionally, annual reports released by the Long-Term Care Ombudsman

25 42 U. S. C. §§ 1395i, 1396r (2000) (Medicare and Medicaid respectively).26 See generally Jeffrey G. Abrandt, 1996 Elder Law Institute: A Brief Overview of OBRA-87, 246

PLI/EST 83.27 See 42 U.S.C. § 1395i-3(c); 42 U.S.C. § 1396r(c); 42 C.F.R. § 483.10-.15; 42 U.S.C. § 1395i –3(b)(1)(A);

42 U.S.C. § 1396r(b)(1)(A); 42 U.S.C. § 1395i-3(h); 42 U.S.C. $ 1396r(h) (2000).28 See Quin, supra note 3, at 663. See also SPECIAL COMMITTEE ON AGING, supra note 1.29 See Quin, supra note 3, at n.94.30 Id.31 Id.32 Id. at n.95.33 Id.34 HEALTH AND HUMAN SERVICES DEPARTMENT, HEALTH CARE ADMINISTRATION FACT SHEET: ASSURING THE

QUALITY OF NURSING HOME CARE (July 21, 1998), at http://www.hhs.gov (visited on Feb. 27, 2001).35 Id.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 119

Of� ce of the Administration on Aging document a continuing problem withthe quality of care provided to nursing home residents.36

Finally, in 1995, Consumer Reports magazine conducted an undercoverinvestigation of 53 nursing homes and 27 assisted living and board-and-carefacilities across the nation.37 Included in the report was an analysis of fouryears of inspection reports from the HCFA.38 This investigation found thatthe “quality of care at thousands of the nation’s nursing homes is poor orquestionable at best.”39 Speci� cally reported were “facilities [which] allowlife-threatening bed sores to develop, violate resident’s dignity, fail to producerequired care plans : : : improperly use physical restraints : : : and fail to meetbasic standards for food preparation.”40 The review of HCFA reports concludedthat “about 40% of all facilities certi� ed by HCFA have repeatedly violatedfederal standards : : : including standards covering critical aspects of patientcare.”41 The existence of negligent, and even intentional, disregard for thequality of care provided to nursing home residents, led many states to enactlegislation that provides a private cause of action for those residents who suffersuch maltreatment.

II. RECOVERY UNDER COMMON-LAW THEORIES

Traditionally, recovery under common-law theories has proven dif� cultfor the abused nursing home resident. Their decreased mental capacity, speechand hearing problems, and memory loss make them poor witnesses.42 Tradi-tional damage awards are based on past and future lost earnings, emotionaldistress, medical expenses, and loss of physical well-being.43 Because nursinghome residents have limited earning capacity, diminished life expectancy, andpre-existing physical and mental conditions, any damages available to theseresidents are meager under the traditional analysis.44 Additionally, common-law negligence claims require extensive discovery and inquiry, which is anexpensive and time-consuming process.45

36 See generally ADMINISTRATION ON AGING, LONG-TERM CARE OMBUDSMAN REPORTS, at http://www.aoa.dhhs.gov /ltcombudsman/html. “The Long-Term Care Ombudsman Program was established underthe Older Americans Act (OAO) to advocate on behalf of older residents of long-term care facilities.”These reports provide statistical data on the number and types of complaints received by the variousombudsman of� ces regarding nursing homes.

37 See Nursing Homes, supra note 2.38 Id.39 Id. at 519.40 Id.41 Id.42 Seymour Moskowitz, Saving Granny from the Wolf: Elder Abuse and Neglect—A Legal Framework,

31 CONN. L. REV. 77, 105 (1998).43 Id. at 148.44 Id. at 105.45 Id.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

120 SCOTT

Recovery of punitive damages is dif� cult due to the need to provethat the defendant wilfully intended to abuse the resident.46 Punitivedamages are not awarded for mere negligence; the United States SupremeCourt recently stated that punitive damages were not appropriate unless thedefendant’s conduct is “more reprehensible than negligence.”47 Trial andappellate judges strictly scrutinize punitive damages, and are far morelikely to reverse or remit damage awards of this type.48 While occasion-ally successful, common-law suits have not proven to be an effectivedeterrent.

A Texas jury awarded the estate of a nursing home resident$90 million in punitive damages in Horizon/CMS Healthcare Corp. v. Auld.49

The plaintiff, a resident of the defendant’s nursing home, alleged negligenceand gross negligence in delivering “substandard nursing care [which]proximately caused her to develop pressure sores, that she suffered contrac-tures in all extremities : : : and that the care actually administered for herpressure sores was painful.”50 The jury based its punitive damage award onits � nding that the defendant had engaged in grossly negligent conduct.51

The trial court reduced the award based on mandatory statutory caps onpunitive damages, and both parties appealed.52 The appellate court af� rmedthe trial court’s remittur; the Texas Supreme Court also af� rmed theremittur.53

The defendant also challenged the plaintiff ’s use of Texas Department ofHuman Services’ survey reports.54 The inspection reports concluded that thenursing home had staf� ng problems and repeatedly failed to “provide basiccare to its residents, such as providing proper nutrition to and maintaining thepersonal hygiene of some of its residents.”55 After testimony by several defensewitnesses that the care given to the deceased complied with the regulatorystandard of care, the plaintiff introduced the reports to show that the homehad notice that its care, in fact, was not in compliance with those regulations.56

The Texas Supreme Court agreed with the appellate court that this was noterror, as the defendants had “opened the door” for their use by the testimonyof their own witnesses and further found that there was suf� cient additional

46 Id.47 BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 576 (1996).48 Michael L. Rustad, Unraveling Punitive Damages: Current Data and Further Inquiry, 1998 WIS. L.

REV. 15, 40.49 34 S.W. 3d 887 (Tex. 2000).50 Id. at 891.51 Id.52 Id.53 Id.54 Id. at 905.55 Id.56 Id. at 906.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 121

evidence of improper care for the jury to have rendered a verdict for theplaintiff even without the survey reports.57

Such a use of regulatory inspection reports can facilitate the plaintiff’sability to prove negligent care by creating a speci� c standard of care againstwhich the home’s actual care can be measured; thus, the alleged maltreatmentcan be more easily established. When a defendant asserts that the care given toits residents was normative, these inspection reports are an appropriate meansof establishing the truth of that assertion. As such, a statutory provision fortheir use to establish a prima facie case for a compensable punitive damageaward would be an essential component of a legislated private right of actionfor nursing home residents.

III. FEDERAL AND STATE REFORM EFFORTS

The federal government and each state participating in Medicare andMedicaid share responsibilit y for oversight of the nation’s 17,000 nursinghomes.58 Under federal guidelines, nursing homes undergo periodic inspec-tions, called surveys.59 Homes with serious de� ciencies in their quality of careare subject to various sanctions.60 The federal nursing home reform legisla-tion, with its statutory amendments, changed the focus of the federal standardsfrom a home’s capability to provide care to the actual provision of care.61 Asa consequence, the range of enforcement sanctions was greatly expanded.62

By imposing civil monetary penalties, Congress intended that these sanc-tions would “create a strong incentive to maintain compliance with federalstandards.”63 Under these amendments, civil monetary penalties could be im-posed on a facility for each day it was found to be noncompliant with federalstandards, even if the de� ciency was subsequently corrected.64

These regulatory amendments became effective in July of 1995.65 A re-view of the actual impact of these additional sanctions has shown that theyhave not had the intended deterrent effect.66 National data show an “uncom-fortably high” proportion of nursing homes with high levels of de� cient care;at least 40% of nursing homes previously cited for care problems continued to

57 Id. Under rules of evidence, even though the reports are barred from direct use against the defendant,they can be introduced in cross-examination if the defendant refers to them during direct examination,as the defendant did in this case.

58 See Scanlon, supra note 24, at 3.59 Andrew Kramer, M.D., Testimony before the Senate Special Committee on Aging, June 30, 1999, 1999

WL 458229, at *1.60 See generally Scanlon, supra note 24.61 Id. at 5.62 Id.63 Id. at 6.64 Id.65 Id. at 7.66 See, e.g., id. at 8.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

122 SCOTT

be noncompliant .67 This high level of recidivism is due, in part, to proceduralsafeguards that prevent timely enforcement against the facility. The statutoryscheme in place for imposition of these monetary penalties also prevents col-lection of the � ne until the appeals process is � nal.68 One large Texas nursinghome chain appealed 62 of the 76 civil monetary � nes imposed on it, delay-ing payment of � nes totaling $4.1 million.69 Additionally, states may grant thecited nursing home a grace period during which de� ciencies can be corrected,as well as a notice period before the sanctions can take effect.70

Many states that recognize the serious nature of this quality of care prob-lem have created statutory rights of action under which individual residentsmay sue nursing homes.71 The purpose of these statutes is to seek increasedcompliance with statutory standards of care through private legal action. Inone Illinois case, the court commented that the purpose of the private right ofaction created by the Illinois legislation “was to make nursing home residentsprivate attorneys general.”72 Likewise, the Missouri Supreme Court has heldthat the purpose of Missouri’s legislated private right of action was to “bringabout compliance with the provisions of the [state’s Omnibus Nursing Home]Act by adopting the private attorney general concept.”73

Unfortunately, the provisions of the various state laws that provide forprivate litigation are far from uniform. The Elder Abuse Act of Oregon,adopted in 1995 (and amended in 1999), provides a private cause of action,allowing for punitive damages against a person who commits elder abuse.74

Before liability can be imposed, however, the accused person or facility must� rst be convicted of criminal elder abuse.75 Because the burden of proof incriminal cases is generally higher than the proof required in civil cases, thisputs an additional burden on the plaintiff .

Missouri allows private litigation against facilities and their owners forviolations of the resident’s rights enumerated within the Omnibus NursingHome Act.76 Actual and punitivedamages are recoverable, as well as attorney’sfees and costs; however, punitive damages are limited by statute to $500 or� ve times the amount of special damages, unless the damages are the result ofan intentional act or omission.77 Before a civil suit can be � led, however, theresident or resident’s estate must � rst � le a complaint with the state attorney

67 See id. at 7.68 Id. at 11, 12.69 Id. at 10.70 Id. at 8.71 See supra note 17.72 Berlak v. Villa Scalabrini Home for the Aged, Inc., 671 N.E.2d 768, 772 (Ill. App. 1996).73 Stif� eman v. Abrams, 655 S.W.2d 522, 530 (Mo. 1983).74 OR. REV. STAT. § 124.005-.40 (2000).75 Id. § 124.115.76 MO. REV. STAT. § 198.093 (2000).77 Id.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 123

general’s of� ce within a prescribed period. If the attorney general’s of� cefails to initiate legal action within 60 days, then the plaintiff may pursue acivil lawsuit.78 Additionally, an owner or operator of a nursing home may beable to avoid all statutory liability by showing that they “exercised all carereasonably necessary to prevent the deprivation and injury.”79 This begs thequestion whether the statutory rights are “reasonable.” If so, then a violationof those rights should constitute a failure to exercise reasonably necessarycare.

California also authorizes private litigation for elder abuse. If the plain-tiff meets the “clear and convincing” standard of showing that the defen-dant “has been guilty of recklessness, oppression, fraud, or malice in thecommission of this abuse,” then the plaintiff may be awarded punitive dam-ages, attorney’s fees, and costs incurred through litigation.80 Statutoryrestrictions imposed on the plaintiff who wishes to seek punitive damagesfrom the employer of a person found guilty of such abuse includeproving that the employer had “advance knowledge of the un� tness of theemployee and employed him or her with conscious disregard of the rightsand safety of others.”81 When the employer is a corporation, as is oftenthe case with nursing homes, “the advance knowledge and conscious dis-regard, authorization, rati� cation or act of oppression : : : must be on thepart of an of� cer, director, or managing agent of the corporation.”82 Thatprovision essentially shields the nursing home conglomerate from liabilityfor the acts of its employees. Thus, it seems to ignore basic agencyprinciples.

Ohio’s private right of action is contained in the statutory scheme, en-titled “Nursing Homes Patients’ Rights.”83 Before it was amended in 1998,this statute allowed the recovery of punitive damages if the plaintiff couldshow that the resident “received inappropriate or inadequate medical treat-ment or nursing care.”84 As amended, however, the plaintiff must now proveby clear and convincing evidence that the defendant acted or failed to act withdemonstrated “malice, aggravated or egregious fraud, oppression, or insult,”or authorized such actions or omissions by an employee that resulted in actualdamages.85 This is a very high standard of proof, similar to that required undercommon-law tort actions.86

78 Id.79 See id. § 198.093(4).80 CAL. WELF. & INST. CODE § 15657 (West 2000).81 CAL. CIV. CODE § 3294(b) (West 2000).82 Id.83 OHIO REV. CODE ANN. § 3721.17(I) (1)-(3) (West 2000).84 Blancett v. Nationwide Care, Inc., 1999 WL 3958, at *5 (Ohio App. 1998).85 OHIO REV. CODE ANN. § 2315.21(B) (1)&(2) (West 2000).86 See, e.g., First Healthcare Corp. v. Hamilton, 740 So. 2d 1189, 1197 (Fla. App. 1999).

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

124 SCOTT

Finally, the Illinois Nursing Home Reform Act initially allowed trebledamages as a form of punitive damages for the successful plaintiff.87 Thatprovision has been repealed by the legislature,88 though a plaintiff can stillrecover punitive damages under nonstatutory common-law tort claims, withthe “malicious or willful” burden of proof.89 Under the Illinois statute, anemployer or licensee can be held liable for the intentional or negligent actor omission of their agent or employee.90 This is consistent with establishedagency principles.

One state, Washington, speci� cally discourages judicial remedies fornursing home residents.91 Because the legislature intended that residents, orinterested parties, “use the least formal means” necessary to address careproblems, this regulation states that it does not “create any right of action : : :

beyond those in existence under : : : common law.”92 Recourse for the residentis through either “direct discussion” with facility personnel or state or federalregulatory authorities.93

Additionally, Wisconsin’s statutory right of action for nursing homeresidents is limited to allowing an action for mandamus against the stateenforcement agency (an order that the agency act on the resident’s behalf)or injunctive relief against the facility.94 Thus, without some type of gov-ernmental intervention, nursing home residents are largely unprotected. It isdoubtful, however, given the limited nature of public resources, that publicaction against facilities could be taken easily or effectively. Judicial responseto nursing home resident-plaintiff s has been varied in the award of punitivedamages.

Judgments in nursing home litigation brought under the relevant statuteshave yielded varying results. In Conservatorship of Gregory v. BeverlyEnterprises, Inc.,95 the California plaintiff was awarded $365,580.71 in com-pensatory damages and $94,720,450 in punitive damages, which were re-duced by the trial court, with the plaintiff’s consent, to $124,480.57 and$3 million respectively.96 The 66-year-old plaintiff broke her hip and shoulderin a fall in 1995, while a resident at the defendant’s nursing home facil-ity, and subsequently successfully sued the defendants for elder abuse underthe Elder Abuse and Dependent Adult Act, as well as for negligence and

87 210 ILL. COMP. STAT. 45/3-602 (2000), in its preamended form, read: “The licensee shall pay 3 times theactual damages, or $500, whichever is greater : : : .”

88 The amended statute, which simply dropped reference to treble damages, took effect in 1995.89 See Berlak, 671 N.E.2d at 768.90 210 ILL. COMP. STAT. 45/3-601 (2000).91 WA. REV. CODE § 70.129.170 (2000).92 Id.93 Id.94 WIS. STAT. § 50.10 (1998).95 95 Cal. Rptr. 2d 336 (Cal. App. 2000).96 Id. at 338.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 125

fraud.97 The defendants challenged the verdict, albeit unsuccessfully, on sev-eral grounds; the appellate court focused on the challenge to the trial court’sjury instructions .98

The trial court instructed the jury on the legal de� nitions of “phys-ical abuse” and “neglect” by using state and federal regulations to de� nethe standard of nursing home care.99 The defendants claimed that the use of“vague instructions based on administrative regulations allowed the jury totransform a simple negligence case involving [the plaintiff] into a referen-dum on anything that happened to residents at Beverly Manor at any point intime.”100 The court disagreed, � nding “no authority to suggest a party may notbase [jury] instructions on relevant state or federal regulations in the propercase,” agreeing instead with the trial court that the quoted regulations were“designed to protect nursing home residents by de� ning the care that wasdue.”101 This ruling is consistent with the idea that if state and federal reg-ulations de� ne the standard of care for nursing homes, then violations ofthose regulations should create liability for owners/operators of nursing homefacilities. Punishing owners/operators through the imposition of punitive dam-ages may have a deterrent effect that other types of damage awards cannotprovide.

In First Healthcare Corp. v. Hamilton,102 a Florida jury awarded theestate of a nursing home resident, who wandered away from the defendant’snursing home and accidentally drowned, $4.5 million in punitive damages.103

The deceased’s estate brought both statutory and common-law claims.104

Punitive damages were awarded for the defendant’s violation of a Floridastatute,105 which de� nes the standard of care in Florida nursinghomes.106

The deceased had been placed in the nursing home because he requiredclose supervision after being stricken with dementia.107 He had previouslywandered off the facility premises a number of times and had been foundacross a busy street.108 The sliding door that opened to the outside from hisroom was stuck in a position that allowed him to get out of his room easily.The resident’s wife complained to the defendants for over a year but the door

97 Id.98 See generally id. at 339-42.99 Id. at 339.

100 Id. at 340.101 Id. at 342.102 740 So. 2d 1189 (Fla. App. 1999).103 Id. at 1196.104 Id.105 FLA. STAT. § 400.023 (1999).106 Hamilton, 740 So. 2d at 1197.107 Id.108 Id.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

126 SCOTT

was never repaired.109 Additionally, she had requested that her husband beequipped with a device that would activate an alarm if he left the building,which the defendants also failed to do.110

The defendants appealed the punitive damage award on two grounds:(1) that the evidence did not justify an award of punitive damages; and(2) that they did not have the ability to pay the amount awarded.111 The statuteallowed a punitive damage award for conduct that was “willful, wanton, grossor � agrant : : : or consciously indifferent to the rights of the resident.”112 Afternoting that this was similar to the common-law standard for punitive damages,the appellate court held that the evidence in this case was suf� cient to allowthe punitive damages award to stand.113

Even if the claim brought by the plaintiff is not based on state law, inpractice, courts often examine state and federal regulations as evidence of theappropriate standard of care.114 In one case, for example, Saunders v. BeverlyEnterprises,115 an Oregon jury awarded the estate of a deceased resident of thedefendant’s facility $1 million in punitive damages.116 The court found that thedefendant violated federal regulations that require facilities to comply withphysician’s orders in the use of restraints.117 Instead of seeking a physician’sorder for use of restraints with this resident, the facility used computerizednursing order forms, that required the resident to be restrained 24 hours aday.118 In an effort to free himself from the restraints, the resident obtained alighter and set himself on � re. Two weeks later, the man died from second-and third-degree burns to his torso and neck.119

Atother times, the results are disappointing for the plaintiff . In Abrahamsv. King Street Nursing Home, Inc.,120 a New York court found no evidenceof negligence in the nursing home’s failure to restrain a resident withouta physician’s order, as required by law and facility policy.121 In Makas v.

109 Id.110 Id.111 Id. at 1196.112 Id. at 1197.113 Id.114 See, e.g., Marshall B. Kapp, Malpractice Liability in Long-Term Care: A Changing Environment, 24

CREIGHTON L. REV. 1235 (1991); Quin, supra note 3, at 658; Julie A. Braun & Elizabeth A. Capezuti,The Legal and Medical Aspects of Physical Restraints and Bed Siderails and Their Relationship toFalls and Fall-Related Injuries in Nursing Homes, 4 DEPAUL J. HEALTH CARE L. 1, 32 (2000). See alsoKlein v. Columbia Hotel Corp., 49 Cal. Rptr. 2d 60, 64 (Cal. App. 1996) (relying on state licensingregulations in establishing the appropriate standard of care); Dusine v. Golden Shores ConvalescentCtr., 249 So. 2d 40, 41 (Fla. App. 1991) (approving the admission of a state regulation).

115 See Braun & Capezuti, supra note 114, at 37, 38.116 Id.117 Id. at 38.118 Id.119 Id.120 664 N.Y.S.2d 479 (N.Y. 1997).121 Id. at 480.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 127

Hillhaven,122 the court found that the state nursing home patients’ bill of rightsprovisions were too general and ambiguous to determine whether a standardhad been violated.123

While some states, like Texas, restrict the use of statutory violationsdirectly as evidence of the nursing home’s improper care,124 they can be used toshow that the facility was on notice that their care practices were substandard,or in jury instructions on appropriate standards of care within the industry.125

On the other hand, some statutes allow nursing homes to escape liability if theycan prove that the care was reasonably necessary to prevent the deprivationor injury alleged.126

IV. WHAT STUDIES SUGGEST ABOUT PUNITIVEDAMAGE AWARDS

Most cases do not produce such dramatic results, though there is someevidence that this may be changing. As the public debate over punitive dam-ages increased, several institutions undertook empirical studies of the patternof punitive damage awards in the United States.127 Though these studies weredone independently, using various forms of data,128 all of them reached re-markably consistent results. First, all of the studies concluded that punitivedamage awards are rare.129 In fact, these studies showed that, unless the caseinvolved an intentiona l tort or was a business-related claim, “punitive damageswill almost never be awarded.”130

Second, the area of nursing home litigation was one area found to showan increasing number of punitive damage awards.131 These awards are usuallyassessed against nursing home chains, but only to punish the most egregiousconduct.132 In 45% of the cases analyzed in one study, punitive damages werebased on an extreme deviation from the accepted standard of care or neglect

122 589 F. Supp. 736 (M.D.N.C. 1984).123 Id. at 742.124 Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.2d 887 (Tex. 2000).125 Id. See also Conservatorship of Gregory, 95 Cal. Rptr. 2d 336, 342 (2000).126 See, e.g., MO. REV. STAT. § 198.093(4) (2000); N.Y. PUB. HEALTH L. § 2801-d(2) (McKinney 2000);

W. VA. CODE § 16-5C-15(c) (2000); D.C. CODE ANN. § 32-1453(c) (1998).127 See Rustad, supra note 48, at 17. This article analyzed the results of various studies done by the

RAND Institute, the American Bar Foundation, Landes and Posner, Rustad and Koenig, the GAO, andthe Department of Justice.

128 Id. at 19. The studies used nationwide published case reports, research that focused on speci� c areasof law, such as products liability or medical malpractice, regional jury verdicts, and other nationaldatabases.

129 Id. at 54.130 Id. at 55.131 Id. at 24.132 Id.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

128 SCOTT

or abandonment of residents.133 Still, the total amount of punitive damagesawarded in the last three decades against health providers, which includesnursing homes, has been less than $5.6 billion.134 A few very large awardsaccount for much of the total; a quarter of the medical-related punitive damageawards consisted of $50,000 or less.135 The trend today, according to thesestudies, has been to make the standard for award of punitive damages morerigorous. 136 Available empirical evidence illustrates that punitive damages“are rarely awarded unless the conduct punished is truly inimical to the publicwelfare or safety.”137

CONCLUSION

Although more states have created greater protection for nursing homeresidents through legislation that imposes liability on facilities for violationsof federal and state regulations, and also allows punitive damages, these statesremain in the minority. Most state legislation either imposes limitations onsuch lawsuits or simply fails to provide statutory protection for nursing homeresidents at all. Attorney’s fees and the cost of litigation alone can preventresidents from pursuing a claim against a nursing home. When a state lawauthorizes these types of lawsuits, but does not include a provision for thesecosts, most residents have little ability to pursue such a claim.138 By creatinga statutory cause of action for violations of regulatory standards, the need toestablish the standard of care and its violation is greatly simpli� ed, and maypotentially reduce litigation costs as well.

Statutes that premise a cause of action on violation of an enumeratedpatients’ “Bill of Rights,” reduce the defendant’s ability to escape liability.This type of litigation has proven successful. When these statutes also includea provision for attorney’s fees and the costs of litigation, attorneys may be lesshesitant to represent such litigants.139 To provide a disincentive for frivolouslawsuits, such statutes should include a provision awarding defense attorney’sfees if it could be established that the plaintiff acted in bad faith in bringingthe case.

Because punitive damages generally are not favored by courts, a statutoryprovision allowing automatic recovery of punitive damages, but establishing

133 Id. at 50, 54.134 Id. at 43.135 Id. at 43, 44.136 Id. at 49.137 Id. at 48.138 See, e.g., Harris v. Manor Healthcare Corp., 489 N.E.2d 1374, 1383 (Ill. 1986) (the court acknowledged

that, in the absence of being awarded attorney’s fees and costs, residents likely would forgo suinglicensees for violations of the state nursing home law).

139 Heath R. Oberloh, A Call to Legislative Action: Protecting Our Elders from Abuse, 45 S.D. L. REV.655, 664 (2000).

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14

LAWSUITS AGAINST NURSING HOMES 129

both a maximum and minimum recovery, would enhance the force of sucha statute. For example, provisions for treble damages can compensate theresident and penalize the nursing home at the same time. Without a suf� cientdeterrent effect, even a statutory cause of action will give little protection tonursing home residents. As one federal of� cial said: “The 1.6 million elderlyliving in nursing homes are among the sickest and most vulnerable populationsin the United States.”140 A strong economic penalty for maltreatment of thesepeople can only help improve their quality of life.

140 See Scanlon, supra note 24, at 1.

Dow

nloa

ded

by [

Yor

k U

nive

rsity

Lib

rari

es]

at 1

7:20

11

Nov

embe

r 20

14