Center for Medicare Advocacy

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Arkansas Supreme Court Affirms Class Certification in Case Challenging Chronic Understaffing in 12 Golden Living Nursing Facilities in Arkansas

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Former residents at 12 nursing facilities owned by Golden Living in Arkansas (or their special administrators, guardians, or attorneys-in-fact) filed a lawsuit challenging the facilities’ chronic understaffing between December 2006 and July 1, 2009.  Plaintiffs moved for class certification on three claims – breach of the facilities’ standard admission agreement, violation of the Arkansas Long-Term Care Residents’ Rights Act, and violation of the Arkansas Deceptive Trade Practices Act.  After conducting two hearings, the Circuit Court issued an order on July 11, 2014 certifying the class.  The Court found seven issues common to all class members:

  1. Whether Defendants’ standard admission agreement imposes minimum staffing requirements;
  2. Whether Ark. Code Ann. § 20-10-1201, et seq. imposes minimum staffing requirements;
  3. Whether Defendants failed to meet the minimum staffing requirements of Ark. Code Ann. § 20-10-1201, et seq., and the Defendants’ standard admission agreement;
  4. Whether failure to meet the minimum staffing requirements breaches the standard admission agreement;
  5. Whether failure to meet minimum staffing requirements violates Ark. Code Ann. § 20-10-1201 et seq.;
  6. Whether failure to meet minimum staffing requirements of Ark. Code Ann. § 20-10-1201 et seq., is a violation of the Arkansas Deceptive Trade Practices Act; and
  7. Whether [defendants] Leslie Campbell, Cindy Susienka, James Avery, Andrea Clark,

David Mills, Julianne Williams, David Stordy, Larry McFadden, Angela Marlar, Billie Palculict, Sybil Adams, Troy Morris, Avie Singleton, Tracey Burlison, Mincie Thomas, Tommy Johnston, John McPherson, Laurie Herron, Margaret Green, Noreen Bailey, Marsha Parker, and Lisa Hensley are control persons as defined in Ark. Code Ann. § 4-88-113(d)(1) and therefore jointly and severally liable for the damages suffered by the plaintiff class.

GGNSC Arkadelphia, LLC v. Lamb, No. CV-14-1033 (Ark. Supreme Ct., June 4, 2015), pages 7-8, 2015 Ark. 253, http://cases.justia.com/arkansas/supreme-court/2015-cv-14-1033.pdf?ts=1433433637.

The facilities’ filed an interlocutory appeal with the Arkansas Supreme Court, which affirmed the class certification. 

The primary issue raised by the facilities on appeal was whether “the issues common to the class predominate over individual issues.”  Decision 9.  The Court framed the question of predominance: “If a case involves preliminary, common issues of liability and wrongdoing that affect all class members, the predominance requirement of Rule 23 is satisfied, even if the circuit court must subsequently determine individual damage issues in bifurcated proceedings.”  Id. 10. 

In upholding the class certification, the Supreme Court cited an earlier Arkansas case that affirmed class certification for understaffing at a Golden Age facility (then known as Beverly Enterprises), which was also based on violations of the facility’s admission agreement and the state’s Residents’ Rights Act, Beverly Enterprises-Arkansas, Inc. v. Thomas, 370 Ark. 310, 259 S.W.3d 445 (2007).  The Court rejected the facilities’ claim that subsequent case law undermined the Thomas decision, finding that decisions before and after Thomas recognize “a distinction between the individualized issues of recovery and common issues of a defendant’s overall liability.”   Id. 15.  Applying these precedents, the Court found

here, the common, overarching issues concern whether appellants have liability for chronic understaffing under the admission agreement and the asserted statutes.  These central issues can be decided on a classwide basis, and they manifestly predominate over individual issues concerning a class member’s right to recovery, which can be determined in bifurcated proceedings. Id. 16.

The facilities next argued that five of 43 named class representatives’ signing optional arbitration agreements “provides another individual issue that predominates over common issues.”  Id. 16-17.  The Supreme Court rejected the argument.  It could not “conclude that a significant number of class members have agreed to arbitration so as to override the certification of the class.”  Id. 17.

The facilities’ third argument on the predominance issue was that class certification on the admissions agreement claim was inappropriate unless the court first resolved whether residents’ contracts were “standard, identical, or substantially similar.”  Id.  The Court rejected this argument as well, finding that the admissions forms were standard at each facility (as asserted by a ranking corporate officer) and that the facilities “failed to demonstrate that these other agreements are materially different from the standard admission agreement submitted by appellees.”  Id. 17-18.

Addressing the Circuit Court’s “superiority” finding – that class certification was superior to individual adjudications – the facilities argued that addressing understaffing on a classwide basis was “unworkable” when the case involved 12 facilities, with 944 days and 32,031 shifts, over a two-year period.  The Supreme Court affirmed the Circuit Court’s rejection of this argument, noting that “the superiority requirement is satisfied if class certification is the more efficient way of handling the case and is fair to both sides.”  Id. 18.  The Supreme Court found that multiple shifts are not an issue when Arkansas law requires facilities “to submit a written report of all shifts that fail to meet minimum staffing requirements,” citing Ark. Code Ann. §20-10-1407 (Repl. 2014).  Id. 19.  It held that the determination of understaffing would not be “unmanageable simply because twelve facilities are involved.”  Id.

The Supreme Court rejected as “decidedly without merit” the facilities’ argument that the class definition, as described by the Court, was “fatally overbroad and imprecise because it does not limit the class members who suffered an injury and sustained damages as a result of understaffing.”  Id. 20.  The requirement that only those who are harmed participate in the relief awarded “does not translate into a requirement that the definition must include an element of actual harm.”  Id. 20-21.  The Supreme Court continued, “On the contrary, it would be improper to define a class by reference to actual injury because this would require a determination of the merits of a putative class member’s claim.”  Id. 21.

A dissenting opinion by two judges viewed the majority’s opinion as considering, not whether common issues predominate, but “the more abstract question of whether there exists a newly fashioned cause of action by which a person might seek recourse for any liability and wrongdoing.”  Id. 21-22.  The dissent also noted that “questions relating to staffing and the attendant penalties for understaffing are clearly set out in our statutory law.  Ark. Code Ann. §§20-10-1401 – 1410 (Repl. 2014).”  Id. 22.

Arkansas law

The Arkansas law cited by both the majority and dissenting opinions sets out detailed and comprehensive staffing requirements for nursing facilities.  Staffing Requirements for Nursing Facilities, Subchapter 14 of Chapter 10 (Long-Term Care Facilities and Services) of Title 20 (Public Health and Welfare):

  • Sets out direct care staffing requirements by shift, §§20-10-1401 (definitions), 20-10-1402 (staffing standards, established by the Department of Human Services).
  • Defines ratios of staff to residents, §20-10-1403:
    • One direct-care staff to every six residents on the day shift; there must be at least one licensed nurse to every 40 residents, §20-10-1403(a)(1);
    • One direct-care staff to every nine residents on the evening shift; there must be at least one licensed nurse to every 40 residents, §20-10-1403(a)(2);
    • One direct-care staff to every 14 residents for the night shift; there must be at least one licensed nurse to every 80 residents, §20-10-1403(a)(3).
  • Requires at least one licensed nurse per shift for direct care staff, §20-10-1403(e)(3).
  • Requires that a registered nurse (RN) serve as director of nurses, employed full-time for no less than 40 hours per week, §20-10-1404(b)(1).
  • Requires an additional RN at least 16 hours per week “to ensure coverage seven (7) days a week,” §20-10-1404(b)(2).
  • Provides that a person is counted “toward the direct-care staffing ratios only for the time in which the facility can document that the person provides direct care,” §20-10-1405(c).
  • Requires facility to post personnel numbers, §20-10-1406:
    • “Daily, at the beginning each shift, in a prominent place within twenty feet (20’) of the main entrance of the nursing facility and in a location that is readily accessible and visible to residents and visitors,” §20-10-1406(a)(1);
    • The posting is a sign-in sheet, signed by staff members as they report for work and indicating “the time of arrival and departure, all halls, wings, or corridors on which the staff member worked or was assigned, and the total number of hours worked,” §20-10-1406(a)(2);
    • Diagram of the facility must be posted below the sign-in sheet positing, “showing the location of each hall, wing, or corridor,” §20-10-1406(a)(4);
    • Current number of residents must be posted, §20-10-1406(b);
    • Facility must save the records “until the next survey or for eighteen (18) months, whichever is greater,” and make the records available to “any interested person upon a written request,” §20-10-1406(c).
  • Requires facilities to submit to the Office of Long-Term Care, by the fifth day of each month, “a written report of all shifts which failed to meet the minimum staffing requirements,” §20-10-1407(a)(1):
    • Requires facilities determined by the Office to have shown a “pattern of failure to comply” (defined at §20% of the shifts in a month, §20-10-1407(d)) to submit monthly report stating ratios of direct care staff to residents for each shift, §20-10-1407(a)(2);
    • Authorizes the Division to perform random staffing audits to determine compliance, §20-10-1407(e).
  • Authorizes penalties for patterns of failure, §20-10-1408:
    • $2500 for pattern of failure between 20% and 25%, §20-10-1408(a)(1);
    • $5000 for pattern of failure between 25% and 30%, §20-10-1408(a)(2);
      • Prohibition on admission of new residents for at least two weeks, §20-10-1408(a)(2)(B);
    • $7500 for pattern of failure above 30%, §20-10-1408(a)(3)(A);
      • Prohibition on admission of new residents for at least two weeks, §20-10-1408(a)(3)(B);
      • $25,000 if improperly admits new residents, §20-10-1408(a)(4).
  • Authorizes the Department of Human Services to modify staffing requirements in reimbursement is insufficient, §20-10-1409(b)(1); to increase staffing requirements, §20-10-1409(c)(1)(A).

June 22, 2015