Supreme Court upholds most of class action ruling in politically hot nursing home case | Arkansas Blog

Thursday, May 4, 2017

Supreme Court upholds most of class action ruling in politically hot nursing home case

Posted By on Thu, May 4, 2017 at 10:28 AM

click to enlarge MICHAEL MORTON: Class action against his nursing home upheld.
  • MICHAEL MORTON: Class action against his nursing home upheld.
The Arkansas Supreme Court today upheld most of a lower court ruling allowing a class action lawsuit against nursing home owner Michael Morton and one of his nursing homes.

This is the case in which plaintiffs' lawyers ha dunsuccessfully challenged Supreme Court Justice Rhonda Wood's participation in the case

Justice Karen Baker wrote today's majority opinion. She had disclosed in the case that Jeff Hatfield, the husband of her law clerk, Allison Hatfield, was an attorney for the nursing home. Baker's letter said Hatfield wouldn't work on this case.

The lawsuit alleges that Morton understaffs his homes and this results in poor quality care. It wanted class action certification on behalf of residents. Morton and his Robinson Nursing and Rehabilitation Center appealed the class action, a designation that broadens potential damages and often encourages settlements.

Baker's ruling upheld the class certification as to claims related to claims of breach of contract, the Arkansas Deceptive Trade Practices Act and unjust enrichment of the nursing home owner. But the court rejected a claim of negligence as a basis for class action.

She wrote that the law requires proof that breach of contract was the "proximate cause of a plaintiff's injuries" and that negligence "may not be assumed."She wrote:

Even assuming there are questions common to each class member, we cannot say that these common issues clearly predominate over the individual issues. Stated differently, there is "no one set of operative facts" to establish Robinson's liability to any given class member
Chief Justice Dan Kemp, joined by Justices Courtney Goodson and Robin Wynne, filed an opinion dissenting from the reversal on a class action for negligence.

The overarching question relating to the entire class is whether Robinson chronically understaffed its facility in violation ofthe residents' statutory and contractual rights. Here, the majoriry mistakenly delves into the merits of the underlying claims in the class-action case by certifying the class on all claims except negligence. This court has stated that a circuit court may not consider "whether the plaintiffs will ultimately prevail, or even whether they have a cause of action," because "the propriety of a class action is 'basically a procedural question."'  Thus, any underlying claims, such as negligence, are for the jury to decide at trial. Accordingly, I would hold that the circuit court properly granted Phillips's motion for class certification and would affirm.
Justice Jo Hart wouldn't have upheld a class action on any ground. She concurred only as to that part of the majority decision.

This put Rhonda Wood, Shawn Womack and Jo Hart with Baker on the prevailing side on dismissing the negligence claim.

Lawyers challenge Wood's participation because Morton accounted for a significant portion of the money she raised to run for the court and contributed it in the early stages when her nursing home bankroll discouraged challengers. She ran unopposed. She said enough time has passed for her to participate in Morton cases and she did. The Supreme Court refused a request for it to evaluate Wood's participation. Wood's participation came despite her having been sent $40,000 by Morton before the legal beginning of judicial campaigning. She contended she didn't cash any checks before the legal time.

The money for Wood was arranged by former Republican Sen. Gilbert Baker, along with similar contributions by Morton to another judge (and friend of Wood), then-Circuit Judge Mike Maggio. He subsequently was charged with taking a bribe in the form of campaign contributions to reduce from $5.2 million to $1 million a jury verdict against a Morton nursing home. Neither Baker nor Morton were charged.

Baker, too, has been a benefactor of Morton, getting $20,000 of the $27,000 she raised in 2014 from Morton. Jo Hart, who got $23,000 from Morton to pay campaign expenses in her last race, personally thanked Morton's for his support at her investiture. Courtney Goodson got $91,000 from the nursing home lobby in her first race for the court. Wynne got $7,700. Womack made a race for the court after corporate contributions were prevented by a constitutional amendment, but he's a former Republican senator and his corporate support against a trial lawyer all were indications that he'd be a vote on the corporate side of the ledger. As legislator, he sponsored a bill to cap punitive damages, long desired by Morton and others in the nursing home business.

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