Lawsuits charging harm to nursing home residents crawl forward

Lawsuits charging harm to nursing home residents crawl forward

By Thomas Goldsmith and Rachel Crumpler

A federal judge brought up the elephant in the room as he concluded a recent hearing in a lawsuit against a Salisbury nursing home owned by a private equity company. 

“I assume the plaintiffs are elderly and infirm,” U.S. District Judge Thomas D. Schroeder said. “It would be nice to resolve this [case] sooner rather than later for the benefit of the parties.”

Schroeder spoke at a Nov. 10 hearing in a Winston-Salem federal courtroom for a lawsuit filed May 17, 2021, that alleges that the Citadel of Salisbury’s owners harmed residents through understaffing.  

Defendants Simcha Hyman and Naftali Zanziper, principals of the New Jersey-based private equity company Portopiccolo and owners of more than 30 North Carolina nursing homes, have denied the claims. Their company took over the Citadel in February 2020, and that’s when the severe staffing problems began, the lawsuit alleges. 

The plaintiffs are Citadel of Salisbury nursing home residents Sybil Rummage, 92, described as having Parkinson’s disease, and Betty Deal, 74, bedridden and with severe arthritis, according to the suit filed by the Salisbury law firm Wallace and Graham. Given the ages of those plaintiffs, Schroeder suggested that the attorneys make some decisions soon on whether to use mediation in the case instead of heading to a June 1 trial.  

“I’m inclined to stay everything for a reasonable time if folks are truly interested in resolving this,” Schroeder said. He asked that lawyers let him know by the next afternoon.

But the following afternoon was a federal holiday. Court records show no filing by then and emails from NC Health News to attorneys asking about additional filings were not returned by press time. 

Last week’s hearing concerned the plaintiffs’ claim that the owners of the Citadel of Salisbury should face a class-action suit because their actions affected all the nursing home’s residents as a group and they should be compensated for damages.

The lawsuit alleges that Hyman, Zanziper and their related entities failed to provide the necessary levels of staff members, required medicine and supplies. The suit claims that the failures to act occurred when there were COVID-related restrictions on visits to long-term care centers. During that time, residents’ family members were not present to look out for their interests.

As more private equity firms acquire skilled nursing facilities, often homes that already have a low rating by federal regulators, the North Carolina lawsuit represents just one attempt made by frail elderly residents to fight back against deep-pocketed investors. Researchers have found that facilities purchased by such investor-owned firms resulted in increased emergency-department visits, hospitalizations of residents with ambulatory care-sensitive conditions, and overall costs to Medicare. A congressional committee took a look at results of the trend in 2021.

The lawsuit also is taking place against the background of a recent announcement from the Biden administration that it would take more stringent steps to prompt improvement in the problem homes called Special Focus Facilities.

The Citadel of Salisbury spent almost two years as a Special Focus Facility before closing in June after federal regulators withdrew Medicare and Medicaid reimbursement. 

Defendants: Mistakes were made

In the suit, lawyers for the plaintiffs allege that facility owners Hyman and Zanziper deliberately understaffed the Citadel of Salisbury to enhance profits.

Both defendants countered the allegations, filing a 34-page document in June. They denied that either man “acted in breach of any duty, in violation of any laws or engaged in any other alleged wrongful, reckless or wanton conduct that is improper under North Carolina law and deny that any of his conduct proximately caused injury as alleged by Plaintiffs.”

The owners also claimed they have evidence that their Salisbury nursing home made mistakes that resulted in reporting fewer staffing hours than actually occurred to the federal Centers for Medicare and Medicaid Services, which regulates nursing homes.

The defendants, Zanziper and Hyman, have become part of a national discussion of the role of private equity in the long-term care industry. The pair have been the subject of negative media portrayals in The New Yorker, Barron’s and the Washington Post for their takeover and operation of nursing homes. Plaintiffs cited those media accounts as part of the suit as well as resident and staff interviews and state documents.

“Because of the Facility’s dire conditions, it is no surprise that the Citadel of Salisbury became the site of one of the earliest and largest COVID-19 outbreaks at any congregate care setting in North Carolina, as confirmed by testing of numerous residents which occurred on April 10, 2020,” plaintiffs’ attorneys said in the suit. 

Following a March inspection, CMS effectively closed the Citadel of Salisbury by cutting off Medicare and Medicaid payments for resident care. The facility spent 21 months on the Special Focus Facility list of those receiving increased scrutiny, a who’s who of the nation’s worst-performing nursing homes. One of the state’s earliest COVID outbreaks took place there when 151 cases were documented by the state by May 2020

Eighteen residents subsequently died from the disease.

Class action status debated

At the Nov. 10 hearing, attorneys for the facility owners, including Kasowitz Benson Torres of New York City, and plaintiffs’ lawyers Wallace and Graham, argued over whether the case should be heard as a class action. That meant, plaintiffs’ lawyers said, that the two aging residents, Rummage and Deal, are representative of a larger class of more than 100 residents who suffered similar harm and should also be awarded damages. 

During the hearing, Schroeder posed questions on whether the case met standards for class action suits under federal law. According to the rules, the class must be assessed for factors including the number of members, their identification with the group, a legal issue common to all members and the suitability of the representatives. Another factor concerns the question of predominance, that is, whether the legal issues common to the group rise above individual cases and are best tried through a class action. 

“The issue of systemic understaffing is sufficiently central and important to predominate over individual issues,” plaintiffs’ attorneys wrote.

If the case proceeds to trial on the proposed June start date, instead of possible mediation in January as proposed by Schroeder, more than two years will have passed since the elderly defendants first filed the suit. There’s no predicting how long the wait will be for the original plaintiffs, both in poor health, and whether they’d live to see an outcome.

Similar cases drag on

Any residents and families seeking recompense almost certainly have a long road ahead. It’s not uncommon for cases such as these to drag out for years, long enough that original plaintiffs might not live to see any resolution. 

A 2018 class action suit against a Craven County adult care home was certified in July in state court, a seeming victory for residents of Lake Pointe Assisted Living, who charged that the center had failed to provide adequate staffing to meet residents’ needs, serve nutritious meals, hold appropriate activities for residents, and make sure the facility complied with laws, rules and regulations for the safe operation of the facility. 

However, the Craven County suit is ongoing in federal and state court. There was a victory for the plaintiffs in July when the federal Fourth Circuit Court of Appeals found that the insurance company for Lake Pointe had to defend the claims against the facility. And filings in the case continue to accumulate.

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