Court OKs Class Action Lawsuit v. Laguna Honda Hospital

Legal Woes Haunt Laguna Honda’s Joyous Re-opening

by Dr. Derek Kerr and Dr. Maria Rivero

• • • • • • • August 2024 • • • • • • •

On July 26th, SF Superior Court Judge Andrew Y.S. Cheng approved a Class Action lawsuit (Case #: CPF-20-517064) against Laguna Honda Hospital (LHH), its former CEO Mivic Hirose, the Department of Public Health (DPH), and the City. After four years of legal wrangling, his 14-page decision delivers both a legal and a public relations setback to the hospital and its overseers.

After hearing from the three law firms representing the Plaintiffs and Deputy City Attorneys representing the Defendants, Judge Cheng overruled the City’s objections and approved the Plaintiffs’ motion for class certification. His ruling was buttressed by a review of the qualifications of the law firms involved. All reported relevant experience with elder abuse cases and/or Class Action litigation. Interestingly, two of the key plaintiff lawyers, Kathryn Stebner and Anne Marie Murphy are also Board Members of the California Association for Nursing Home Reform a venerable non-profit dedicated to improving the welfare of Nursing Home residents.

Their clients, Tommy Johnson (aided by his sister Rev. Doris White) and “John Doe,” submitted affidavits showing they are long-time LHH residents who assert their rights and privacy were violated when LHH staff took and shared photos of them without consent or medical purpose. The City repeatedly denied their individual claims for damages. Now, they are embedded in the Class Action framework.

Scandal Backgrounds

The Westside Observer previously covered the background of this case. Briefly, in March 2019, LHH discovered that a handful of rogue nursing staff had taunted and covertly photographed distressed patients. These rogue nurses distributed the photos to amuse their friends. That was illegal—a violation of patient confidentiality. Up to 130 patients were photographed without consent, per an LHH investigation. Worse, the news was not forthrightly reported to the Public Guardians who were responsible for some of these patients incapacitated by dementia. Outraged, the Public Guardian’s Office sued the hospital.

Back in 2018, 5 patients were drugged with non-prescribed morphine, methadone, and tranquilizers, resulting in life-threatening overdoses and emergency hospitalizations. One patient had eight urine tests showing non-prescribed narcotics between January and August 2018. He died that September. An LVN pilfered the medications and illegally administered them to restless, inconvenient patients. His thefts and druggings were fodder for jokes circulated among staff via text messages. Nobody reported the violations. Six involved LHH staffers were fired.

In July 2021, two patients self-administered fentanyl and methamphetamine, resulting in near-fatal drug overdoses. State inspectors found rampant drug use and smuggling, as well as numerous unrelated deficiencies. Several of these were serious, prompting “;Immediate Jeopardy” citations and fines. That led the federal Centers for Medicare and Medicaid Services (CMS) to decertify LHH, suspend payments, and block new admissions in April 2022.

Strangely, the transfer-trauma fatalities that occurred during LHH’s 2022 rush to comply with a federally imposed patient evacuation order are not mentioned in this lawsuit. LHH did receive minor citations for sloppy discharge planning. However, part of the blame rested on the draconian demands of the Centers for Medicare and Medicaid Services.

As the Westside Observer reported, LHH hired independent consultants to identify the root cause of LHH’s decertification. The consultants concluded; “Leadership, management, facility staff, and medical staff do not have knowledge of SNF (Skilled Nursing Facility) regulations and do not know how to operationalize the regulations in a very large SNF… how to manage staff, and how to educate staff to ensure sustainable, substantial compliance.” They added, “This results in regulations and best practices not being implemented and LHH not operating in alignment with SNF industry standards of care." It’s hard to imagine a more damaging assessment.

What Are The Patient Classes?

The Plaintiffs proposed two broad classes of injured patients;
1) Patients Rights Class: all LHH patients from April 2020 - when plaintiffs first sued - to August 2023. Because LHH was shut down, Plaintiffs allege that LHH’s “noncompliance with statutory authorities" amounted to a violation of patients’ rights. Among the subclasses identified are:
a) Victims of verbal, mental, sexual or physical abuse.
b) Victims of chemical restraints (e.g. non-medical sedation or drugging)
c) Victims of privacy violations (e.g. photos taken and shared without consent)
2) Confidentiality Class: all LHH patients from March 2017 to present who were photographed by staff without their consent and for “non-medical reasons.”

This Class Action motion, initially filed in January 2024, was Court-approved seven months later.

Denying the Root Cause of LHH’s Failure

City officials have long ignored or minimized the root cause of LHH’s dysfunction and decertification. Just look at the self-congratulatory Press Release announcing LHH’s re-opening. There’s a reluctance to probe why LHH succumbed to mismanagement.

For example, in a recent Westside Observer survey of D-7 supervisorial candidates, Supervisor Myrna Melgar downplayed the disorder and ignored the deformities imposed on LHH by the DPH Flow Project. In contrast, candidates Stephen Martin-Pinto and Matt Boschetto provided sound responses focused on accountability. However, Supervisor Melgar did acknowledge the need to “plan to build a facility” for folks with mental and addiction disorders.

Initially, the 2004 Project forced unruly younger patients from SFGH into LHH without providing the resources to safely care for them. Crucially, it uprooted LHH’s Skilled Nursing mission, experts, and protocols to convert LHH into a repository for “hard-to-place" patients at SF General Hospital. Eventually, LHH was saddled with incompetent, rule-trampling managers installed by the DPH and tolerated by quisling Health Commissioners. They all ran roughshod over State and Federal regulations, running LHH like an Acute Care hospital rather than a Skilled Nursing Facility. That resulted in LHH’s decertification. Even LHH’s own richly paid consultants highlighted the ignorant negligence of the Flow Project-backed LHH “leadership.”

Implications of the Class Action Lawsuit

The approval of the Class Action lawsuit does not validate the claims made by the Plaintiffs. As Judge Cheng noted, “At this time, the Court is only determining whether the dispute presents common questions amenable to common answers, not whether Plaintiffs’ legal theories are viable – and Plaintiffs will need to meet this burden later on.” Judge Cheng ordered a Meet and Confer for the opposing parties by August 27th. The goal is to determine how to notify patients covered by the Class Action and to propose a “plan of administration…administrator and total costs and allocation of costs among the parties."

Given how vigorously the City Attorneys opposed the Class Action motion, it clearly poses a threat. For one thing, the court acknowledged a commonality of grievances among large groups of LHH patients. In fact, Judge Cheng wrote; "…the evidence appears consistent with the Plaintiffs’ allegations of systemic governance failure that was ongoing in 2020…" These lapses can no longer be dismissed as "one-off" or "isolated incidents.” LHH’s widespread mismanagement has emerged at the crisis level. Instead of settling a few cases with modest payouts and declaring, "this is not who we are," the City must now grapple with a legal challenge to LHH’s governance as a whole. The perceived threat is proper accountability for the abuse of a civic institution.

Although LHH has been recertified, the Class Action litigation hovers over the hospital, inhibiting any further rule-breaking or breaches of patients’ rights.

Taking this case to trial could expose even more mismanagement and incompetence—a public relations nightmare. Settling the case out of court would be costly and potentially onerous. For instance, Class Action settlements allow for large-scale remedies—including placing intransigent institutions under Receivership. In that case, a Court-appointed Receiver or Special Master would make all major decisions involving LHH. The Health Department, its LHH lackeys, and the City Family could lose control over a hospital they have deformed, exploited, and violated for 20 years. And the public would see that they didn’t get away with it.

Hat Tip: Patrick Monette-Shaw alerted us to the release of Judge Cheng’s decision and suggested topics to cover.

Drs. Rivero and Kerr served Laguna Honda Hospital residents for 20 years and repeatedly exposed management wrongdoing.

August 2024