Ensuring jAssisted Living Quality Through the Courts: … Public Policy Institute, formed in 1985, is part of the Research Group of the AARP. One of the missions of the Institute is

The Public Policy Institute, formed in 1985, is part of the Research Group of the AARP. One of the missions of the Institute is to foster research and analysis on public policy issues of interest to older Americans. This paper represents part of that effort.

The views expressed herein are for information, debate, and discussion, and do not necessarily represent formal policies of the Association.

2000, AARP. Reprinting with permission only. AARP, 601 E Street, N.W., Washington, DC 20049

#2000-22

December 2000

Ensuring Assisted Living Quality Through the Courts:

State Policy Issues Regarding A Consumer Private Right of Action

by

Bruce Vignery Dorothy Siemon

ACKNOWLEDGMENTS

This report is the product of many people’s efforts. Without Don Redfoot’s unflagging skill, perseverance, and diplomacy, the report would never have been finished. Likewise, his colleague at the AARP Public Policy Institute, Faith Mullen, provided most valuable insights, suggestions, and support. James Burton and Stephani Johnson, law clerks at AARP Foundation Litigation brought enthusiasm and remarkable initiative to the project. The feedback from a number of anonymous reviewers is greatly appreciated. On the production side, Linda Hill and Vanessa A. Woodard-Kinard provided invaluable support.

Table of Contents

FOREWORD.................................................................................................................................. i EXECUTIVE SUMMARY…...…………………………………………………………………ii PART I. THE PRIVATE RIGHT OF ACTION ....................................................................... 1

A. Introduction ........................................................................................................................... 1 B. Organization of the Report .................................................................................................... 2 C. Methods ................................................................................................................................. 2

PART II. EXISTING LAWS AND KEY PROVISIONS ......................................................... 3

A. Scope of the Right of Action................................................................................................. 3

1. Types of Facilities ............................................................................................................... 3 2. Standing: Types of Plaintiffs............................................................................................... 4

B. Remedies Available under the Right of Action..................................................................... 6

1. Money Damages.................................................................................................................. 6 2. Injunctions and Other Equitable (Non-Money) Remedies.................................................. 6 3. Writ of Mandamus .............................................................................................................. 7 4. Attorneys’ Fees .................................................................................................................. 7

C. Other Statutory Features........................................................................................................ 9

1. Court Dismissal of De Minimis Claims .............................................................................. 9 2. Prohibitions Against Waiver of Liability or Waiver of the Rights to Pursue Legal Claim Contract Clauses....................................................................................................... 9 3. Prohibition Against Exhaustion of Other Remedies Requirements .................................. 10 4. Limited Notice Requirements ........................................................................................... 10 5. Exemption of Damages Awards as Setoffs for Governmental Aid Provided ................... 10 6. Cumulative Versus Noncumulative Remedies.................................................................. 10

PART III. OTHER POTENTIAL LEGAL APPROACHES TO PROTECTING ASSISTED LIVING RESIDENTS ............................................................................................ 13

A. More Effective Enforcement of Regulations ...................................................................... 13 1. Practical and Political Obstacles to Enhanced Enforcement............................................. 13 2. Facility Focus Does Not Address Individual Problems .................................................... 13 3. Remedies Provided Do Not Compensate Individuals Harmed ......................................... 13

B. Contract Law ....................................................................................................................... 14

C. Tort Law .............................................................................................................................. 16

D. Landlord-Tenant Law.......................................................................................................... 18 E. Civil Rights Laws ................................................................................................................ 18 F. Consumer Protection Laws .................................................................................................. 20

PART IV. ARGUMENTS AGAINST A PRIVATE RIGHT OF ACTION ........................ 20

PART V. CONCLUSIONS AND RECOMMENDATIONS ................................................ 22

REFERENCES............................................................................................................................ 24 CASES…………………………………………………………………………………...24

STATUTES...................................................................................................................... 26

ARTICLES AND REPORTS......................................................................................... 28

List of Tables

TABLE 1: PERSONS AUTHORIZED TO SUE, BY STATE.................................................. 5 TABLE 2: REMEDIES AVAILABLE UNDER STATE PRIVATE RIGHT OF ACTION STATUTES.................................................................................................................................... 8 TABLE 3: STATE PROVISIONS REGARDING THE RIGHT TO SUE............................ 12

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FOREWORD

The Assisted Living Quality Initiative, a report issued by AARP, the Alzheimer's Association, and four provider associations, set as one of its primary goals to promote “the highest possible quality of life for older persons and consumers with disabilities by advocating for the assisted living philosophy of independence, privacy, dignity and autonomy.” The phenomenal growth in the assisted living industry in recent years attests to the consumer demand for long-term care options that recognize these principles. Maintaining these principles in the daily operations of assisted living facilities is not an easy proposition, even among well-meaning providers dedicated to these ends. Building an approach to minimum standards for the industry, as well as the monitoring and enforcement of those standards, was the focus of the Assisted Living Quality Initiative. One issue on which it was impossible to develop a consensus was the need for a private right of action so that consumers could pursue legal action when the rights provided in state minimum standards were violated. This report makes a valuable contribution to the discussion of a private right of action by: !"Clarifying what a private right of action is; !"Researching the distinctive provisions in state statutes related to private rights of action; !"Explaining the differences between a private right of action used to enforce state (or federal)

minimum standards and other potential legal actions available to consumers; and !"Providing clear recommendations geared to state officials or advocacy groups considering a

private right of action for consumers in assisted living facilities.

While the authors, Bruce Vignery and Dorothy Siemon of AARP's Litigation Foundation, are clearly convinced of the need for a private right of action, proponents on all sides of the issue should find the information in the report useful. Moreover, by illustrating the range of approaches used by states and the gaps remaining in other legal approaches, the report should contribute to resolving differences among interested parties in states pursuing this issue.

Donald L. Redfoot Senior Policy Advisor AARP Public Policy Institute

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EXECUTIVE SUMMARY Part I. The Private Right of Action Background

A private right of action exists when a statute authorizes a person aggrieved by particular actions or inactions listed in the statute to bring a lawsuit. With a private right of action, assisted living residents can sue a provider or the government for breach of statutory or regulatory rights, duties, or responsibilities. The primary purposes of the private right of action are to obtain compensation for injuries and to ensure performance of duties. A secondary purpose of the private right of action is to supplement traditional governmental regulatory enforcement with private oversight and enforcement.

Some legislatures are establishing specific rights for both nursing home and assisted

living residents and empowering residents to enforce these rights rather than relying solely on state regulators. A private right of action is particularly suitable for injuries such as violations of residents' rights to autonomy, dignity, or privacy, which are not likely to produce large damage awards. Purpose

The purpose of this report is threefold: to identify which states have statutory private rights of actions, to assess the efficacy of alternatives to a statutory private right of action, and to recommend the elements needed in order to craft an effective statutory private right of action. Part II presents the findings of a state-by-state analysis of statutes that create private rights of action for recipients of assisted living services (and recipients of other long-term care services). Part III discusses potential legal tools other than a private right of action for assisted living consumers, looking at both theoretical and practical issues related to their application. Part IV briefly discusses industry concerns about the costs of litigation and the potential for “frivolous” lawsuits. Part V concludes with recommendations for states choosing to enact a private right of action for recipients of assisted living services. Methods

The researchers examined the statutes of all 50 states and the District of Columbia to determine which states have enacted a private right of action for long-term care residents as of July 2000. The report has a particular focus on assisted living residents and aims to discover elements in common with other types of long-term care recipients as well as elements unique to assisted living. In addition, the researchers reviewed existing case law and commentaries to learn what other legal recourse might be available to residents harmed in assisted living facilities. The researchers also examined reported cases and legal commentaries concerning the private right of action to try to understand how and under what circumstances the laws applied. A limitation to this research is that cases that are settled, withdrawn prior to judgment, dismissed, or otherwise disposed of without an appeal are unreported.

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Part II. Existing Laws and Key Provisions The authors have identified 20 states and the District of Columbia as having enacted a private right of action enabling recipients of long-term care services to enforce rights conferred upon them by statutes or regulations. These states differ markedly on the following characteristics: !"Scope of the Private Right of Action – States differ in the scope of the right of action

offered in two major ways:

♦ Types of Facilities Covered – In 16 states and the District of Columbia, the private right of action, initially enacted for nursing facility residents, has been extended to residents of assisted living facilities.

♦ Types of Plaintiffs – All states with a private right of action recognize the right of residents to sue. California and the District of Columbia extend the right to sue to residents' representatives and/or their advocates, and Georgia and New Hampshire allow any aggrieved person to bring an action.

!"Types of Remedies – States also differ in the types of remedies they allow to aggrieved

parties:

♦ Money Damages – All but two states (Wisconsin and North Carolina) allow money damages as a remedy. Arkansas, Connecticut, Florida, Georgia, Illinois, Kentucky, Maine, Missouri, New Jersey, New York, Ohio, Oklahoma, West Virginia, and the District of Columbia allow for both compensatory and punitive damages.

♦ Equitable Relief – The 20 states and the District of Columbia allow for equitable remedies, such as injunctions or temporary restraining orders, when money will not compensate the injury or when future injurious behavior may result.

♦ Writs of Mandamus – Wisconsin is the only state that relies primarily on writs of mandamus as a remedy for private rights of action.

♦ Attorneys’ Fees – Five states and the District of Columbia allow only prevailing plaintiffs to recover attorneys’ fees, and eight states do not allow recovery of attorneys’ fees at all. Other states allow the prevailing party to recover fees.

!"Other Provisions in State Law – States have often added distinctive provisions regarding

private rights of action, including:

♦ Court Dismissal of De Minimis Claims – To counter the possibility of abuse of the right of action, Maine allows the court to dismiss minor claims based on residents’ rights violations.

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♦ Prohibitions Against Waiver of Liability or Waiver of the Rights to Pursue Legal

Claim Contract Clauses – California, Illinois, New York, North Dakota, West Virginia, and the District of Columbia specifically prohibit a waiver of the right of action in a contract as void and against public policy.

♦ Prohibition Against Exhaustion of Other Remedies Requirements – Connecticut, Illinois, Maine, New York, West Virginia, and the District of Columbia expressly provide that a plaintiff is not required to exhaust administrative remedies prior to bringing a lawsuit.

♦ Limited Notice Requirements – Maine and Missouri require some notice to state officials prior to filing a suit, the theory being that the state might want to take corrective action on its own or join the case.

♦ Exemption of Damages Awards as Setoffs for Governmental Aid Provided – Unless a law states otherwise, the government may usually recover any payments the state has made to a recipient who receives any type of income, including compensation for injuries. New York, West Virginia, and the District of Columbia exempt all or at least a portion of any award from eligibility determinations concerning public benefits.

♦ Cumulative Versus Noncumulative Remedies – In Florida, Illinois, Kentucky, Louisiana, Maine, Missouri, West Virginia, and the District of Columbia, remedies provided under a private right of action are cumulative. In Connecticut, remedies are noncumulative.

Part III. Other Potential Legal Approaches to Protecting Assisted Living Residents

A review of potential claims suggests that they are unlikely vehicles for adequate consumer redress for assisted living residents. Often, the remedies provided are too little or too late to address the injury. In addition, the practical difficulties involved with other causes of action such as time, expense, and mental anguish are often prohibitive barriers to very frail older residents. Part III reviews the strengths and weaknesses of the following alternative causes of action from a consumer’s perspective:

!"More Effective Enforcement of Regulations, !"Contract Law, !"Tort Law, !"Landlord-Tenant Law, !"Civil Rights Law, and !"Consumer Protection Law. Part IV. Arguments Against a Private Right of Action Though little has been written in opposition to a private right of action, industry concerns about the costs of litigation and the potential for “frivolous” lawsuits are discussed in Part IV. In general, such concerns seem unwarranted in light of the small monetary awards that typify cases involving a private right of action.

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Part V. Conclusions and Recommendations

The report concludes that the consumer’s private right of action is:

!"most consistent with an enhanced role for consumers; !"most efficient because it cuts through the thicket of uncertainty surrounding potential legal

claims; and !"most likely to enable consumers to attain the higher level of civil and social rights promised

by the concept of assisted living facilities.

Part V includes specific recommendations to state legislatures and officials considering a private right of action for consumers of assisted living services.

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Ensuring Assisted Living Quality Through the Courts: State Policy Issues Regarding a

Consumer Private Right of Action

PART I. THE PRIVATE RIGHT OF ACTION

A. Introduction Assisted living is a growth industry. In 1998, more than 28,000 assisted living facilities

in the United States housed more than one million residents (National Center for Assisted Living 1998). In many states, legislators and regulators are responding to this rapid growth by considering or reconsidering regulatory schemes (Mollica 1998, 6-8).1 Among the consumer protections being considered is the provision of a private right of action for enforcement of the rights of assisted living consumers and the responsibilities of assisted living providers as defined by state statutes and regulations.

A private right of action exists when a statute authorizes a person aggrieved by particular

actions or inactions named in the statute to bring a lawsuit. With a private right of action, assisted living residents can sue a provider or the government for breach of statutory or regulatory rights, duties, or responsibilities. The primary purposes of the private right of action are to obtain compensation for injuries and to ensure performance of duties. A secondary purpose is to supplement traditional governmental regulatory enforcement with private oversight and enforcement. A private right of action is particularly suitable for injuries such as violations of residents' rights to autonomy, dignity, or privacy, which are not likely to produce large damage awards.

Some legislatures are establishing specific rights for both nursing home and assisted

living residents and empowering residents to enforce these rights, rather than relying solely on state regulators (Bertrand 1989, 64).2 When private persons are given a role in the oversight and enforcement of a statute, they are said to function as private attorneys general. The role of the private attorney general is explained in an Illinois case involving that state’s Nursing Home Care Reform Act, Harris v. Manor Healthcare Corp. (1986):

1 As of June 1998, thirty-one states had either existing regulations (22) or provisions allowing Medicaid reimbursement (9) using the term assisted living; six states have issued draft rules; twenty-eight states provide Medicaid reimbursement for services in assisted living or board and care; nine states plan to add Medicaid coverage of services in assisted living facilities; six of the twenty-eight states reimburse for services in board and care facilities; and eleven states are studying assisted living. 2 Most states have enumerated statutory rights for nursing facility residents, such as civil rights, rights to participate in care and care planning, rights to health care information, and privacy rights. States are also beginning to enact laws that set out rights for assisted living residents or authorize regulations that list rights. D.C. Code Ann. § 32-1453 (1988) (residents’ rights listed in regulations enforceable through a private right of action); Fla. Stat. Ann. § 400.428 (West 1998)(rights enumerated in the statute); Me. Rev. Stat. Ann. § 7901-A (West 1998)(rights listed in agency rules enforceable through a private right of action).

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In creating a private right of action against licensees of nursing homes, the General Assembly implicitly embraced the concept of the private attorney general. That is, it recognized that the Depart- ment of Public Health could not police every violation of the [Nursing Home Reform] Act, and that nursing home residents them- selves were in the best position to know of abuses and to seek redress for violations . . . . The provision authorizing an action for damages for breach of the rights of nursing home residents to be free from mental or physical abuse is one reasonably directed towards bringing about compliance with the Act. The legislature well could have included it upon the rationale that government cannot do everything and that some requirements of the Act can best be enforced by those most directly involved.

Absent state laws creating a private right of action, assisted living residents must rely on

state regulators to enforce any rights or obligations provided in state minimum standards. The only ways individual consumers can enjoy the legal protections of court action are through legal means that are, at best, tangential to state minimum standards, such as rights and duties defined by admissions contracts, rights and duties recognized by courts as compensable torts, and rights and duties established under civil rights laws. The strengths and limitations of each of these protections are discussed in Part III.

B. Organization of the Report

This report is organized into five parts. This general introduction (Part 1) provides an overview of what a private right of action is and what it could mean to assisted living residents. Part II presents the findings of a state-by-state analysis of statutes that create private rights of action for assisted living residents (and other long-term care residents). Part III discusses potential legal tools other than a private right of action for assisted living consumers, looking at both theoretical and practical issues related to their application. Part IV briefly examines arguments that have been put forth in opposition to a consumer private right of action. Part V, the conclusion, offers recommendations for states choosing to enact a private right of action for recipients of assisted living services.

C. Methods The authors examined the statutes of all 50 states and the District of Columbia to

determine which have enacted a private right of action for long-term care residents as of July, 2000. The report has a particular focus on assisted living residents and aims to discover elements in common with other types of long-term care recipients as well as elements unique to assisted living. In addition, the authors reviewed existing case law and commentaries to learn what other legal recourse might be available to residents harmed in assisted living facilities. The researchers also examined reported cases and legal commentaries concerning the private right of action to try

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to understand how and under what circumstances the laws applied. A limitation to this research is that cases that are settled, withdrawn prior to judgment, dismissed, or otherwise disposed of without an appeal are unreported.

PART II. EXISTING LAWS AND KEY PROVISIONS

The authors identified 20 states (Arkansas, California, Connecticut, Florida, Georgia,

Illinois, Kentucky, Louisiana, Maine, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Washington, West Virginia, and Wisconsin) and the District of Columbia as having enacted a private right of action enabling recipients of long-term care services to enforce rights conferred upon them by statutes or regulations.3 These 20 states and the District of Columbia differ considerably on key provisions of their private rights of action laws, as described below.

A. Scope of the Right of Action The first dimension on which states differ is the scope of the right of action. Specifically,

states differ in the types of facilities to which a private right of action is applicable as well as the types of plaintiffs who may initiate a lawsuit.

1. Types of Facilities

The private right of action for long-term care residents was initially enacted for nursing facility residents but is being extended to residents of other forms of residential care including facilities defined by the state as assisted living facilities (Mollica 1998).4 Sixteen states–Arkansas, Florida, Georgia, Illinois, Kentucky, Louisiana, Maine, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Washington–and the

3 Because assisted living has no uniform definition, the authors have made their own judgments about the scope of state statutes conferring a private right of action. The authors regard the following statutes as conferring a private right of action: Ark. Code Ann. § 20-10-1209 (1999); Cal. Health & Safety § 1430 (West Supp. 1989); Conn. Gen. Stat. § 19a-550(b) (1989); D.C. Code Ann. § 32-1453 (1988); Fla. Stat. § 400.023 (1986); Ga Code Ann. § 31-8-136 (1999); Ill. Ann. Stat. Ch. 1111/2 P § 4153-601-610 (Smith-Hurd 1988); Ky. Rev. Stat. Ann. § 216.515(26) (Banks-Baldwin 1982); La. Rev. Stat. Ann. § 40:2010.9 (West 1989); Me. Rev. Stat. Ann. tit. 22, § 7948(1) (West 1998); Mo. Ann. Stat. § 198.093(3) (West 1988); N.H. Rev. Stat. Ann. § 151:30 (1987); N.J. Stat. Ann. § 30:13-8 (West 1981); N.Y. Pub. Health Law § 2801-d (McKinney 1985); N.C. Gen. Stat. § 131E-123 (1988); N.D. Cent. Code §50-10.2-02 (1999); Ohio Rev. Code Ann. § 3721.17(I) (West 1987); Okla. Stat. Ann. Tit. 63, § 1-1918(G) (1984); Wash. Rev. Code Ann. § 74.34.200 (West 1999); W. Va. Code § 16-5C-15(c) (1985); and Wis. Stat. Ann. § 50.10 (West 1987). Some of the statutes allow enforcement of federally conferred rights through the state private right of action. 4 Defining assisted living and differentiating it from board and care has proved a challenge in recent years. A common definition or understanding of assisted living remains unlikely as policymakers, regulators, legislators, consumers, and providers develop models that address local circumstances. In many states, board and care and assisted living rules overlap. Assisted living is both a generic concept and a specific model. Facilities and state regulators in states with board and care rules often use the terms assisted living and board and care synonymously; they include two features commonly associated with assisted living: the ability to age in place and the offering of higher levels of care under their board and care rules.

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District of Columbia now provide some form of private right of action for assisted living residents.

In a new development, Maine has created a private right of action for all recipients of

long-term care services generally, irrespective of where the services are provided.5 Maine previously granted such a right to licensed nursing and assisted living facility residents but extended the private right of action to ensure that violations of residents’ rights may be reported and enforced, regardless of the setting in which long-term care services are delivered. The law expressly guarantees residents’ rights in all assisted living settings, whether licensed or unlicensed.

2. Standing: Types of Plaintiffs

All of the states with a private right of action specify that residents have the legal right to sue. Arkansas, Florida, Kentucky, New Jersey, and North Carolina extend the right to sue to a judicially appointed representative (i.e., guardian or guardian ad litem). As a practical matter, a failure to authorize expressly the right of a guardian to sue does not mean that the guardian cannot sue. Guardians generally have the authority to initiate and defend legal actions for incapacitated persons. California and the District of Columbia give the right to sue to residents' representatives and/or advocates. Georgia and New Hampshire have the broadest provisions, allowing any aggrieved person to bring an action. Table 1 shows what facilities are covered under law and who has the legal right to sue in the courts.

5 Me. Rev. Stat. Ann. tit. 22, § 7948(1) (West 1998).

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TABLE 1

PERSONS AUTHORIZED TO SUE, BY STATE

STATE

TYPE OF FACILITY

RIGHT TO SUE

Nursing Home

Assisted Living

AK ✔ ✔ Resident, guardian, personal representative of estate CA ✔ (a) Attorney general or any person acting for itself, its

members or the general public for non-rights violations

(b) Residents for residents’ rights violations CN ✔ Patients DC ✔ ✔ Resident or resident’s representative FL ✔ ✔ Resident, guardian, a person or organization acting on

behalf of resident, or a personal representative of estate GA ✔ ✔1 Any person or persons aggrieved, resident, or resident’s

representative or surrogate IL ✔ ✔1 Resident KY ✔ ✔1 Resident or guardian LA ✔ ✔2 Resident or guardian (curator) ME ✔ ✔ Resident MO ✔ ✔3 Resident or former resident NH ✔ ✔3 Any person aggrieved NJ ✔ ✔4 Resident or guardian5 NY ✔ ✔3 Patients NC ✔ ✔ Resident, guardian, or guardian ad litem ND ✔ ✔6 Resident OH ✔ ✔7 Resident or sponsor OK ✔ ✔8 Resident WA ✔ ✔9 Resident WV ✔ Resident WI ✔ Resident 1. Personal care homes; 2. Residential care homes; 3. Residential care facilities; 4. Residential health care facilities; 5. Profeta v. Dover Christian Nursing Home 1983; 6. Basic care facilities; 7. Homes (defined as providing accommodations to three or more persons who are dependent upon the services of others); 8. Not expressed; 9. Personal care services.

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B. Remedies Available under the Right of Action The 20 states and the District of Columbia also differ considerably with respect to the

remedies available under their private rights of action. The following section discusses four types of remedies: 1) money damages; 2) equitable remedies; 3) writs of mandamus; and 4) attorneys’ fees.

1. Money Damages Money damages are compensation for injuries and/or punishment. All but two states

(Wisconsin and North Carolina) allow money damages as a remedy. Arkansas, Connecticut, Florida, Georgia, Illinois, Kentucky, Maine, Missouri, New

Jersey, New York, Ohio, Oklahoma, West Virginia, and the District of Columbia allow for both compensatory and punitive damages. Compensatory damages constitute payments for actual damages such as out-of-pocket medical and other expenses, the value of lost rights, support, companionship, and future enjoyment of vocational activities. California, Georgia, Illinois, New Hampshire, New York, and the District of Columbia recognize the difficulty of assigning a dollar value to some residents’ rights. Rather than rely entirely on jury decisions, they provide for statutory damages — that is, a minimum amount of damages by law. Punitive damages are less commonly awarded than compensatory damages. These punitive damages are awarded to punish extreme conduct, meaning conduct that is willful, wanton, gross, flagrant, reckless, or consciously indifferent to the rights of the resident.

2. Injunctions and Other Equitable (Non-Money) Remedies

All 20 states and the District of Columbia allow equitable (non-money) relief. Equitable remedies, such as injunctions or restraining orders, are used when money will not compensate the injury or when future injurious behavior is possible without court action. Through an injunction or restraining order, a judge directs an individual or agency to do, or undo, specific acts. Equitable remedies are often used when timeliness is critical or when an impending action has the potential for causing harm. For example, an unprepared discharge from a residence may be particularly traumatic for someone with dementia; the risk of serious injury or even death may exist. If sufficient legal grounds exist, a court might enjoin such a discharge–i.e., order that the resident not be discharged. Other examples of circumstances where equitable remedies are especially useful include internal transfers, access to records, denial of visitation privileges, and potentially harmful roommate problems.

The injunction or restraining order may be temporary or permanent. A temporary

restraining order is often issued to stop an action until a hearing can be held to determine whether the action is lawful. A permanent injunction is issued to require changes in the provider’s behavior until otherwise ordered.

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3. Writ of Mandamus

A writ of mandamus is a court order directing a government official to perform a non-discretionary duty. Judges are generally reluctant to issue writs of mandamus because the law recognizes that government officials must have some latitude in performing duties. Before issuing the writ, the judge must find that the official failed without good reason to perform an act, despite a clear duty to do so. Wisconsin is the only state that relies primarily on writs of mandamus as a remedy for private rights of action, and the authors could find no recorded cases of successful uses of writs of mandamus in Wisconsin.

4. Attorneys’ Fees Each party usually pays for its own attorneys' fees, but a statute may allow

a party to recover fees from the other party. Provisions concerning attorneys’ fees vary. Five states and the District of Columbia allow only prevailing plaintiffs to recovery attorneys’ fees, and eight states do not allow recovery of attorneys’ fees at all. Other states allow the prevailing party to recover fees. Table 2 provides an overview of state statutes on money damages, injunctions, and attorney's fee.

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TABLE 2 REMEDIES AVAILABLE

UNDER STATE PRIVATE RIGHT OF ACTION STATUTES* STATE

REMEDIES ATTORNEY

FEES MONETARY DAMAGES Compensatory

Damages Punitive Damages

Statutory Damages Injunction

AR ✔ ✔ ✔ No CA ✔ Yes, violation (a) cannot

exceed civil penalty amount (b) no more than $500

✔

CN ✔ ✔ ✔ Not specified DC ✔ ✔ 3 times actual damages or

$100 per violation, whichever is greater

✔ Prevailing plaintiff

FL ✔ ✔ ✔ Prevailing plaintiff, prevailing defendant if no justiciable issues

GA ✔ ✔ $1,000 for rights violation or actual damages

✔ Not specified

IL ✔ ✔ $500 for violation or actual damages, whichever is greater

✔ Plaintiff

KY ✔ ✔ ✔ Prevailing party LA ✔ ✔ Prevailing party ME ✔ ✔ ✔ Not specified MO ✔ ✔ ✔ Prevailing party NH ✔ $50 per day or amount of

damage, whichever is greater

✔ Plaintiff

NJ ✔ ✔ ✔ Prevailing party NY ✔ ✔ No less than 25% of daily

rate ✔ Prevailing

plaintiff NC ✔ Not specified ND ✔ ✔ ✔ Not specified OH ✔ ✔ ✔ Prevailing party OK ✔ ✔ ✔ Prevailing

plaintiff WA ✔ ✔ Prevailing

plaintiff WV ✔ ✔ ✔ Not specified WI ✔ Not specified * Shading indicates states with a private right of action for only nursing homes (see Table 1).

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C. Other Statutory Features Among the 20 states and the District of Columbia, other statutes also address the rights of

long-term care residents to seek legal recourse. Table 3 sets out these other statutes.

1. Court Dismissal of De Minimis Claims To counter the possibility of abuse of the right of action, Maine has a statutory provision that allows the court to dismiss claims based on residents’ rights violations (both state and federal) that the court deems minor. The statute does not, however, spell out what is a minor violation.

2. Prohibitions Against Waiver of Liability or Waiver of the Rights to Pursue Legal Claim Contract Clauses

A waiver requires a party to give up a right he or she would otherwise have. For example, a clause in the admissions contract might require the resident to forgo legal claims as a condition of admission. California, Illinois, New York, North Dakota, West Virginia, and the District of Columbia prohibit a waiver of the private right of action in a contract.

In addition to statutory protections, courts may rely on common law in refusing to enforce contracts or provisions of contracts that contain the elements of adhesion contracts–that is, contracts that adhere to the benefit of the stronger party by requiring the waiver of basic rights by the weaker party. Characteristics of adhesion contracts that courts often look for include (1) the use of standardized form, (2) an offer made on a take-it-or-leave-it basis, and (3) no realistic opportunity for consumers to bargain because of the superior bargaining position of the party offering the contract (Broemmer v. Abortion Services of Phoenix, Ltd. 1992, Madden v. Kaiser Found. Hospitals 1976, Guthmann v. La Vida Llena 1985).

Courts will not enforce contract provisions that limit the duties or liability of the stronger

party, that defeat the reasonable expectation of the weaker party, and that are unconscionable (Broemmer v. Abortion Services of Phoenix, Ltd. 1992, Madden v. Kaiser Found. Hospitals 1976, Guthmann v. La Vida Llena 1985, Williams v. Walker Thomas Furniture Co. 1965).6 Courts may also refuse to enforce a contract on grounds of public policy to discourage undesirable conduct or to avoid the use of the judicial process to uphold an unsavory agreement. An agreement, or some part of it, may be unenforceable as against public policy for myriad reasons — e.g., it involves commission of a tort or wrongful act or breach of fiduciary duty. Courts have also found that exculpatory clauses in residential leases violate public policy (Henrioulle v. Marin Ventures, Inc. 1978) as well as standardized releases from liability for negligence imposed as a condition for admission to a charitable hospital (Tunkl v. Regents of the

6 Williams v. Walker Thomas Furniture Co. (1965) defined unconscionable as an absence of meaningful choice on the part of one of the parties together with contract terms that are unreasonably favorable to the other party. Absence of meaningful choice encompasses employment of sharp practices, use of fine print and convoluted language, lack of understanding, and inequality of bargaining power.

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Univ. of Cal 1963, Emory Univ. v. Porubiansky 1981). An agreement may also be unenforceable as against public policy if it conflicts with or frustrates the intent of legislation.

3. Prohibition Against Exhaustion of Other Remedies Requirements

Under some circumstances, a party cannot file a lawsuit without having first attempted to resolve the issue through some other formal process, such as a public grievance or complaint resolution process (as opposed to a private complaint resolution process such as mediation or arbitration). Connecticut, Illinois, Maine, New York, West Virginia, and the District of Columbia expressly provide that a plaintiff is not required to exhaust administrative remedies prior to bringing a lawsuit.

4. Limited Notice Requirements Occasionally, a law requires the alleged injured party to provide notice to public

authorities prior to filing a lawsuit. Maine and Missouri require some notice to state officials prior to filing a suit on the theory that the state might want to take corrective action on its own or join the case.

5. Exemption of Damages Awards as Setoffs for Governmental Aid Provided

Unless a law states otherwise, the government may usually recover any payments the state has made to a recipient who receives any type of income, including compensation for injuries. New York, West Virginia, and the District of Columbia exempt all or a portion of any award from eligibility determinations concerning public benefits. Without a statutory provision exempting some or all of such awards, the money damages could affect eligibility for public funds. Denying future public benefits because of awards received would both discourage legitimate lawsuits and require recipients to spend all the money awarded paying privately for their care, perhaps even to the facility that caused the injury.

6. Cumulative Versus Noncumulative Remedies Some states, such as Florida, Illinois, Kentucky, Louisiana, Maine, Missouri, West

Virginia, and the District of Columbia provide cumulative remedies under a private right of action. An injured party may pursue several causes of action and seek whatever remedies are available under each of these causes of action. Having access to multiple remedies is important because a statutory claim may confer rights that do not exist in common law or additional remedies, such as attorneys’ fees. For example, a state could specifically set out a resident's right to visitors. If the resident is consistently denied that right, the statute could allow the resident to sue the nursing home and grant fees to the attorney representing the resident. A statutory provision for attorney's fees allows an attorney to take a claim that might be important to the client but is not likely to produce large damage awards. Tort attorneys work on contingency fee agreements, where their fee is a percentage of the award, and they receive no payment if their client does not prevail. Thus, tort attorneys favor cases in which a substantial recovery is likely.

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In Connecticut, remedies are noncumulative. In other words, if damages are awarded

under the private right of action, the injured party may not also receive any remedies that may be available under a parallel tort claim.

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TABLE 3

STATE PROVISIONS REGARDING THE PRIVATE RIGHT TO SUE AND OTHER AVAILABLE REMEDIES*

STATE

OTHER

California Waiver of right to sue is void Connecticut Remedies are not cumulative;1 no requirement to exhaust

administrative remedies District of Columbia First $3,000 of damages exempt for calculating Medicaid

eligibility; no requirement to exhaust administrative remedies; waiver of right to sue is void; remedies are cumulative

Florida Remedies are cumulative Illinois Waiver of right to sue is void; remedies are cumulative; no

requirement to exhaust administrative remedies Kentucky Remedies are cumulative Louisiana Remedies are cumulative Maine Court may dismiss claims based on minor rights violations;

remedies are cumulative; must provide 15 days notice to attorney general before filing suit (waivable if emergency); no requirement to exhaust administrative remedies

Missouri Written complaint must be filed with attorney general prior to filing civil action, remedies are cumulative

New York Waiver of right to sue is void; no requirement to exhaust administrative remedies; remedies are cumulative;2 damages awards are not used to calculate eligibility for medical assistance

North Dakota Resident cannot waive rights Washington Residents should use least formal method to resolve

disputes West Virginia Waiver of right to sue is void; remedies are cumulative; no

requirement to exhaust administrative remedies; damages are not included in calculation of medical assistance eligibility

* Shading indicates states with a private right of action for only nursing homes (see Table 1). 1. Morgan v. Tolland County Health Care, Inc. 1996. 2. Begandy v. Richardson 1987 (no

statutory cause of action for injury that can be brought as negligence claim).

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PART III. POTENTIAL LEGAL APPRAOCHES OTHER THAN A PRIVATE RIGHT OF ACTION FOR PROTECTING ASSISTED LIVING RESIDENTS

Assisted living residents do have legal protections, even without a private right of action. These protections are essential and may be adequate for certain types of problems. The sections below review the strengths and weaknesses of alternative causes of action from a consumer’s perspective.

A. More Effective Enforcement of Regulations

Since one purpose of a private right of action is to augment state enforcement of

minimum standards, some policymakers have suggested that more effective state enforcement would be an alternative to a private right of action. More effective enforcement of resident rights and protections — whether provided by statute, regulation, or common law – is undoubtedly needed in all forms of long-term care settings. Substantial evidence has documented the inadequacies of state enforcement efforts in a variety of settings (H.R. Report No. 100-391 1987, 451-52, reprinted in U.S.C.C.A.N. 2313-271-272; Hawes 1995, U.S. General Accounting Office March 18,1999;. U.S. House of Representative, Select Committee on Aging (1989); U.S. General Accounting Office 1989; U.S. General Accounting Office April 26, 1999).

1. Practical and Political Obstacles to Enhanced Enforcement

As the history of regulating the nursing home industry shows, enhanced regulatory efforts are both costly and politically contentious. Few states are currently looking for ways to extend that kind of enhanced regulatory oversight to assisted living or other residential care settings.

2. Facility Focus Does Not Address Individual Problems

Regulatory enforcement is designed to address pattern and practice problems rather than individual harms or injury. In normally scheduled inspections, nursing home surveyors only examine a relatively small sampling of resident files to determine whether individual residents are experiencing actual or potential harm. Most residents' files or individual situations are not analyzed in a survey. As a result, unless a problem or injury shows up in the sample pool of residents, regulators will not even know about it unless a resident makes a specific complaint. This inherent deficiency in the regulatory approach renders regulations inadequate from the perspective of individual consumers.

3. Remedies Provided Do Not Compensate Individuals Harmed Even if each individual’s problem or injury were brought to the attention of inspectors,

the regulatory system offers no remedies to the individuals harmed. Instead, regulatory enforcement is only designed to punish the long-term care provider and/or to ensure that the problem is corrected prospectively. No mechanism exists for compensating individual residents for harms they have already suffered.

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B. Contract Law Aspects of the legal relationship between assisted living consumers and providers'

specific services and their costs are necessarily defined by contracts negotiated between providers and consumers. Contracts have the virtues of being flexible, more responsive to individual consumer demands, and adaptive to the local service availability. They do not and cannot, however, assure the enforcement of resident rights or other state minimum standards–that is, contracts do not guarantee what is in state statutes nor can they adapt as statutes change. More important, contracts presuppose equality of bargaining power between the contracting parties, but assisted living residents may be extremely vulnerable due to mental incapacity, physical frailty, or anxiety about their financial ability to provide for their needs. According to a survey by Price Waterhouse Coopers (1998) for the industry, the typical assisted living resident is an 83-year-old female needing assistance.7 In addition, nearly half (47 percent) have cognitive impairments (Price Waterhouse Coopers 1998).

As the survey demonstrates, many assisted living residents have a significant level of

cognitive disability and may not have the capacity to make legally binding decisions such as entering into a contract. A surrogate decision-maker is, therefore, needed. Unfortunately, the process for picking surrogate decision-makers and for determining when a surrogate is necessary can be unreliable. State law controls the process, which, thus, varies from state to state.8

Studies have shown that assisted living contract terms are frequently vague and

confusing, leaving consumers unaware of their rights and the responsibilities of the assisted living facilities. An ABA Legal Commission on Legal Problems of the Elderly study of assisted living contracts noted that good assisted living is supposed to foster independence, dignity, privacy, a maximum level of functioning, and connections with the community. For the most part, however, the contracts were silent on those issues or appeared to promote the opposite by, in effect, limiting residents’ autonomy and fostering dependence.9

7 The report summarizes findings from a survey mailed to Assisted Living Federation of America (ALFA) members and is based on responses from 402 member facilities with over 23,000 units. The survey results presented in the fact sheet from the overview are applicable only to ALFA facilities that responded to the survey. The following are resident care needs and the percentage of residents with these needs: Assistance with bathing (60 percent), medication dispensing (59 percent), medication reminders (50 percent), assistance with dressing (44 percent), assistance with toileting (32 percent), assistance with transferring (15 percent), assistance with eating (10 percent). The survey also showed that residents have cognitive impairments (47 percent), use wheelchairs (38 percent), and receive home health care (27 percent). 8 Surrogates can be designated in different ways: (1) informally, by merely looking to whoever seems most involved with a resident; (2) through a written designation such as a durable power of attorney; (3) through a devolution of rights procedure, in which a surrogate is selected from a prioritized list of classes of persons; and (4) by court appointment of a guardian. (For example, health care consent laws normally list decision-makers by priority. After a triggering process, such as certification of incapacity by a health care professional, the person in the first priority class is granted legal authority to make decisions for the incapacitated individual.) 9 Consumer Reports, “Can Your Loved Ones Avoid the Nursing Home? The Promise and Pitfalls of Assisted Living,” October 1995, 60:656-57.

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The contracts also did not specify how often services would be provided, stating, for example, that services would be provided as needed or as required or as deemed necessary by the facility. Consumer Reports concluded that the vagueness of those provisions is tailor-made for abuse and neglect and that a facility may manipulate services to meet its financial objectives rather than the needs of the residents.10 A recent U.S. Government Accounting Office (April 1999, 3-4) report on assisted living reached similar conclusions: (1) marketing materials, contracts, and other written materials provided by facilities are often incomplete and are sometimes vague or misleading; (2) only half the facilities provide key information such as the amount of assistance with medication provided, costs, or the circumstances under which residents may be discharged if their care needs changed; (3) only a third of facilities provide information about staff qualifications and identify services that are not available; and (4) only a quarter of facilities routinely provide a contract for review to prospective residents.

Another concern with contracts is that terms may attempt to limit residents’ legal redress

for injuries. As noted above, some states and the District of Columbia disallow contract clauses that require residents to waive their rights to file lawsuits and/or liability. Without statutory protection, residents would have to establish their right to sue as well as their right to recover on the alleged contract violation. This protracted litigation is problematic for older persons. A private right of action, on the other hand, specifically confers the right to sue, thereby allowing for more expeditious litigation.

A related potential source for procedural conflict is that contracts requiring alternative dispute resolution (ADR) mechanisms11 are becoming more common in other industries. Mandatory arbitration clauses are being seen increasingly in contracts and agreements involving, among other areas, the purchase or lease of goods and services; employment and employment-related benefits; and health care (including insurance coverage, levels of care, and even medical malpractice).12 Assisted living contracts have not been examined to determine whether arbitration provisions are included, but such contracts are noted here as a potential problem because of their

10 Ibid. 11 Alternative dispute resolution (ADR) mechanisms are alternatives to the court system for resolving conflicts. The two major forms of ADR are mediation and arbitration, which differ widely in process and content. Whether litigation or ADR is appropriate in a particular situation depends on many factors, including the issues involved, the relief sought, the need for the parties to maintain an ongoing relationship, and the need to establish legal precedent, among others. These considerations also are relevant in deciding what form of ADR is appropriate. Mediation involves a trained neutral third party who helps the disputing parties reach their own decisions. Mediation is less formal and less costly than litigation and typically is chosen by the parties after a dispute has arisen. It allows the parties more active participation and control over the outcome and helps preserve the relationship between the parties. In arbitration, a third party or panel makes a decision after hearing arguments and reviewing evidence, a process that is more formal and more expensive than mediation. 12 A statute or regulation could also require ADR mechanisms, but none of the state laws have done so to date.

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increasing utilization by nursing homes.13 Mandatory arbitration, a requirement that the consumer agree to submit any future dispute to arbitration as a condition of doing business, may be particularly harmful. Language requiring arbitration is often found buried in small print within contracts or agreements. Consumers may be unaware that they are agreeing to forfeit their right to go to court until after engaging in an arbitration process. The other form of arbitration that may not be in the interest of the consumer is binding arbitration. Under binding arbitration, the parties agree to comply with the determination of the arbitrator, thereby waiving the right to have a judge or jury ever hear the consumer’s complaint. Binding arbitration is particularly troublesome when the consumer must agree to it as a condition of doing business, before the consumer can possibly evaluate the potential advantages and disadvantages of pursuing litigation, arbitration, or any other form of dispute resolution. As with mandatory arbitration clauses, binding arbitration clauses in contracts or agreements are often in small print and technical language, and consumers are frequently unaware of their existence or meaning. The arbitration process itself has many disadvantages for consumers. These may include very limited access to documents and other information, limited knowledge on which to base the choice of an arbitrator, the absence of a requirement that arbitrators follow the law or issue written decisions, and the extremely limited grounds for appealing an arbitrator’s decision. In addition, consumers must pay half the costs, which may be substantial, especially as percentage of the amount involved in a relatively small dispute. A final problem is a concern about possible “repeater bias,” a systemic bias in favor of the party more likely to involved in many cases—the business interest and not the consumer.14

C. Tort Law

Long-term care residents, including assisted living residents, can bring claims under tort law. A tort is a civil wrong, other than a breach of contract, for which the law provides a remedy (i.e., an action for damages). Simply put, the law imposes duties on persons to behave in ways that will not injure other persons. A person who breaches a duty of care to another person has committed a civil wrong and may be liable in a lawsuit brought by the injured person.

13 See, e.g. Smithson v. Integrated Health Services of Lester, Inc., Civ. A. No. 99-199 (E.D. Ky. Aug. 13, 1999) (order granting motion to dismiss claim alleging nursing home admission contract contained an illegal mandatory arbitration clause); Cary Davis, Lawsuit Challenges Nursing Home Deal, St. Petersburg Times, Nov. 7, 2000, available at http://www.sptims.com/News/ 110700/Pasco/Lawsuit (class action lawsuit filed against nursing home chain alleging that residents were required to sign new “admission” agreements to submit disputes about substandard care to mediation or mandatory arbitrary). 14 Several studies have found such a bias. See Barry R. Furrow, Managed Care Organizations and Patient Injury: Rethinking Liability, 31 Ga. L. Rev. 419, 493 (1997); David Schwartz, Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration, 1997 Wis. L. Rev. 33, 60-61 (1997); Jean R. Sternlight, Pancea or Corporate Tool?: Debunking the Supreme Court’s Preference for Binding Arbitration, 74 Wash. U. Law Q. 637, 684-85 (1996).

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While a tort claim can, in theory, exist for almost any injury suffered, establishing the breach of legal duty is not an easy matter. First, the injured party must demonstrate that the care provided, or not provided, departs from the care that should be expected. Second, courts traditionally have imposed damages for physical injuries and mental/emotional injuries that are accompanied by a physical injury.15 In practice, tort claims are usually brought for major injuries where potential damages are significant enough to give an attorney the economic incentive to represent the injured client.16

While more serious injuries might be redressed through both tort claims and claims

brought under a private right of action, not all injuries would likely be redressed. Tort lawyers generally work on a contingency fee arrangement. They are not paid an hourly rate but typically receive a third of any damages awarded, and they generally only accept cases that will yield substantial damages. However, violations of dignity, autonomy, and privacy are not likely to produce large awards. As the Illinois Supreme Court pointed out in the Harris v. Manor Healthcare Corporation (1986) case:

The legislature could reasonably assume that residents, either because of their advanced age, mental or physical infirmities, or lack of financial resources are often unlikely to pursue costly and time-consuming litigation in the hope of receiving an uncertain or small recovery. . . . Moreover, many violations of the Act will yield little in the way of actual money damages. Violations of resident’s privacy, religious freedom, speech and other constitutional rights, while vitally important to a resident, are unlikely to produce large damage awards.17

Violations of rights do not make good tort actions. Tort actions may get at gross

violations of quality of care, but the areas not well covered by tort actions have enormous effects on quality of life. Plaintiffs who will have the most difficult time finding representation are those who suffer from mental or emotional abuse or whose privacy is compromised by the nursing home staff. In these cases, common law causes of action and their damages are

15 See Sypert v. U.S. 1983, Avallone v. Wilmington Medical Ctr., Inc. 1982, Keck v. Jackson 1979, Falzone v. Busch 1965, Phillips v. U.S. 1983, Villari v. Terminix Int'l, Inc. 1987, In re Moorenovich 1986. Traditionally, damages for negligent infliction of emotional distress were awarded only when accompanied by a showing of bodily injury. Conversely, some recent cases have abandoned the requirement of a physical manifestation of emotional harm as an absolute perquisite to recovery. Phillips v. U.S. 1983 and other cases maintain the requirement of physical injury but only a minimal showing is required. 16 Several states have enacted laws that allow lawsuits when older persons have been abused by their caretakers. See California Elder Abuse and Dependent Adult Civil Protection Act, Cal. Welf. & Inst. Code § 15600 (West 1998). Although these laws vary, their purposes are to discourage abuse. For example, the State of California allows for posthumous recovery for pain and suffering and the award of attorneys’ fees. See Delaney v. Baker (1999). As with tort cases generally, these laws tend to focus on, and punish, extreme behavior. 17 See also Stiffelman v. Abrams (1983) (rights of action with the inducement of recoverable actual damages, punitive damages and attorneys' fees are key features of reform law); Begandy v. Richardson (1987) (purpose of private right of action was to augment the state’s limited ability to police the care afforded nursing home patients by creating incentives to entice the private bar to prosecute claims.)

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potentially inadequate to provide an incentive for representation (Crotts and Martinez 1996, 613-614). While a resident might want to try to get a court to recognize his or her injury as one that should have a tort remedy, this would be a long and arduous undertaking.

D. Landlord-Tenant Law Landlord-tenant law might provide some limited protections to the assisted living resident

in defenses raised to discharges or evictions. The basis of landlord-tenant law is the lease, which is an agreement by which the landlord gives up the right of possession of the property to a tenant in return for rent. As a general rule, disputes between the landlord and tenant are governed by property law principles rather than contract law principles, though contract issues are sometimes raised based on the terms of the lease agreement. The remedy for breach of a duty (nonpayment of rent) under property law is limited to possession of property and payment of rents. There is no recovery for personal injuries or rights’ violations.

In addition, evictions require some notice and the opportunity to cure (pay rent that is

due). Notice requirements are established by the contract or state property law–e.g., a month-to-month tenancy based on when rent is due and collected. Property law differs from state to state, and the application of the law to assisted living is largely speculative at this point (Edelstein 1998, 373, 379).18

E. Civil Rights Law

Section 504 of the Rehabilitation Act,19 the Americans with Disabilities Act (ADA),20 and the Fair Housing Act (FHA)21 could potentially be useful to assisted living residents. Each statute protects persons with disabilities, persons with a record of disability, or persons perceived to have disabilities as a result of discrimination.22 Assisted living residents are generally covered by the same statutes as those covering persons with disabilities.

18 In Massachusetts, evictions are under the authority of state landlord-tenant law. Landlord-tenant law in Massachusetts allows for three times a wrongfully evicted plaintiff’s actual damages or three months rent and voids any waiver of liability on behalf of the landlord. See Mass. Gen Laws Ann. ch. 186, § 15F West 1999). In California and Hawaii, state landlord-tenant laws require some notice prior to an eviction but provide no process to challenge the eviction. 19 29 U.S.C. § 794. 20 42 U.S.C. §§ 12101-12213. 21 42 U.S.C. §§ 3601-3631. 22 29 U.S.C. 706(8)(B) of the Rehabilitation Act and 42 U.S.C. § 3602 (h) define handicap as, with respect to a person[s]--

(1) a physical or mental impairment that substantially limits one or more of such person’s major life activities, (2) a records of having such an impairment, or (3) being regarded as having such an impairment. The ADA’s definition (42 U.S.C. § 12102(2)) is the same except that it uses the word disability instead of

the word handicap.

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The oldest of the civil rights statutes is Section 504 of the Rehabilitation Act, which protects persons with disabilities or persons perceived to have disabilities from discrimination in programs that receive federal funds. Section 504 has been used in several long-term care contexts to challenge restrictive zoning and land use practices and to challenge a resident’s removal from a nursing facility because of the degree and form of dementia (Innovative Health Sys., Inc. v. City of White Plains 1997, Wagner v. Fair Acres Geriatric Ctr. 1995).

The ADA protects persons with disabilities or persons perceived to have disabilities from discrimination in employment, in access to and participation in governmental programs and services, and in places of public accommodation. The ADA has been used to challenge government programs that have the effect of discriminating against certain groups of persons with disabilities by limiting access to attendant care programs (Helen L. v. Didario 1994), to challenge zoning and land use practices (Innovative Health Sys., Inc. v. City of White Plains 1997), and to challenge unjustified institutionalization where community placement is appropriate (Olmstead v. Zimring 1999).

The Fair Housing Act (FHA) is the narrowest but most obviously relevant statute, protecting persons with disabilities from discrimination in the use and enjoyment of dwellings. In several recent cases, courts have decided that nursing homes and assisted living facilities are dwellings for purposes of the FHA (Hovsons, Inc. v. Township of Brick 1996, Smith & Lee Associates v. City of Taylor 1996, Assisted Living Assocs. of Moorestown v. Moorestown Township 1998). The FHA may be used against both private and public authorities that practice discrimination and covers at least some government regulations such as zoning and land use restrictions (Olmstead v. Zimring 1999, Bangerter v. Orem City Corp. 1995). The FHA has also been used to challenge other forms of regulations based on health and safety concerns (Alliance for Mentally Ill v. City of Naperville 1996, Potomac Group Home Corp. v. Montgomery County, Md. 1993).23 However, reasonable restrictions on the terms and conditions of housing may be justified by public safety concerns (Bangerter v. Orem City Corp 1995, 1503-4; City of Edmonds v. Oxford House 1995).24

Just how useful these three laws are as vehicles for remedies for assisted living residents is an open question. The laws might prohibit discriminatory admissions or retention criteria based on types or degrees of disability or inaccessible structures or common areas (Edelstein 1998, 379). The simplest type of case would pit a resident against the provider–e.g., a resident in a wheelchair is denied access to a common dining room because the dining area is inaccessible or a person with Alzheimer’s disease is denied admission to a nursing facility based on the severity of the disease. The potential problem, however, is that all these laws seek equal rights for persons with disabilities, a concept deceptively difficult to implement, particularly when the program activity or service is one designed only for persons with disabilities–i.e., an assisted living facility. These types of claims can only be decided on a case-by-case basis.

23 Alliance for the Mentally Ill v. City of Napierville (1996) concerned fire safety code; Potomac Group Home Corp. v. Montgomery County, MD (1993), neighborhood notification and limiting residence to persons able to exit independently. 24 City of Edmonds v. Oxford House (1995) concerned maximum occupancy limitation for dwellings applied equally to related and non-related persons justified on health grounds.

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Assisted living residents asserting claims under the civil rights acts encounter many

barriers to complaint resolution. The laws are not yet well defined, inviting litigation about scope, applicability, and other procedural issues.

F. Consumer Protection Laws Assisted living providers generally promote themselves as providing dignity, choice,

comfort, security, independence, and privacy (Assisted Living Assocs. of Moorestown v. Moorestown Township 1998, 415-16).25 Arguably, a failure to deliver on these promises may constitute a deceptive trade practice and violate a Unfair and Deceptive Acts and Practices (UDAP) statute. Every state has some form of UDAP statute. Examples of challenged practices in nursing homes are excessive charges, misrepresentation of pricing of medications, and failure to provide competently trained staff. Consumer protection laws may be useful because of enhanced damages provisions (e.g., treble damages and attorneys' fees).

A threshold issue is whether a residential care provider is subject to the law. Not all

businesses are subject to consumer protection laws, and some regulated industries are exempt. Some UDAP statutes also exempt learned professions, so the challenged practice must relate to business as opposed to professional competence in the delivery of care. A court in Ohio recently determined that the Ohio Consumer Sales Practice Act applies to the billing practices of a residential care facility (McCall and Anderson v. Fischer 1998). One of the defendants in the case asked plaintiffs for payments for goods and services that the state paid the defendant to provide to residents, in effect double-billing for the goods and services. The court rejected attempts to exempt the residential facility’s billing practices from the reach of the Ohio Consumer Sales Practice Act. As with other of the remedies, the use of the consumer protection laws in the context of assisted living is undefined.

None of these alternative legal approaches adequately address the types of issues raised by private rights of action. A review of potential claims suggests that they are unlikely vehicles for adequate consumer redress for assisted living residents. Often, the remedies provided are too little or too late to address the injury. In addition, the practical difficulties such as time, expense, and mental anguish are often prohibitive barriers to very frail older residents. PART IV. ARGUMENTS AGAINST A PRIVATE RIGHT OF ACTION

Opponents of a private right of action have argued that additional legal procedures place unnecessary additional financial burdens upon care providers. Such critics point to research indicating that, in the short term at least, nursing home providers may face including increased general and professional liability insurance costs, an issue of particular recent concern in Florida

25 Since an assisted living resident may not need as much care as, for example, a patient in a nursing home, an assisted living facility is designed to ensure that a resident maintain as much independence, autonomy, individuality, privacy, and dignity as possible.

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and Texas.26 Documenting whether or not there are additional costs associated with a private right of action was outside of the scope of this paper. However, several points can be noted regarding the potential costs of litigation in this area.

In the first place, most of the concern with the costs of litigation has related to tort actions

based on alleged substandard nursing facility care in states where liability insurance rates have escalated and/or insurers have refused to insure providers. It is, however, not reasonable to extrapolate from the experience with tort actions when evaluating the potential costs of a private right of action for a number of reasons.

As noted above, remedies in cases brought under a private right of action do not generally

involve large sums of money. Indeed, in many cases the remedies sought are equitable remedies, an injunction to prevent an action or force an action to take place, rather than monetary. Even where monetary remedies are involved the amounts awarded are often limited by state law to a few hundred or a few thousand dollars. In recognition that damages awards may be relatively small some states have established minimum statutory damages of a violation is proved.

Second, because the remedies sought are often changes in behavior by the provider, many

cases brought under a private right of action are resolved relatively quickly without expensive discovery or other litigation costs. Indeed, the researchers for this report were able to find only a few reported cases on appeal that had been brought under a private right of action, an indication that few cases reach trial and far fewer still go on through expensive appeals processes.

Related to cost, providers have also expressed concern about the potential for “frivolous

lawsuits.” No data exist on the numbers of cases brought under a private right of action. Even if such data existed, determining which cases where “frivolous” would largely be a subjective judgment. But several inhibitions to “frivolous lawsuits” are inherent in the private right of action.

The primary inhibition to “frivolous lawsuits” is the small amounts of the remedies. Very

frail older persons are highly unlikely to endure the difficulties of litigation in the hopes of very small awards. Moreover, because the awards are typically so small, attorneys do not bring such actions on a contingency basis. With relatively small fees-for-service involved, attorneys are highly unlikely to take on cases that have little merit.

Some states with private rights of action have also taken steps to further limit the

likelihood of “frivolous lawsuits.” Six states in this study award attorneys fees to the prevailing party, meaning that plaintiffs who fail in their cases must pay the attorneys’ fees of the provider.

26 See Leslie Werstein Warren, Driven Out, Best’s Review 85 (Mar. 2000)(discussing results of survey by AON Worldwide Actuarial which links increased liability insurance costs to strong residents’ rights laws in Florida and Texas). The AON Study finds increased general and professional liability costs followed legislative changes in both federal law, the Nursing Home Reform Act of 1987 and in state law. AON, Florida Long Term Care General Liability and Professional Liability Actuarial Analysis 11 (Jan. 2000). Florida and Texas in particular have strong residents’ right laws and increased liability costs. Id. However, not all states with residents’ right statutes have experienced the same trends. Id.

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In addition, Maine has a “de minimus” provision that allows judges to dismiss cases in which they determine the claim is too trivial to merit court attention.

Policy makers must, of course, balance the competing interests of consumer protection

and potential costs to providers as they weigh the advisability of enacting private rights of action. But there is no evidence from states with a private right of action that it is being abused by consumers or that the costs are more than minimal. Indeed, a representative of the Maine Health Care Association, which represents nursing home and assisted living providers, commented “This [private right of action] is not part of the law that’s been abused or used to threaten facilities... I see this as important resident protection legislation and not something that the industry feels threatens their ability to do business.”27

PART V. CONCLUSIONS AND RECOMMENDATIONS

A number of states and the District of Columbia have provided long-term care recipients with a private right of action. The legislative materials, court decisions, and commentaries in this report set out the reasons for these laws: other potential legal approaches have shortcomings; many long-term care residents are highly vulnerable due to their physical and mental conditions; and the history of regulatory oversight of quality in long-term care settings shows serious inadequacies. Arguably, the consumer’s private right of action is the remedy that is

• most consistent with an enhanced role for consumers; • most efficient because it cuts through the thicket of uncertainty surrounding other potential

legal claims; and • most likely to enable consumers to attain the higher level of civil and social rights promised

by the concept of assisted living.

States enacting private rights of action for recipients of assisted living services should consider inclusion of the following provisions:

A. Standing - A provision allowing any aggrieved person, including the long-term care

ombudsman and other advocates for residents, to bring an action on behalf of a resident or residents. Broad standing provisions are needed because of the strong possibility that the recipient will have no family support and/or suffer from some mental incapacity.

B. Damages - The right of action should allow for compensatory damages. The argument

for compensation for actual damages is clear. States establishing minimum amounts for violations of rights recognize that civil and personal rights have symbolic value, even if assigning a monetary value to them is difficult (Edelstein 1998, 379). The right of action should also allow for punitive damages that serve to punish and deter extreme behavior.

27 “Assisted Living in New England,” Assisted Living Focus, January 1998, p. 4.

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C. Equitable Relief - Claimants should be allowed to seek restraining orders and injunctive relief. Problems such as evictions cannot be adequately compensated for after the fact–e.g., the move itself could produce transfer trauma that can trigger any number of deleterious effects on residents’ health and emotional well-being.

D. Attorneys' Fees - Attorneys’ fees should be available to plaintiffs who prevail. Fee

awards are essential to ensuring legal representation. A private right of action will not likely be effective without an attorneys’ fees provision. Allowing the recovery of attorneys’ fees only by prevailing plaintiffs should reduce the possibility of frivolous actions.

E. Noncumulative Remedies - The statutory remedies should be in addition to other

remedies. Tort and other claims should remain available. Just as they are inadequate without the private right of action, so the right of action is inadequate without other remedies.

F. De Minimis Dismissal - A provision should be included for early dismissal based on

the de minimis nature of the claim. In order to protect providers from the possibility of frivolous lawsuits and in the interest of judicial economy, the law might include a provision, such as that found in the Maine law, allowing the court to dismiss a claim simply because the violation is so minor that it does not warrant the time, expense, and attention of the judicial system.

G. Waivers - The states should prohibit the waiver of the private right of action in a

contract as void and against public policy. As was shown earlier, contract terms can sometimes inappropriately limit consumer rights. Consumers should not have to litigate the legality of such a contract term, because such litigation would likely be time-consuming and expensive and would present an additional barrier to obtaining relief.

H. Exhaustion of Remedies - The state law should not require exhaustion of remedies

prior to pursuing lawsuits. This point is particularly important, given potential problems when contract terms require alternative dispute resolution.

I. Notice - Notice to public authorities as a condition to filing a suit should be required

only in the absence of a request for emergency relief. J. Public Benefits - Although most states do not routinely provide public funding for

assisted living, those that do provide such funding or those that may do so in the future should consider exempting all or at least a portion of any award from eligibility determinations concerning public benefits.

24

REFERENCES

CASES Alliance for Mentally Ill v. City of Naperville, 923 F. Supp. 1057 (N.D. Ill. 1996) Assisted Living Assocs. of Moorestown v. Moorestown Township, 996 F. Supp. 409 (D. N.J. 1998) Avallone v. Wilmington Medical Ctr., Inc., 553 F. Supp. 931 (D. Del. 1982) Bangerter v. Orem City Corp., 46 F.3d 1491 (10th Cir. 1995) Begandy v. Richardson, 510 N.Y.S. 2d 984 (Sup. Ct. 1987) Broemmer v. Abortion Services of Phoenix, Ltd., 840 P.2d 1013 (Ariz. 1992) City of Edmonds v. Oxford House, Inc., 514 U.S. 725 (1995) Delaney v. Baker, 20 Cal. 4th 23, 971 P.2d 986, 82 Cal. Rptr. 2d 610 (1999) Emory Univ. v. Porubiansky, 282 S.E.2d 903 (Ga. 1981) Falzone v. Busch, 45 N.J. 559, 214 A.2d 12 (1965) Guthmann v. La Vida Llena, 709 P.2d 675 (N.M. 1985) Harris v. Manor Healthcare Corp., 489 N.E.2d 1374 (Ill. 1986) Helen L. v. Didario, 46 F.3d 325 (3d Cir. 1994) Henrioulle v. Marin Ventures, Inc., 573 P.2d 465 (Cal. 1978) Hovsons, Inc. v. Township of Brick, 89 F.3d 1096 (3d Cir. 1996)

Innovative Health Sys., Inc. v. City of White Plains, 117 F.3d 37 (2d Cir. 1997) Javins v. First Nat’l Realty Corp., 138 U.S. App. D.C. 369, 428 F.2d 1071 (D.C. Cir.), cert. denied, 400 U.S. 925 (1970) Keck v. Jackson, 122 Ariz., 114, 593 P.2d 668 (1979) Madden v. Kaiser Found. Hospitals, 552 P.2d 1178 (Cal. 1976)

25

McCall and Anderson v. Fischer, No. C-970738 (Ohio Ct. App. July 24, 1998) Morgan v. Tolland County Health Care, Inc., No. CV 95469204S, 1996 WL 152118 (Conn. Super. Ct. 1996) In re Moorenovich, 634 F. Supp. 634 (D. Me. 1986) Olmstead v. Zimring, 119 S.Ct. 2176 (1999) Phillips v. U.S., 575 F. Supp. 1309 (D.S.C. 1983) Potomac Group Home Corp. v. Montgomery County, Md., 823 F. Supp. 1285 (D. Md. 1993) Profeta v. Dover Christian Nursing Home, 458 A.23 (A.D. 1983) Smith & Lee Associates v. City of Taylor, 102 F.3d 781 (6th Cir. 1996) Smithson v. Integrated Health Services of Lester, Inc., Civ. A. No. 99-199 (E.D. Ky. Aug. 13, 1999) Stiffleman v. Abrams, 655 S.W.2d 522 (Mo. 1983) Sypert v. U.S., 357 F. Supp. 546 (D.D.C. 1983) Tunkl v. Regents of the Univ. of Cal., 383 P.2d 441 (Cal. 1963) Villari v. Terminix Int’l, Inc., 663 F. Supp. 727 (E.D. Pa. 1987) Wagner v. Fair Acres Geriatric Ctr., 49 F.3d 1002 (3d Cir. 1995) Williams v. Walker Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965)

26

STATUTES

29 U.S.C. § 706(8)(B) 29 U.S.C. § 794 42 U.S.C. §§ 3601-3631 42 U.S.C. § 3602 (h) 42 U.S.C. § 12101 42 U.S.C. § 12102(2) Ark. Code Ann. § 20-10-1209 (1999) Cal. Health & Safety § 1430 (West Supp. 1989) Cal. Welf. & Inst. Code § 15600 (West 1998) Conn. Gen. Stat. § 19a-550(b) (1989) D.C. Code Ann. § 32-1453 (1988) Fla. Stat. § 400.023 (1986) GA. Code Ann. § 31-8-136 (1999) Ill. Admin. Code tit. 77, § 370.3070 (2000) Ill. Ann. Stat. Ch. 1111/2 P. § 4153-601-610 (Smith-Hurd 1988) Ky. Rev. Stat. Ann. § 216.515(26) (Banks-Baldwin 1982) La. Rev. Stat. Ann. § 40:2010.9 (West 1989) Me. Rev. Stat. Ann. tit. 22, § 7948(1) (West 1998) Mo. Ann. Stat. § 198.093(3) (West 1988) N.C. Gen. Stat. § 131E-123 (1988) N.C. Gen. Stat. § 131D-28 (1999)

27

N.D. Cent. Code §50-10.2-02 (1999) N.H. Rev. Stat. Ann. § 151:30 (1987) N.J. Stat. Ann. § 30:13-8 (West 1981) N.J. Admin. Code tit. 8, § 43-14.2 (2000) N.Y. Pub. Health Law § 2801-d (McKinney 1985) Ohio Rev. Code Ann. § 3721.17(I) (West 1987) Okla. Stat. Ann. tit. 63, § 1-1918(G ) (1984) W. Va. Code § 16-5C-15(c) (1985) Wash. Rev. Code Ann. § 74.34.200 (West 1999) Wis. Stat. Ann. § 50.10 (West 1987)

28

ARTICLES AND REPORTS

Assisted Living Focus, “Assisted Living in New England,” (January 1998), p.4. Bertrand, Bill (Sept. 1989). "Wisconsin’s Private Cause of Action For Nursing Home Residents", Wis. Law. 62. Consumer Reports, "Can Your Loved Ones Avoid a Nursing Home? The Promise and Pitfalls of Assisted Living" (October 1995). 60:656-657. Crotts, Troy J., and Daniel A. Martinez (1996). "Elder Law: The Nursing Home Residents Rights Act -- A Good Idea Gone Bad!" Stetson L. Rev. 26. Davis, Gary, Lawsuit Challenges Nursing Home Deal, St. Petersburg Times, Nov. 7, 2000, available at http://www. sptims.com/News/110700/Pasco/Lawsuit Edelstein, Stephanie (1998). "Assisted Living: Recent Developments and Issues for Older Consumers," Stan. Law & Pol’y Rev. 9. Furrow, Barry R,. Managed Care Organizations and Patient Injury: Rethinking Liability, 31 Ga. L. Rev. 419, 493 (1997) Hawes, Catherine (1995). The Commonwealth Fund, Assuring Nursing Home Quality: The History and Impact of Federal Standards in OBRA-87. Hawes, Catherine, et al. (1995). Executive Summary: Analysis of the Effect of Regulation on the Quality of Care In Board and Care Homes, 20. Mollica, Robert L., Ed. D. (1998). State Assisted Living Policy: 1998, U.S. Department Of Health And Human Services, Office of the Assistant Secretary for Planning and Evaluation, 6-8. Nader, Ralph, and Wesley J. Smith (1996). No Contest: Corporate Lawyers And The Perversion Of Justice In America (New York: Random House). National Center for Assisted Living (1988). 1998 Facts and Trends: The Assisted Living Sourcebook (Washington, DC: American Health Care Association). Price Waterhouse & Cooper (1998). The Assisted Living Industry, an Overview-1998. Schwartz, David. Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration, 1997 Wis. L. Rev. 33, 60-61 (1997).

29

Sternlight, Jean R. Pancea or Corporate Tool?: Debunking the Supreme Court’s Preference for Binding Arbitration, 74 Wash. U. Law Q. 637, 684-85 (1996) U. S. General Accounting Office (1989). Board and Care: Insufficient Assurances That Residents’ Needs Are Identified And Met (Washington, DC: U.S. General Accounting Office). U. S. General Accounting Office (April 1999). Quality-of-Care and Consumer Protections Issues in Four States, HEHS 99-27 (Washington, DC: U.S. General Accounting Office). U. S. General Accounting Office (March 1999). Nursing Homes: Additional Steps Needed to Strengthen Enforcement of Federal Quality Standards, HEHS 99-46 (Washington, DC: U.S. General Accounting Office). U. S. House of Representatives, Select Committee on Aging (1989). Board and Care: A National Tragedy. U.S. House of Representatives Report No.100-391(I) (1987), reprinted in 1987 U.S.C.C.A.N. 2313-268. Warren, Leslie Werstein (Mar. 2000). "Driven Out," Best’s Review 85.