Wednesday, April 25, 2018

Legislators target 'renegade' Tampa law firm with bill to limit nursing home lawsuits

TALLAHASSEE — Jim Wilkes has a target on his back.

The Tampa trial lawyer whose success at suing nursing homes for neglect and abuse of residents has drawn millions in damages from the industry.

Now they've turned to the Florida Legislature to stop him.

Wilkes' model, which has been successfully employed in Florida and eight states where he has offices, is to not only target the owners and management companies — which can often be shell companies that shield the assets of owners and investors — but to target the investors, vendors and contractors, when he can show they have a role in the company's decision-making. He also seeks large punitive damages.

In Polk County, where a nursing home shut down its management company after Wilkes sued, he won a $1 billion judgment in 2012 when the company didn't put up a defense. In Pinellas County, a jury awarded $200 million to the family of a nursing home patient who died of neglect.

"They keep putting companies in bankruptcy and transferring assets, and we follow the assets and now the courts are able to go up the ladder,'' said Wilkes, 63.

The result, the industry says, is having a chilling effect on investment income into nursing homes in Florida — at a time when older nursing homes want to update and retrofit in preparation for a surge in growth with the aging of baby boomers.

"He's been very effective at stopping the flow of money into Florida. People are scared,'' said J. Emmett Reed, executive director of the Florida Health Care Association, which represents the industry. "With the baby-boomers coming into Florida, we need more money for long term care, not less."

SB 670 and HB 569, advancing through the House and Senate, would stop Wilkes' strategy in Florida by preventing "passive investors" from being named in a lawsuit unless a court determines they have had an active role.

"It is impossible to completely hide all of your assets,'' Reed said. "This doesn't make it any easier or harder to get sued as a direct care giver. This is simply protection for the passive investor.''

Wilkes contends the bill is written too broadly to describe who is considered a passive investor and restricts discovery in such a way that it will make it more difficult to persuade a judge that there is a link between the investor and the nursing home.

It would seem to be a convincing argument, except few are convinced. The Senate Judiciary Committee voted out its bill 8-1 on Tuesday and the House Civil Justice Subcommittee approved its version 10-3 last week.

The Florida Justice Association — the organization that represents trial lawyers to which Wilkes is not a member — has signed onto the legislation, after fighting similar proposals for the three previous sessions.

In return, it won new language that will make it easier for residents of nursing homes, and their relatives and lawyers, to get documents without having to establish an estate.

Wilkes says the trade-off is for trial lawyers to file more frequent lawsuits that produce smaller settlements, while the industry gets a stronger shield against reporting how it spends its money. The Florida Justice Association denies that is its goal.

"It's commendable that the trial lawyers and the nursing home industry came together and concluded this is something they could agree on," said Sen. Arthenia Joyner, D-Tampa, the lone no vote on the Senate Judiciary Committee. But she concluded, "it's a deal and people make deals that benefit them."

Nursing homes in Florida receive more than 90 percent of their revenues from state and federal funds, either through payments from Medicaid and Medicare. Wilkes contends the investment companies have found nursing home management so profitable that they don't want regulators to interfere by forcing greater disclosure of their management structure that relies on real estate leases and a constant churning of ownership.

"If you don't have transparency you can't accurately reimburse,'' he warned. "The ability to contain medical costs will evaporate.''

He also scoffs at the claim that investors are scared away from Florida. One of the largest nursing home investors in the state, Formation Capital, on Monday announced it had sold its health care portfolio — 35 percent of which is in Florida — for $1 billion.

"If all they're doing is investing they don't have any liability,'' he said. "We'd never sue somebody who is just a lender — we'd be thrown out of court. This bill is designed to protect the shady investor."

The AARP of Florida, which represents elders in Florida, sides with the trial lawyers and has agreed to the bill.

Joining Wilkes is Families for Better Care, a nonprofit that advocates for senior rights and is heavily funded by Wilkes. With them is the National Organization for Women Florida Chapter, the Florida Alliance for Retired Americans, and union groups representing the health care workers in nursing homes.

The nursing home industry, which has been seeking a version of this bill for years, spent $2.4 million on political campaigns in 2012 and has contributed another $903,000 on legislative campaigns so far this cycle.

Wilkes and his law partner Timothy McHugh, by contrast, have given $18,000 this election cycle to legislative campaigns, including $14,000 in December to the political committee of the Senate Judiciary Committee chairman, Sen. Tom Lee, R-Brandon.

The target of the bill is so well-known that Reed, of the Florida Health Care Association, told the Associated Press: "What this does is isolate one renegade law firm — Wilkes."

Marie Hagen, a nurse at Brynwood Center nursing home in Monticello, told a House committee that Wilkes' tactics were harassing her nursing home and "take an emotional toll on staff morale." Hagen's nursing home had never even been sued by Wilkes and McHugh.

Sen. John Thrasher, R-St. Augustine, said Tuesday he was confident the bill won't hurt anyone, but will add clarity to the law.

"If I thought for one minute this bill was detrimental to anybody in my district who is in a nursing home, I wouldn't vote for it,'' he said.

He noted that Wilkes "is involved in massive, massive litigation" and said that "to suggest that anybody put any pressure on anybody in this room is absolutely incorrect and a misguided statement."

Wilkes believes the courts will have the final say. "I think it would be declared unconstitutional,'' he said.

The inability to do effective discovery will result in denying access to the court, he said, and the treatment of nursing home residents differently than anyone else who is harmed from neglect or abuse will be found to violate the equal protection rights of the Constitution.

"They're not afraid of me,'' said Wilkes. "They're afraid of exposure."

Contact Mary Ellen Klas at [email protected] and @MaryEllenKlas

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