Corporate Liability & Nursing Home Abuse: An Overview
Most nursing homes in California are part of a larger group of facilities under common corporate ownership. These types of facility often operate within a complex web of related companies, each with a specific purpose:
- Operating Companies own the operations of individual nursing homes
- Property Companies own the land and buildings where the facilities operate
- Management Companies handle things like staffing, budgeting, and other management services
- Holding Companies own other companies and are often used for tax, financial, or legal reasons
- Top Companies sit at the top of the ownership chain and are often structured to limit legal or financial exposure.
The precise organizational structure will vary widely from operation to operation. In some cases, the management company is part of the ownership chain; in others, it’s a separate outside company. Sometimes the operating company rents the property from a third-party landlord.
Whatever the details of a particular enterprise, understanding the corporate structure behind a facility is essential to establishing liability in elder abuse litigation. Even if owners or managers never meet residents, their choices can directly affect the care people receive every day. By controlling resources that determine the quality of care, these companies effectively control how their residents are treated.
Holding Corporate Overseers to Account for Elder Abuse
There are a number of ways in which corporate overseers — those who own, manage, or control a facility — can be held liable for harm caused to residents. Let’s take a very brief look at some common theories of liability that crop up in elder abuse lawsuits.
Direct Liability. A corporate owner or manager can be held directly responsible if a jury finds that the company itself engaged in, approved of, or allowed neglect, abuse, or other misconduct that caused harm to an elder. To prove direct liability, the plaintiff (the injured person or their representative) must first show that the company had ‘care or custody’ of the resident (see last week’s blog for an overview of the care/custody relationship between companies and residents).
Joint Venture. Plaintiffs may assert that corporate defendants are in a ‘joint venture’ with facility defendants.
Aider and Abettor. The ‘aider and abettor’ theory of liability holds that liability exists when corporate overseers were aware of plans to maximize profits at the expense of care.
Conspiracy. According to the Judicial Council of California Civil Jury Instructions (CACI), entities that conspire with other entities in a way that causes harm are liable for the alleged wrongdoing.
Agency. If a defendant facility acts as an ‘agent’ for corporate overseers, the corporate defendants may be liable for elder abuse.
Alter Ego. A facility may be acting as an ‘alter ego’ for corporate overseers. We will look more closely at this type of practice in a future blog.
In short, while the ownership structures of long-term care chains can be complicated, they can’t be used to escape responsibility. When corporate decisions affect the level of care residents receive, those corporate overseers can and should be held accountable.
What Families Can Do
- Ask questions about who owns and manages the facility. You have a right to know who is ultimately in charge
- Keep records of any concerns about staffing, cleanliness, or safety
- Report problems early to administrators, ombudsmen, or state agencies
- Seek legal guidance if you suspect neglect or abuse — an experienced elder law attorney can help identify all the responsible parties, even those hidden behind complex corporate structures.
Families deserve transparency. They need to know that every company profiting from elder care — from the facility itself to the corporations behind it — is held to the same standard of care and accountability. If your loved one has suffered elder abuse in a nursing home, contact our dedicated elder abuse lawyers in Los Angeles, San Francisco, Santa Barbara, and Sacramento.
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