Pursuing Corporate Overseers On A “Conspiracy” Theory Of Liability

April 19, 2024

As discussed in earlier blogs, affixing liability against an elder care facility’s corporate overseers is critical in elder abuse litigation. This is important morally, as the corporate overseers are invariably responsible for neglect that occurs at the facility because they control key features of facility operations such as staffing, supplies, and staff pay. Securing corporate liability also is important to ensure that corporate defendants are held accountable for their wrongdoing. Typically, the financial benefits of nursing home operators’ ill-conceived plan to maximize profits at the expense of patient care are maintained by the corporate overseers. Thus, a judgment against solely the facility not only may be uncollectible but also will be substantially less than would be available if the corporate defendants were held liable because punitive damages are capped at 10% of the overall net worth of the defendants.

There are many different legal theories elder abuse practitioners can use to pursue corporate overseers in connection with the neglect that their clients suffered while residing in an elder care facility. These theories include, but are not necessarily limited to, direct, joint venture, conspiracy, aider and abettor, and alter ego liability.

This blog addresses pursuing corporate entities under a “conspiracy” theory of liability. Under the governing jury instruction, any entity that conspires with another in harming a plaintiff is liable for the wrongdoing alleged.

Plaintiffs can contend that the facility defendant and the Corporate Defendants were co-conspirators in a scheme to maximize profits at the expense of patient care and that this scheme caused harm to the plaintiff. Plaintiffs can contend that conspiracy liability against the Corporate Defendants exists if plaintiffs prove the following: (1) the Corporate Defendants were aware that the facility defendant was engaged in a plan to maximize profits at the expense of patient care, resulting in harm to the plaintiff; and (2) the Corporate Defendants agreed with the facility defendant’s scheme and intended that it be engaged in. CACI 3600. A conspiracy may be inferred from circumstances, including the nature of the acts done, the relationships between the parties, and the interests of the alleged co-conspirators. Id. Plaintiffs are not required to prove that the Corporate Defendants personally committed a wrongful act or that they knew all the details of the agreement or the identities of all the other participants. Id.

As to this derivative theory of liability, if the elements necessary to establish it are present, the Corporate Defendants are liable to the same extent as is Pine Creek not because of their direct conduct toward the plaintiff but instead because of their relationship with these defendants. See CACI 3600 (if conspiracy found co-conspirators are all liable for harm even if they did not directly cause it).

In our experience few elder abuse practitioners allege conspiracy liability against the Corporate Defendants likely because this theory is unfamiliar to them. However, it also has been our experience that trial judges are very familiar with this theory of culpability because it comes up often in criminal cases and the great majority of trial judges have presided over numerous criminal trials in their tenure. Thus, despite what defense counsel might think and argue, conspiracy liability is not a radical or novel theory of liability in the law. Instead, it is well established and is readily understood by judges and juries alike.

The evidence supporting a conspiracy theory of liability against the corporate defendants would be the very same evidence used to show defendants’ direct, joint venture, and alter ego liability, to wit, evidence that the Corporate Defendants exerted substantial control over the facility defendant and exercised this control in a manner designed to maximize profits. The reader is referred to other blogs that provide more specifics on this evidence.

For Attorneys

View All Posts »