Affiliate of Collapsing Skyline Dodges Class Action Suit in Arkansas

A federal judge dismissed a possible class action lawsuit against Skyline Highland Holdings, an entity linked to the manager of the collapsing Skyline Healthcare chain, which has seen multiple skilled nursing facilities enter forced receivership in recent months.

The case was filed by plaintiffs James Green, Mercedes Anderson, and Brenda Woodard back in August 2017. Their amended complaint alleged that four of the defendant’s nursing homes, their parent companies, and their various administrators intentionally limited the number of staff and licensed nurses on duty.

But the claims were dismissed because of a lack of specificity, according to a June 12 order dismissing the case from Judge Brian Miller of the U.S. District Court for the Eastern District of Arkansas.

“Importantly, the amended complaint does not describe how any particular defendant harmed any particular plaintiff,” the order said. “It does not discuss any particular damage or injury suffered by the three identified residents, who are represented by the named plaintiffs, on account of the alleged understaffing. Instead, the complaint refers to the collective conduct of all of the defendants as causing collective injuries suffered by various, unidentified nursing home residents.”

That was enough to sink the case, because the plaintiffs have to plead facts with specificity — “the who, what, when, where and how of the conduct,” according to George Mesires, leader of the senior housing and care practice at the law firm of Faegre Baker Daniels.

“Plaintiffs cannot simply rely on allegations of damages to unidentified class members to support their breach of contract claim,” the order noted. “Rather, plaintiffs need to plead that the defendants breached contractual obligations owed specifically to the plaintiffs and that they personally suffered damages as a result. They have failed to do so.”

That led to the breach of contract claim being dismissed with prejudice for the non-nursing home defendants, though it was dismissed without prejudice for the nursing home defendants.

Skyline Highland Holdings, JS Highland Holdings, and Joseph Schwartz were among the defendants in the case. Schwartz was the sole member of JS Highland, which owned the four homes being sued, and the effective owner of all the nursing homes, according to a December 2017 article in Lexis Legal News.

Schwartz owns the Skyline Healthcare chain, which collapsed by degrees over the course of spring amid unpaid bills and concerns about the continued quality of care. The first state to report trouble was Nebraska, which put 21 facilities into the control of a third-party receiver on March 23. Kansas soon followed, with South Dakota, Pennsylvania, and Arkansas joining in the next month. At the time of the South Dakota and Pennsylvania receiverships, Skyline indicated it would be exiting the skilled nursing space.

What’s next for the Arkansas facilities isn’t clear.

“It is unclear whether the plaintiffs will try again by amending their complaint with more specific allegations,” Mesires said. “They did not seek relief to amend their complaint in the event their complaint was dismissed, but the possibility remains even if it appears to be a steep hill to climb.”

Written by Maggie Flynn

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Maggie Flynn on Linkedin
Maggie Flynn
Business reporter at Aging Media Network
When she's not working, Maggie enjoys running, reading, writing and sports, in no particular order. Favorite things include murder mysteries, Lake Michigan and the Pittsburgh Penguins.

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