A California appeals court this week ruled that hospitals can be held responsible for sexual abuse against patients by their employees—particularly in psychiatric hospitals where abuse is often "a foreseeable hazard arising from the circumstances of the job."

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Background

In 2016, Juan Valencia, a mental health worker at Aurora Vista del Mar Hospital, a psychiatric hospital, in Ventura, California, was convicted of sex crimes involving three female patients at the hospital in 2013. Valencia was sentenced to more than six years in jail, the Los Angeles Times reports.

Then, the three patients sued Aurora Vista, as well as its parent company, Signature Health Services, alleging that the hospital hired Valencia, an unlicensed mental health worker, despite a history of sexual misconduct.

Previously, Valencia had been convicted of a sexual crime that would have required him to register as a sex offender, but the case was later reduced to a misdemeanor and ultimately dismissed. However, the conviction did not surface during the hospital's initial background check.

In addition, the plaintiffs argued the hospital did not properly supervise Valencia while he was working. Under hospital policy, male employees were allowed to be alone with female patients for no more than 20 minutes a day, with the door open.

During the 2019 trial, Thomas Beach, who represented Aurora Vista, argued the hospital was not responsible for Valencia's crimes since they were "done in secret and outside the duties of his employment," according to the LA Times.

However, a jury ultimately determined that Valencia, Aurora Vista, and Signature were all culpable for what happened to the women at the hospital. Overall, the jury allocated 30% fault to Signature, 35% to Aurora Vista, and 35% to Valencia. In addition, according to the LA Times, the three plaintiffs were awarded several million dollars in compensatory damages, with one receiving $6.5 million, one $3.75 million, and one $3 million.

Following the verdict, Aurora Vista's representatives said they would appeal the decision.

Hospitals can be responsible for abuse by employees, appeals court rules

The Second District Court of Appeals in Ventura this week upheld the jury's allocation of fault, arguing that employers can be held fully responsible for sexual abuse by their employees if workplace conditions or neglect contributed to the abuse.

Specifically, in a 3-0 decision, the appeals court said previous cases supported the decision to place greater blame on the organizations as negligent parties that failed to protect the victims in the case.

The court acknowledged that while employers are not generally held responsible for sexual abuse by employees, which courts usually classify as individual behavior that cannot be easily predicted or prevented, a stricter standard can be applied to hospitals, particularly mental hospitals. 

According to Justice Arthur Gilbert, patients in psychiatric hospitals are particularly vulnerable to abuse, and sexual abuse by employees is "a foreseeable hazard arising from the circumstances of the job."

"Here Aurora and Signature are sophisticated parties who should know how to operate a psychiatric hospital to assure the safety of their patients," Gilbert wrote in the court's opinion. "Instead, they operated the hospital recklessly and maliciously to make what happened almost inevitable."

"If the perpetrator had not been Valencia, it would have been someone else," he added. "The jury correctly attributed [65%] of the fault to Aurora and Signature."

In addition, the court upheld the $6.75 million in damages awarded to two of the patients involved in the original trial. Previously, representatives of the hospital had argued that damages awarded by the jury were excessive and cited a California law limiting noneconomic damages in medical malpractice cases to $250,000.

However, the appeals court said the medical malpractice limit only applies to cases brought on behalf of deceased patients. Because the Aurora Vista plaintiffs are currently alive, they are eligible for the jury's entire damage award.

The court has also ordered a retrial to determine whether Aurora Vista must pay the entire damage award to the plaintiffs, although a date has not yet been set. (Associated Press, 4/5; Egelko, San Francisco Chronicle, 4/6; Muoio, Fierce Healthcare, 4/7; Karlamangla, Los Angeles Times, 6/21/19; Karlamangla, Los Angeles Times, 8/13/19; Kisken, Ventura County Star, 6/20/19; Kisken, Ventura County Star, 8/12/19)