$27.5M Verdict in Whistleblower Case Against Hospital
Table of Contents
Case Background
Nancy Valla had been hired in April 2018 as the Chief Nurse Executive Officer at St. Mary Medical Centre in Long Beach, which is operated by Dignity Health. In March 2019, a tragic suicide occurred when a woman leapt from the hospital’s parking structure. This was not the first time such an incident had taken place; another person had died similarly in 2013, which had triggered a $50,000 fine and recommendations to install safety barriers. No such barrier had ever been built.
Valla, emotionally shaken by the preventable nature of the tragedy and the facility’s inaction, began advocating strongly for safety improvements. At the same time, she suffered from acute emotional distress, including PTSD and depression, which she reported to her superiors. Her calls for safety measures and requests for mental health accommodations were repeatedly dismissed or ignored. She eventually went on medical leave and was replaced soon after. She filed suit claiming retaliation, discrimination, failure to accommodate her disability, and wrongful termination.
The Cause that led to the legal dispute
Valla sued Dignity Health, its St. Mary facility, and CEO Carolyn Caldwell under several California statutes. She alleged whistle-blower retaliation under Labour Code 1102.5, retaliation and discrimination under Health & Safety Code 1278.5, multiple violations of the Fair Employment and Housing Act (FEHA), and common law claims including intentional infliction of emotional distress and wrongful termination.
The Personal Impact
Valla claimed severe emotional and psychological injuries resulting from the suicide incident itself and her employer’s response to it. She experienced nightmares, persistent anxiety, crying spells, and an inability to concentrate. These symptoms worsened when the hospital allegedly forced her to cancel therapy appointments to attend work meetings. Eventually, she could not continue working and went on leave, later learning she had been replaced.
Damages suffered
The jury awarded Valla $27.5 million after finding that Dignity Health and its executives had retaliated against her for blowing the whistle and failed to provide reasonable accommodations for her mental health disability. The damages covered emotional distress, lost wages and benefits, and included a substantial amount in punitive damages, signalling the jury's belief that the conduct of the Defendants was especially harmful or malicious.
Key Arguments and Proceedings
The Plaintiff’s attorneys argued that Valla had tried to do the right thing both by pushing for long-overdue safety measures and by seeking help for her trauma, but was punished for both. They presented emails, witness testimony, and hospital policies to show a pattern of dismissiveness and retaliation. They emphasised how leadership laughed off her concerns, minimised her trauma, and ultimately forced her out.
The defense denied all allegations. They argued that Valla had not been fired but had voluntarily stepped away. They also challenged whether her condition truly met the legal definition of a disability and whether her actions had really been protected activity under whistle-blower laws.
After a multi-week trial in Los Angeles Superior Court, the jury returned a unanimous verdict in favour of Valla, deliberating for only an hour. The verdict sent a clear message that retaliation and disability discrimination, particularly in a healthcare setting, would not be tolerated.
Legal Representation
Plaintiff: Nancy Valla
Counsel for Plaintiff: David deRubertis | Brennan M. Hershey | John A. Rundell | Jonathan W. Hornberger | Kelsi D. Grau
Defendants: Dignity Health d/b/a St. Mary Medical Center Long Beach | Carolyn Caldwell
Counsel for Defendants: Linda B. Hurevitz | Jessica Gomez | Eric C. Schwettman | Linda Miller Savitt
Key Arguments by Counsel
Plaintiff’s counsel presented Valla as a dedicated healthcare leader who raised alarms not just about structural safety but also systemic indifference. Her termination, they argued, had been a calculated effort to silence her. Defense counsel pushed back, suggesting her departure was due to her own health, not any retaliatory intent.
Claims Asserted
Labor Code 1102.5 Retaliation: Valla had reported potentially illegal hospital conduct and had been punished for doing so.
Health & Safety Code 1278.5 Retaliation/Discrimination: Valla had alleged that she had been retaliated against and discriminated against after raising concerns about patient safety, in violation of protections provided to healthcare workers under this statute.
FEHA Violations: Valla’s claims had included failure to engage in the interactive process, failure to accommodate, disability discrimination, and retaliation.
Wrongful Termination: She had alleged her exit had been a constructive termination rooted in unlawful motives.
Intentional Infliction of Emotional Distress: She had alleged the hospital's treatment had been so severe that it had crossed the line into intentional cruelty.
Defense Arguments
The hospital denied all wrongdoing, claiming that Valla had voluntarily stepped away. It asserted that it had provided reasonable accommodations and that any employment actions were based on legitimate business reasons. The defense also argued that she had failed to mitigate damages and did not meet the legal definition of a disability under the applicable standards.
Jury Verdict
After a swift deliberation of just one hour, the Los Angeles jury returned a unanimous $27.5 million verdict in favor of Nancy Valla. The award represented a powerful rebuke of how Dignity Health and its leadership had treated a high-level nurse executive who tried to speak up for safety and sought help when she was emotionally overwhelmed.
Court documents are available upon request at jurimatic@exlitem.com