When Michael Loucks announced back in May that he was joining Skadden, Arps, Slate, Meagher & Flom, the former Boston federal prosecutor, who specialized in healthcare fraud cases, told us that nursing home compliance programs were about to become a big source of work for defense attorneys. Privately, we thought: nursing home litigation? Really?

Now we see his point pretty clearly. On Tuesday, a California state court jury awarded $671 million in damages to a class of plaintiffs who alleged that Skilled Healthcare Group had inadequately staffed its nursing homes. According to data compiled by Bloomberg, this is the largest verdict of 2010.

(Bad news apparently comes in twos for California defendants. Bloomberg reported late Wednesday that state court jurors delivered a $269.4 million verdict against Walt Disney in litigation over profits from the hit show “Who Wants to Be a Millionaire”; that verdict is reportedly the third-largest of the year. We’ll have more on the Millionaire case, which we previewed last month, on Thursday.)

At issue in the nursing home class action, filed four years ago, was a California statute that requires such facilities to devote 3.2 nursing hours to each patient every day. According to a report from the Contra Costa Times, the class included some 32,000 patients who resided in 22 Skilled Healthcare facilities in California between 2003 and 2009. The jury awarded the class the statutory maximum of $500 per patient per day, for a total of $619 million in damages. Then they tacked on another $58 million in restitution.

Class counsel W. Timothy Needham of Janssen, Malloy, Needham, Morrison, Reinholtsen, Crowley & Griego told us that the case turned on the facilities’ own records. “It was smoking gun after smoking gun,” he said.

Plaintiffs lawyers, he added, first began to consider a class action against Skilled Healthcare after suing the company and its facilities in individual wrongful death cases and learning of widespread violations. Needham told us Skilled Healthcare e-mails, which the company battled unsuccessfully to keep from the plaintiffs, exposed the violations and ultimately helped contradict testimony by the company’s witnesses at trial.

Skilled Healthcare, which was represented by Kippy Wroten of Wroten & Associates, said it would fight the verdict.

“We are deeply disappointed in the verdict, and continue to firmly believe that our facilities are appropriately staffed and that our caregivers work hard every day to provide the care and services our residents need and deserve,” said Skilled Healthcare CEO Boyd Hendrickson in a statement. “We strongly disagree with the outcome of this legal matter, and we intend to vigorously challenge it.”

In addition to Janssen Malloy, the class was represented by the Law Offices of Michael Thamer and Luce, Forward, Hamilton & Scripps, according to court records.

The case could become an even bigger nightmare for Skilled Healthcare: According to the Contra Times, the jury will consider punitive damages next week.