UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 12-1077

LIBERTYWOOD NURSING CENTER,

Petitioner,

v.

KATHLEEN SEBELIUS, Secretary of the United States Department 

of Health and Human Services,

Respondent.

On Petition for Review of an Order of the Department of Health

and Human Services. (A-11-106)

Argued: December 4, 2012 Decided: February 28, 2013

Before MOTZ, FLOYD, and THACKER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, PLC, 

Arlington, Virginia, for Petitioner. Erin Stacey Shear, UNITED 

STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Atlanta, 

Georgia, for Respondent. ON BRIEF: William B. Schultz, Acting 

General Counsel, Dana J. Petti, Chief Counsel, Region IV, 

Christine Bradfield, Deputy Chief Counsel, Region IV, UNITED 

STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Atlanta, 

Georgia, for Respondent. 

Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM: 

Libertywood Nursing Center is a skilled nursing facility, 

which provides care to Medicare and Medicaid beneficiaries in 

North Carolina. Libertywood appeals the final determination of 

the Secretary of the United States Department of Health and 

Human Services (DHHS) that imposed a civil monetary penalty for 

its failure to substantially comply with certain Medicare

regulatory requirements. The Centers for Medicare and Medicaid 

Services (CMS), a division of the DHHS, made the initial 

determination that Libertywood was in noncompliance and assessed 

the civil monetary penalty. Thereafter, an Administrative Law 

Judge (ALJ) and the Departmental Appeals Board (DAB) upheld the 

determination and assessment. We have jurisdiction to consider 

this appeal pursuant to 42 U.S.C. § 1320a-7a(e) and 42 U.S.C. 

§ 1395i-3(h)(2)(B)(ii). For the reasons that follow, we affirm.

I.

On August 27, 2009, Libertywood admitted Resident 2 to its 

facility. His admitting diagnoses included Parkinson’s disease, 

chronic kidney disease, and progressive dementia. He was 

consistently disoriented and semi-ambulatory with the use of a 

wheelchair. Dr. Timothy Beittel, then the medical director for 

Libertywood and Resident 2’s attending physician, wrote that 

Resident 2 had a history of problematic behavior, “including 
3

hitting [and] groping staff [and] patients.” A few days after 

being admitted, a Libertywood staff member made a notation in 

Resident 2’s file stating that he engaged in “sexually 

inappropriate behavior towards female staff.” The file also 

notes that on the same date that Dr. Beittel made a “Referral to 

Psychiatry and Psychologist.” Dr. Beittel later testified, 

however, that Resident 2 did not receive psychotherapy due to 

his cognitive deficiencies.

According to Libertywood’s Nurse’s Notes, on September 6, 

2009, “[Resident 2] rolled [his wheelchair] beside [Resident 5] 

and began fondling her left breast. [The] nurse moved him to 

[the] other side of [the] day area and will monitor.” An hour 

and fifteen minutes later, another resident reported that 

“[Resident 2] returned to [Resident 5] and put his hand under a 

blanket on her lap. She stated [that] he was feeling [her] all 

over, around her diaper.”

Thereafter, on September 8, 2009, a staff member wrote in 

the Nurse’s Notes that “Resident [2] had [his] hand under 

[another resident’s] clothing at supper.” After this incident, 

there is a September 9, 2009, entry in Resident 2’s Care Plan, 

which states that he “ha[d] become increasingly aggressive in 

seeking sexual relationships with others.” To address the 

problem, the Care Plan lists fourteen methods of intervention, 

including, but not limited to, redirecting Resident 2 when he 
4

displayed inappropriate sexual behavior, administering his 

medications and monitoring the side effects, evaluating his 

medications to ensure that they were effective in managing and 

decreasing his sexually inappropriate behavior, one-to-one 

monitoring, and “encourag[ing] [his] participation in activities 

to aide in distracting and preventing aggressive sexual 

behaviors.”

On September 15, 2009, Resident 2 told another resident 

that “he wanted her for tonight.” Subsequently, on September 

20, 2009, the Nurse’s Notes reflect that Resident 2 “wheels 

himself up to different female residents and tr[ies] to put 

[his] hands on their body[.] [W]hen ask[ed] to move away [he] 

goes to another female resident.” According to the Notes, the 

staff member “spoke to [Resident 2] and told him not to be 

putting his hands on other residents.” Resident 2 responded: 

“Well I guess I better go wash my hands since I touched 

everyone.” He then went to his room and washed his hands. 

A September 29, 2009, entry in the Nurse’s Notes states

that Resident 2 had been redirected six times when he was seen 

“attempting to be inappropriate with residents at different 

times.” Then on October 6, 2009, a staff member wrote that 

Resident 2 “rolled up [b]ehind [a] female [resident] [r]eached 

over [her and] stuck his hand [d]own her shirt.” The staff 

member moved him away from the female resident. According to 
5

the Weekly Nurse Summary, he also grabbed a nurse’s “[b]reast 

and [b]uttocks during shower” that same day. 

On October 14, 2009, Resident 2 rolled up in his wheelchair 

to a female resident and asked, “[R]eady to go to bed?” Staff 

then removed him from the area. The Weekly Nurse Summary also 

notes that a staff member observed Resident 2 touching a female 

resident’s breast on this date.

Then on October 17, 2009, Resident 2 went into Resident 1’s 

room and “started fondling [her] on the breast and touching 

[her] on the vagina.” Resident 1 informed Resident 2 that “she 

was married” and “don’t do that[,] but Resident [2] 

continued[.]” Resident 1 had a disease that prevented her from 

defending herself. Resident 1 later stated that “she did not 

feel safe [at Libertywood].” The administrator subsequently

ordered one-to-one supervision of Resident 2 from 9:00 AM to 

8:00 PM each day and ordered the staff to make checks on him 

every fifteen minutes the rest of the time.

Nevertheless, on November 13, 2009, at 7:50 AM, before oneto-one supervision commenced, Resident 2 “[r]olled over to [a 

female resident] and had his hand up her shirt touching her 

[b]reast.” A staff member removed him from the area and asked 

“him to quit touching other [r]esidents.” Immediately 

thereafter, Libertywood changed the one-to-one schedule to begin 

at 7 AM and end when Resident 2 went to bed. Four days later, 
6

on November 17, 2009, Resident 2 transferred to another nursing 

home.

Thereafter, the North Carolina Department of Health and 

Human Services, on behalf of CMS, completed a survey in response 

to a complaint that had been filed against Libertywood. The 

survey found that Libertywood was not in substantial compliance 

with certain Medicare requirements. Moreover, it revealed that 

the noncompliance posed immediate jeopardy to the residents’

health and safety. Consequently, CMS imposed a civil monetary 

penalty of $3,700 per day for Libertywood’s noncompliance from 

September 6, 2009, through November 17, 2009, and a $100 per day 

civil monetary penalty from November 18, 2009, until December 

11, 2009.

Libertywood timely requested a hearing on CMS’s 

determination. Thus, on September 30, 2010, an ALJ convened a 

hearing on the matter, after which she affirmed CMS’s 

determination. In sum, the ALJ held that Libertywood “was not 

in substantial compliance with the Medicare program 

requirements, its deficiencies posed immediate jeopardy to 

resident health and safety, and the penalties imposed [were]

reasonable.” Libertywood subsequently appealed the ALJ’s 

decision to the DAB, which affirmed the ALJ’s decision in its 

entirety. Libertywood’s appeal to this Court followed. 
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II.

Libertywood raises three issues in its appeal: (1) whether 

there is substantial evidence to support the Secretary’s final 

determination that it was not in substantial compliance with 42 

C.F.R. § 483.25(h); (2) whether the Secretary’s finding of 

immediate jeopardy is clearly erroneous; and (3) whether there 

was any basis for the duration of the per diem penalty after 

Resident 2 was transferred from its facility. Although 

Libertywood’s Statement of Facts also incorporates a great deal 

of argument, we will address only those claims contained in the 

argument section of its brief. See Fed. R. App. P. 28(a)(9)(A)

(requiring the argument section of the opening brief to contain 

the “appellant’s contentions and the reasons for them.”)

Pursuant to 42 U.S.C. § 1320a-7a(e), “[t]he findings of the 

Secretary with respect to questions of fact, if supported by 

substantial evidence on the record considered as a whole, shall 

be conclusive.” Substantial evidence is “such relevant evidence 

as a reasonable mind might accept as adequate to support a 

conclusion.” Richardson v. Perales, 402 U.S. 389, 401 (1971) 

(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938))

(internal quotations omitted). “It consists of more than a mere 

scintilla of evidence but may be somewhat less than a 

preponderance.” Shively v. Heckler, 739 F.2d 987, 989 (4th Cir. 
8

1984) (quoting Laws v. Celebrezze, 368 F.2d 640, 642 (4th Cir. 

1966)). 

We will overturn an agency’s conclusions in a case such as 

this only when we find those conclusions to be unreasonable. 

See Evans v. Sullivan, 928 F.2d 109, 111 (4th Cir. 1991). The 

existence of judicial review of agency findings, however, does 

not mean that “a court may displace [an agency’s] choice between 

two fairly conflicting views, even though the court would 

justifiably have made a different choice had the matter been 

before it de novo.” Universal Camera Corp. v. NLRB, 340 U.S. 

474, 488 (1951).

A.

Libertywood contends the Secretary’s determination that it

was not in substantial compliance with 42 C.F.R. § 483.25(h) is 

unsupported by substantial evidence. Pursuant to 42 C.F.R. 

§ 483.25(h), a skilled nursing home facility participating in 

the Medicare program must ensure that “[e]ach resident receives 

adequate supervision and assistance devices to prevent 

accidents.” To determine whether a nursing home complied with 

§ 483.25(h)(2), we “look[] at two factors: whether a risk of an 

‘accident’ was foreseeable and whether the facility’s response 

was adequate under the circumstances.” Liberty Commons Nursing 
9

& Rehab Ctr.—Alamance v. Leavitt, 285 F. App’x 37, 44 (4th Cir. 

2008). 

After the first incident on September 6, 2009, when 

“[Resident 2] rolled [his wheelchair] beside [Resident 5] and 

began fondling her left breast[,]” the nurse moved him and wrote 

that she would monitor him. But just one hour and fifteen 

minutes later, another resident reported that “[Resident 2] 

returned to [Resident 5] and put his hand under a blanket on her 

lap. She stated [that] he was feeling [her] all over, around 

her diaper.” On this date, it became foreseeable that Resident 

2 posed a threat to the health and safety of its female 

residents.

As noted above, there is a September 9, 2009, entry in 

Resident 2’s Care Plan, which states that he “ha[d] become 

increasingly aggressive in seeking sexual relationships with 

others.” The Care Plan lists fourteen methods to address the 

problem. But, from our review of the record, it appears that 

this plan generally was not followed. Instead, as the ALJ

observed, it appears that between September 9, 2009, and October 

17, 2009, Libertywood’s staff’s interventions consisted simply 

of separating Resident 2 from the resident he had just 

inappropriately touched and instructing him not to touch her 

again. The staff also occasionally conducted checks every 

fifteen minutes on Resident 2. As to encouraging Resident 2’s 
10

participation in activities, he spent just thirty minutes a day 

in occupational therapy. 

After the October 17, 2009, incident when Resident 2 went 

into Resident 1’s room and “started fondling [her] on the breast 

and touching [her] on the vagina,” Libertywood began one-to-one 

monitoring from 9 AM to 8 PM, and checks every fifteen minutes 

at all other times. On November 13, 2009, however, at 7:50 AM, 

Resident 2 “[r]olled over to [a female resident] and had his 

hand up her shirt touching her [b]reast.” Immediately 

thereafter, Libertywood changed the one-to-one schedule to 

begin at 7 AM and end at 8 PM.

We are of the firm opinion that there is substantial 

evidence to support the Secretary’s final determination that, 

after the first inappropriate touching on September 6, 2009, the 

incidents that followed were foreseeable but Libertywood’s 

responses were inadequate. It was not until the October 17, 

2009, incident that Libertywood instituted any meaningful 

measures to control Resident 2’s inappropriate sexual behavior,

when it commenced one-to-one supervision. But, even then, it 

failed to require the one-to-one supervision at all times when 

Resident 2 was out of bed, although it was foreseeable that he 

might inappropriately touch the female residents without such 

supervision. In fact, he did just that on November 13, 2009.
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Although Libertywood did not have the benefit of hindsight, 

it was required by the regulations to exercise insight and 

foresight. Unfortunately, however, there is little evidence 

that it exercised either. Therefore, because the risk that 

Resident 2 would continue his inappropriate behavior was 

foreseeable, yet Libertywood’s response was woefully inadequate 

under the circumstances, we hold that the Secretary’s 

determination that Libertywood was not in substantial compliance 

with 42 C.F.R. § 483.25(h) is supported by substantial evidence.

B.

Libertywood also argues that CMS’s “immediate jeopardy”

determination is clearly erroneous. Pursuant to 42 C.F.R. 

§ 488.301, “[i]mmediate jeopardy means a situation in which the 

provider’s noncompliance with one or more requirements of 

participation has caused, or is likely to cause, serious injury, 

harm, impairment, or death to a resident.” In civil money 

penalty cases “CMS’s determination as to the level of 

noncompliance of a[] [skilled nursing facility] or [nursing 

facility] must be upheld unless it is clearly erroneous.” 42 

C.F.R. § 498.60(c)(2). A finding is clearly erroneous when, 

although there is evidence to support the finding, the reviewing 

court considering all the evidence is “left with a definite and 

firm conviction that a mistake has been committed.” Evergreen 
12

Int’l, S.A. v. Norfolk Dredging Co., 531 F.3d 302, 308 (4th Cir.

2008).

Libertywood maintains that it was Resident 2’s behavior, 

and not Libertywood’s noncompliance with the applicable 

regulations, that caused any harm that might have occurred to 

the female residents. But, it was Libertywood’s noncompliance 

with the governing regulations that made Resident 2’s 

inappropriate behavior possible. Had Libertywood instituted 

adequate measures to control Resident 2’s inappropriate sexual 

behavior, which was foreseeable, the behavior would not have 

continued.

Although it is true that only Resident 1 made a formal 

complaint about Resident 2’s inappropriate behavior, stating 

that “she did not feel safe [at Libertywood],” Libertywood 

failed to conduct an investigation as to the degree of harm 

suffered by the other female residents whom Resident 2 

inappropriately touched. As the ALJ noted, “[Libertywood] can 

hardly be allowed to benefit from such a disregard for the 

welfare of its vulnerable residents.” Consequently, we decline 

to hold that the Secretary’s determination of immediate jeopardy 

is clearly erroneous. 
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C.

Finally, Libertywood maintains that there was no basis for 

the duration of the per diem penalty that CMS assessed after 

Resident 2 was transferred from Libertywood. Libertywood bears 

the burden of proving that the civil monetary penalty was 

unreasonable. See Beverly Healthcare Lumberton v. Leavitt, 338 

F. App’x 307, 316 (4th Cir. 2009).

As a preliminary matter, Libertywood asserts that the 

Secretary erred in placing on it the ultimate burden of 

persuasion to establish that it was in substantial compliance 

with the applicable regulations after Resident 2 was discharged. 

Specifically, Libertywood complains that instead of placing the 

ultimate burden of persuasion on it to establish that it is in 

compliance, see Hillman Rehab. Ctr. v. Health Care Fin. Admin., 

DAB No. 1611 (1997), the burden should be on the Secretary to 

demonstrate that the facility is in noncompliance with the 

governing requirements. We decline to reach this issue. Simply 

stated, Hillman is applicable “only if evidence [is] in 

equipoise.” Harmony Court v. Leavitt, 188 F. App’x 438, 440 

(6th Cir. 2006). As we discuss herein, there is substantial 

evidence to support the Secretary’s finding of noncompliance in 

this case. 

Again, pursuant to 42 C.F.R. § 483.25(h)(2), a skilled 

nursing home facility participating in the Medicare program must 
14

ensure that “[e]ach resident receives adequate supervision and 

assistance devices to prevent accidents.” Failure to do so may 

result in a civil monetary penalty, which CMS may impose for 

each day that the facility fails to be in substantial compliance 

with the applicable regulatory requirements. See 42 C.F.R. 

§§ 488.430(a), 488.440(b). There are two ranges of these 

penalties, depending on the severity of noncompliance. With 

a finding of immediate jeopardy, CMS may impose a daily civil

monetary penalty from $3,050-$10,000. Id. at

§ 488.438(a)(1)(i). When there is no immediate jeopardy, but 

the deficiencies have either caused actual harm or have the 

potential for more than minimum harm, the daily civil monetary 

penalty can range from $50-$3,000. Id. at § 488.438(a)(1)(ii). 

As noted earlier, CMS imposed a civil monetary penalty in 

the amount of $3,700 per day beginning on September 6, 2009, and 

continuing until November 17, 2009. CMS also levied a $100 per 

day civil monetary penalty from November 18, 2009, until 

December 11, 2009. Libertywood argues that there is no basis 

for the civil monetary penalty that CMS imposed for November 18, 

2009, to December 11, 2009.

“[O]nce a facility has been found to be out of substantial 

compliance, it remains so until it affirmatively demonstrates 

that it has achieved substantial compliance once again.” 

Premier Living & Rehab Ctr. v. Ctrs. for Medicare & Medicaid 
15

Servs., DAB 2146, at 23 (2008). To establish that a facility 

has returned to substantial compliance with the governing 

regulations, a resurvey is generally required. See 42 C.F.R. 

§ 488.454(a)(1). Although 42 C.F.R. 488.454(e) provides that a 

facility can demonstrate that it is in substantial compliance at 

an earlier date than a resurvey, to do so it must “supply 

documentation acceptable to CMS or the State survey agency that 

it was in substantial compliance and was capable of remaining in 

substantial compliance.” Id. at § 488.454(e).

Here, the resurvey occurred on December 29, 2009, and found 

that Libertywood was “in substantial compliance [with the 

participation requirements] as of December 11, 2009.” 

Libertywood failed to provide any acceptable documentation that 

it was in substantial compliance before that date. As such, we 

are unable to say that it was unreasonable for CMS to assess the 

per diem penalty after Resident 2 was transferred from 

Libertywood. 

III.

When the record is considered as a whole, there is 

substantial evidence to support the Secretary’s final 

determination that Libertywood was not in substantial compliance 

with the Medicare program requirements, its deficiencies posed 

immediate jeopardy to its residents’ health and safety, and the 
16

duration of the penalties imposed were reasonable. Accordingly, 

we affirm the Secretary’s final determination on these issues.

AFFIRMED