In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 07-2240

RANDALL L. WOODRUFF, as Bankruptcy Trustee

for LEGACY HEALTHCARE, INC.,

Plaintiff-Appellant,

v.

JO ANN MASON, GERALD COLEMAN, SUZANNE HORNSTEIN,

CLARA MCGEE, KAREN POWERS, ROBERT STARK, MARGARET

ELLIS, AVONA CONNELL and KAREN DAVIS,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division.

No. 00 C 306—Larry J. McKinney, Judge.

____________

ARGUED FEBRUARY 13, 2008—DECIDED SEPTEMBER 5, 2008

____________

Before CUDAHY, POSNER and EVANS, Circuit Judges.

CUDAHY, Circuit Judge. Legacy Healthcare, Inc. (Legacy)

and its predecessor, Community Care Centers, Inc. (Community), operated a number of long-term care facilities

in Indiana. On February 18, 2000, Legacy brought this

action under 42 U.S.C. § 1983, alleging that employees of
2 No. 07-2240

On August 12, 2003, Randall L. Woodruff, the trustee in 1

Legacy’s bankruptcy proceeding, was substituted as the

real party in interest. 

the Indiana Family and Social Services Administration

(FSSA) and the Indiana State Department of Health (ISDH)

violated its rights under the First Amendment and Fourteenth Amendment. The FSSA administers Indiana’s 1

Medicaid program through its Office of Medicaid Policy

and Planning (OMPP); the ISDH is the state agency

authorized to inspect care facilities and determine their

compliance with federal Medicaid regulations. Legacy

believes that FSSA employees developed an antipathy

toward Legacy and Community after years of contentious

litigation between the parties. It claims that the FSSA

convinced the ISDH to use its regulatory authority to

launch a predatory enforcement campaign aimed at

driving Legacy out of business. According to Legacy, this

predatory enforcement constituted First Amendment

retaliation and violated the Equal Protection Clause. The

district court granted summary judgment in favor of

Defendants on all counts. We now affirm.

I.

The record in this case is voluminous. Any reader

interested in a complete exposition of the facts is referred

to the district court’s lengthy background discussion. See

Woodruff v. Wilson, 484 F.Supp.2d 876, 880-925 (S.D. Ind.

2007). We recite only the facts that are necessary to our

decision, and we read these facts, wherever possible, in

the light most favorable to Legacy.
No. 07-2240 3

The IDPW was the predecessor to the FSSA, which was 2

created in 1991. 

Legacy and Community have been locked in litigation

with the FSSA for years. In 1988, Community brought a

challenge to state Medicaid reimbursement rules in

Indiana state court. Community convinced the Delaware

County Superior Court to issue an injunction requiring

the Indiana Department of Public Welfare (IDPW) to pay 2

Community a higher reimbursement rate during the

pendency of the litigation. The case was then moved to

Blackford County Superior Court, which ruled in favor

of Community on the merits. The IDPW appealed, and

the case was consolidated with a large class action suit

that challenged the same reimbursement rules. See

Indiana State Bd. of Pub. Welfare v. Tioga Pines Living Center,

Inc., 622 N.E.2d 935 (Ind. 1993). The cases were transferred directly to the Indiana Supreme Court, which

reversed the lower courts and upheld the regulations. Id.

Karen Davis, an attorney for the FSSA who had been

involved in the litigation since 1990, went back to

Blackford County court to recoup the millions of dollars

paid to Community under the erroneous injunction. The

FSSA argued that Community had been unjustly enriched

by the injunction and had been misusing Medicaid funds.

Community argued that it had not been unjustly enriched

because it spent all of the money on patient care. In the

end, the FSSA’s recoupment attempts were unsuccessful.

Community also sued the IDPW in federal court over

Medicaid reimbursement for its Hamilton Heights facility

(later known as New Horizon). Hamilton Heights was a
4 No. 07-2240

skilled nursing facility (SNF) that was in the process of

being converted into an intermediate care facility for the

mentally retarded (ICF/MR). An ICF/MR is required to

provide a higher level of care than an SNF and is therefore

reimbursed at a higher rate. Community sued the IDPW,

arguing that it should be paid the higher ICF/MR reimbursement rate while it underwent its conversion. Community again obtained a preliminary injunction and the

IDPW again paid a substantial amount of additional

reimbursement ($1,783,480.20). The district court also ruled

for Community on the merits, but we reversed. See Lett v.

Magnant, 965 F.2d 251 (7th Cir. 1992). The FSSA attempted

to recoup some of excess reimbursement paid to Hamilton

Heights by withholding payment for current services.

Community was able to avoid the recoupment attempts, in

part by arguing that the recoupment would cause imminent business failure. Family and Social Servs. Admin. v.

Cmty. Care Centers, Inc., 641 N.E.2d 1012 (Ind. Ct. App.

1994). The FSSA’s subsequent attempts to recoup the

money also failed. See Cmty. Care Centers, Inc. v. Sullivan,

701 N.E.2d 1234 (Ind. Ct. App. 1998).

Legacy also litigated with state agencies over whether

the FSSA was required to recognize Legacy as the owner

of Community facilities after Douglas Bradburn, Legacy’s

President, acquired all of his parents’ business assets in

October 1993. The FSSA eventually entered into a joint

stipulation with Legacy, settling the issue. Davis allegedly

became “visibly angry” when she learned of this

result, presumably because the transfer of the business

operations to Legacy prevented the ISDH from recouping funds by automatically deducting them from

payments for current services.
No. 07-2240 5

3

Suzanne Hornstein was the Division Director of Long Term

Care at the ISDH. Coleman was the Director of Risk Management for the Regulatory Services of the ISDH, but assisted as

counsel on the 1996 licensure action against North Vernon.

Mason was employed as a Deputy Attorney General from

July 1995 to December 1997, when she became the Director of

Legal Affairs at the Indiana State Department of Health,

where she remained until December 2000.

From January 1, 1995 to March 8, 2004, ISDH cited 405 4

instances of substandard quality of care, 9 of which were at

(continued...)

In 1996, ISDH initiated proceedings against Legacy’s

North Vernon facility for decertification. During administrative proceedings seeking the decertification of North

Vernon, Legacy discovered that on November 6, 1996,

Beverly Craig of the ISDH had called a meeting, which

included officials from the FSSA and the Attorney General’s office, regarding the state of health care at Legacy

facilities. The attendees included Davis, Jo Anne Mason,

Suzanne Hornstein, Gerald Coleman and others. Craig 3

later testified that she called the meeting because she

was concerned that Legacy was failing to provide adequate care at a number of different facilities.

Legacy claims that it had a perfect record of compliance

with state regulations over the first thirty-two years of

its operation, easily passing inspections and enjoying a

good reputation with the public. Following the November

6, 1996 meeting, however, there was a “deluge” of allegedly predatory enforcement actions: 12 jeopardy charges,

14 licensure actions and 14 decertifications over the next

three years. Legacy believes that the subsequent enforce4
6 No. 07-2240

(...continued) 4

Legacy facilities. During the same period, ISDH found 36

instances of immediate jeopardy at ICR/MR facilities, two

of which were at New Horizon. From 1996 to March 2004, ISDH

filed 209 license revocation actions, sixteen of which were

against Legacy facilities. It also issued 449 citations, 17 to Legacy

facilities.

ment campaign, which allegedly included the manipulation of survey findings, was designed to drive Legacy out

of business. Legacy points to three specific examples:

(1) the withholding of North Vernon’s copy of its license;

(2) the manipulation of 180-day cycles; and (3) the decertification of New Horizon on the basis of a single

standard. We will explain these actions briefly.

The dispute over the decertification of North Vernon was

eventually completed in April 1997. ISDH conducted a

number of recertification surveys over the next few

months; Legacy was then recertified. But Legacy never

received the physical copy of its license. Despite numerous

calls to ISDH, Legacy was unable to obtain a copy of its

license. On March 17, 1998, Legacy received its annual

renewal application; the application was processed but,

again, no copy of the license was issued. Because Legacy

never received the license, the facility was never certified

for Medicare. At a meeting in 1998 between Legacy, the

ISDH and an official from the Health Care Financing

Administration (HCFA), Hornstein stated that the license

was not delivered because it was “in litigation.” Years

later, she testified that she was not aware that North

Vernon had not been given its license, explaining that

she assumed that it had been.
No. 07-2240 7

The ISDH is responsible for conducting surveys at longterm care facilities. When a survey reveals a deficiency,

a 180-day cycle begins during which the facility must

correct the deficiency or face decertification: if the deficiency is corrected, the cycle ends; if the deficiency is not

corrected, additional surveys are undertaken and the 180-

day cycle continues to run. Legacy claims that Hornstein

broadened the scope of surveys at Legacy facilities to

wrongfully keep it out of compliance. Specifically, Legacy

asserts that the 180-day cycle was improperly applied at

Legacy’s Portland East facility in 1997, 1998 and 1999, at

Columbus in 1998 and 1999, at New Castle in 1998, at

Portland West in 1998 and at North Vernon in 1998.

Legacy also alleges that Hornstein and Coleman improperly decertified the New Horizon facility in 1998 for its

failure to comply with a single “standard of participation.”

In early 1998, Hornstein and Coleman issued a notice

of decertification to New Horizon; the decertification

notice was based upon a recently conducted survey of the

facility which had found three deficiencies involving

“standards of participation.” Two of these deficiencies

were apparently corrected, but the decertification action

proceeded nonetheless. Legacy believes that this was

improper. Legacy claims that its “comprehensive study” of

the fifteen ICF/MRs operating in Indiana revealed that

eight other facilities had been certified even though they

had standard-level deficiencies.

Legacy filed its complaint for injunctive relief and

damages on February 18, 2000. The district court denied its

motion for a preliminary injunction on March 6, 2000.

Legacy filed its First Amended Complaint on April 17,
8 No. 07-2240

Legacy does raise a third claim—that the Defendants entered 5

into a civil conspiracy to violate its constitutional rights. This

claim is predicated on the same facts as the other two claims,

and it rises and falls with them.

2000. The defendants filed their motion for summary

judgment on August 16, 2004. On April 27, 2007, the

district court granted the defendants’ motion for summary judgment. This appeal follows.

II.

We review a grant of summary judgment de novo. See

Wyninger v. New Venture Gear, Inc., 361 F.3d 965, 974 (7th

Cir. 2004). Summary judgment is appropriate only if “there

is no genuine issue as to any material fact and that the

moving party is entitled to judgment as a matter of law.”

FED. R. CIV. P. 56(c). We construe facts in the light most

favorable to the non-moving party but “we are not required to draw every conceivable inference from the

record.” Bell v. Duperrault, 367 F.3d 703, 707 (7th Cir. 2004)

(quoting McCoy v. Harrison, 341 F.3d 600, 604 (7th Cir.

2003)). Instead, we draw only reasonable inferences. See

McDonald v. Village of Winnetka, 371 F.3d 992, 1001 (7th

Cir. 2004).

On appeal, Legacy argues that it produced enough

evidence to create a material issue of fact as to both its

First Amendment retaliation claim and its equal protection claim. At oral argument, counsel for Legacy

5

conceded, wisely we think, that the “heart” of the First
No. 07-2240 9

In their brief on appeal, the Plaintiffs dropped any First 6

Amendment retaliation claims against anyone other than

Davis, Hornstein, Coleman and Mason. 

The only defendants to the equal protection claim are 7

Hornstein, Coleman and McGee. Thus, it appears that Legacy

has abandoned all claims against Powers, Stark, Ellis and

Connell.

Amendment retaliation claim was the November 6, 1996

meeting. Legacy claims that it was at this “clandestine

summit meeting” that Davis and Mason, who worked

at the FSSA, persuaded Hornstein and Coleman of the

ISDH to launch a predatory enforcement campaign

against Legacy in retaliation for Legacy’s exercise of its

First Amendment right to petition the courts. Even if the 6

ISDH’s predatory enforcement campaign was not motivated by a spirit of retaliation, Legacy claims that the

ISDH’s intentional manipulation of regulatory rules was

so arbitrary and irrational that it violated the Equal

Protection Clause.7

Ultimately, both of these arguments fail. Legacy’s First

Amendment claim fails because Legacy has not established

that the FSSA was actually aggravated by the reimbursement litigation, or that the FSSA was the guiding hand

behind the ISDH’s enforcement actions. Legacy’s equal

protection claim fails because it has failed to indicate

similarly situated facilities to which it can be compared

and because it has failed to sufficiently state the factual

basis of its claims. We will first discuss the First Amendment claim; we then discuss the equal protection claim,
10 No. 07-2240

We note that Legacy includes a lot of information in its 8

statement of facts that it fails to develop in the argument section

of its brief. It is not enough “merely to refer generally to these

actions in [the] statement of facts.” Ajayi v. Aramark Business

Services, Inc., 336 F.3d 520, 529 (7th Cir. 2003). Legacy must

“raise [the issue] in the argument section of [its] brief, and

support [its] argument with pertinent legal authority.” Id.

which we divide in three parts to reflect Legacy’s three

main arguments on appeal.8

III. 

The First Amendment right to petition the government for the redress of grievances extends to the courts in

general and applies to litigation in particular. See California

Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510,

92 S. Ct. 609, 30 L. Ed.2d 642 (1972); NAACP v. Button, 371

U.S. 415, 429-30, 83 S. Ct. 328, 9 L. Ed.2d 405 (1963). Legacy’s numerous challenges to the state regulatory scheme

throughout the 1980s and 1990s would, therefore, appear

to be protected activities. See, e.g., Powell v. Alexander, 391

F.3d 1, 20 (1st Cir. 2004). Legacy believes that the FSSA

developed a growing hostility toward it as a result of the

reimbursement litigation. Not only was Legacy was “a

thorn” in the FSSA’s side, the FSSA was also unable to

recoup the millions of dollars paid to Legacy under

erroneous injunctions. According to Legacy, the FSSA

turned to the ISDH and persuaded it to drive Legacy out

of business.
No. 07-2240 11

To establish a prima facie case of First Amendment

retaliation, Legacy must establish that (1) it engaged in

activity protected by the First Amendment, (2) it suffered

a deprivation that would likely deter First Amendment

activity in the future, and (3) the First Amendment

activity was a “at least a motivating factor” in the Defendants’ decision to take the retaliatory action. Massey v.

Johnson, 457 F.3d 711, 716 (7th Cir. 2006). The defendants

concede that Legacy’s challenges to the state regulatory

scheme constituted protected activity under the First

Amendment. Neither the parties nor the district court

discuss the second element in detail. We need not dwell

on it here. Instead we focus, as the parties do, on the

third element.

The third element of a First Amendment retaliation

claim is the element of causation. Legacy must show “a

causal link between the protected act and the alleged

retaliation.” Roger Whitmore’s Automotive Servs., Inc. v. Lake

County, Illinois, 424 F.3d 659, 669 (7th Cir. 2005); accord

Spiegla v. Hull, 371 F.3d 928, 941 (7th Cir. 2004). Legacy

does not need to show that its litigation history was the

only factor that motivated the defendants but it must

show that it was “a motivating factor.” Spiegla, 371 F.3d at

942. The evidence used to establish this element may

be either direct or circumstantial. Id.

It becomes immediately clear that Legacy’s causation

theory will not be straightforward. The retaliatory action

allegedly suffered by Legacy was the predatory enforcement campaign undertaken by the ISDH. The protected

litigation activity, however, involved Legacy and the
12 No. 07-2240

FSSA. To establish a retaliatory motive, therefore, Legacy

must show that the FSSA’s antagonism toward Legacy

was a motivating factor in the ISDH’s predatory enforcement campaign. Legacy has no evidence that ISDH officials

were distressed in the slightest by Legacy’s challenges

to the reimbursement rates. Similarly, Legacy has almost

no evidence that FSSA officials participated in the

alleged predatory enforcement campaign. Thus, Legacy

must show that the FSSA convinced the ISDH to retaliate

against Legacy on its behalf. To do this, Legacy must first

establish the FSSA officials wanted to retaliate against

Legacy for the reimbursement litigation with Legacy.

Legacy must then show that the FSSA communicated

its hostility to the ISDH.

Legacy has a difficult time establishing that the FSSA

developed any hostility toward it at all. Legacy’s best

argument that the agency had become hostile toward it

is the fact that the FSSA failed to recoup millions of

dollars paid to Legacy under the injunctions. While this

fact provides important context for Legacy’s story, it is

not sufficient as a basis for the ascription of a retaliatory

motive to the state agency. It is not enough simply to

show that the state agency could have been frustrated

by the inability to recoup the money; there must be some

persuasive evidence that suggests that the agency was

actually hostile.

It bears repeating here that “[n]ursing homes are a

highly regulated industry, and some tension between

operators of homes and regulators is to be expected, as

are occasional adversarial proceedings.” Blue v. Koren,
No. 07-2240 13

72 F.3d 1075, 1084-85 (2d Cir. 1995). If the natural tensions

that result from adversarial proceedings and regulatory

enforcement actions sufficed to establish evidence of

retaliatory motive, then the regulatory scheme could very

well be undermined. State enforcement agencies have

every right to vigorously enforce the law. Legacy’s evidence must suggest something beyond the typical “antagonism that arises between a regulator and a regulated (a

relationship easily inflamed by difficult personalities).”

Beechwood Restorative Care Center v. Leeds, 436 F.3d 147, 154

(2d Cir. 2006). It does not. The sole piece of concrete

evidence offered by Legacy is Bradburn’s observation

that Davis became “visibly angry” when she learned

that the ISDH had entered into a joint stipulation with

Legacy. Davis’ alleged outburst of anger, however, was

an isolated incident; it does not reflect any sustained

hostility on the part of the ISDH.

Even if Legacy has no direct evidence of hostility,

Legacy believes that the circumstances surrounding the

November 6, 1996 meeting of FSSA and ISDH officials

were so unusual that one could reasonably infer that

something malevolent was afoot. (We note here that

Legacy has no evidence that the officials who attended the

November 6, 1996 meeting actually discussed a predatory

enforcement campaign against Legacy; their argument is

entirely circumstantial.) First of all, Legacy argues that

there was no reason that FSSA officials should have been

at the meeting. More importantly, Legacy stressed that

the meeting provided Davis and Mason an opportunity

to convince the ISDH to launch a predatory enforcement

campaign and to discuss the details of that campaign.
14 No. 07-2240

Legacy also notes that a “deluge” of violations and enforcement actions immediately followed.

Legacy’s theory is severely undermined by the fact that

it was an ISDH official, Beverly Craig, who called the

meeting—not Davis. Craig testified that she called the

meeting because North Vernon was already in decertification proceedings and because she had serious concerns about the health of patients in two Legacy facilities.

The district judge below found that there was

“uncontroverted evidence” that Legacy’s North Vernon

facility was having difficulties meeting government

standards of care.

Legacy seems to believe that the very fact that other

agencies were present at the meeting provides reason to

be suspicious. It points out that the FSSA has no role in

the ISHA’s enforcement of quality of care regulations

and the ISDH has no role in the FSSA’s administration

of the Medicaid reimbursement program. But there is

nothing wrong with state agencies working together to

solve problems, and it is clear that each of the agencies

present at the meeting had a legitimate interest in the case.

Specifically, Craig explained that FSSA officials were

present because there was a possibility that the facility was

being reimbursed for services it did not provide, which

would obviously be of interest to the FSSA. The FSSA was

also present because it would have to terminate payments in the event of any decertification. Craig explained

that Mason, who worked at the time in the Attorney

General’s office, was present because there would likely

be issues with enforcing any decertification actions.

Legacy does not address any of these points.
No. 07-2240 15

Legacy’s resort to the “adverse inference” rule, see, e.g., P.R. 9

Mallory & Co. v. NLRB, 400 F.2d 956 (7th Cir. 1968), is unavailing.

Instead, Legacy argues that the Defendants’ attempt to

suppress evidence of the meeting reveals that there was

something to hide. Legacy points to the Defendants’ initial

reluctance to answer questions about the meeting, the

Defendants’ inability to remember details of the meeting

and a false answer to an interrogatory filed by Coleman

that denied that the meeting took place. The Defendants’

reluctance to discuss the meeting is easily explained by

the fact that Legacy’s inquiries into the meeting were

made during its administrative appeal of the ISDH’s

decertification action at North Vernon. The parties were

in an adversarial relationship at the time and, when

Legacy pressed for deposition testimony, counsel for

ISDH raised an objection based on attorney-client privilege.

Craig and Hornstein did end up testifying about the

meeting. Legacy also finds it incredible that the participants later professed that they did not remember the

details of the meeting. Legacy is here referring to deposition testimony taken in 2006—ten years after the alleged

meeting. Lapses of memory are to be expected when

that much time passes.9

Legacy’s best evidence is that, during the administrative

proceedings regarding North Vernon’s decertification,

Coleman signed a false interrogatory that denied that

the meeting had taken place. Just ten days after the meeting took place, Legacy asked whether the FSSA and ISDH

had contacted each other regarding North Vernon.
16 No. 07-2240

Coleman answered, “Not to our knowledge.” When

Hornstein was asked at her deposition whether this

was true, she conferred with Coleman, who admitted it

to be an “error.” This evidence is certainly not to be

scoffed at. But given the adversarial posture of the

inquiry, the subsequent correction and Legacy’s failure

to prove so many other aspects of its theory, we do not

believe that this mistake alone can establish a retaliatory

motive. Without a retaliatory motive, the First Amendment claim fails.

IV.

Even if Legacy cannot show that the ISDH’s predatory

enforcement campaign was in retaliation for Legacy’s

exercise of its First Amendment rights, Legacy argues

that the campaign was so irrational and arbitrary that it

violated the Equal Protection Clause. This is, of course, the

well-known “class of one.” Village of Willowbrook v. Olech,

528 U.S. 562, 564 120 S. Ct. 1073, 145 L. Ed.2d 1060 (2000)

(per curiam). The Equal Protection Clause “secure[s] every

person within the State’s jurisdiction against intentional

and arbitrary discrimination, whether occasioned by

express terms of a statute or by its improper execution

through duly constituted agents.” Id. “The paradigmatic

‘class of one’ case . . . is one in which a public official, with

no conceivable basis for his action other than spite or

some other improper motive (improper because unrelated to his public duties), comes down hard on a hapless

private citizen.” Lauth v. McCollum, 424 F.3d 631, 633 (7th

Cir. 2005). Because “endless vistas of federal liability,” id.,
No. 07-2240 17

are opened when the misapplication of local law becomes

a “federal case,” McDonald, 371 F.3d at 1001, we have

said that it is “difficult” to succeed on a “class of one”

theory. Id.

To establish its “class of one” claim, Legacy must show

that “(1) it has intentionally been treated differently from

other similarly situated facilities; and (2) there is no

rational basis for the difference in treatment or the cause

of the differential treatment is a ‘totally illegitimate animus’ ” towards it. Maulding Dev., LLC v. City of Springfield,

Illinois, 453 F.3d 967, 970 (7th Cir. 2006) (emphasis added).

In keeping with the “difficult” burden of proof in “class

of one” cases, we have said that similarly situated facilities

necessary to establish the first element must be “prima

facie identical in all relevant aspects.” Purze v. Village of

Winthrop Harbor, 286 F.3d 452, 455 (7th Cir. 2002). Because

the first element is dispositive in this case, we need not

pursue the second.

Legacy’s argues that the following three actions by the

Defendants violated the Equal Protection Clause:

(A) decertifying New Horizon because it violated a

single “standard of participation”; (B) misapplying an

informal cycle-breaking rule when inspecting Legacy

facilities; and (C) refusing to give Legacy’s North Vernon

facility a copy of its license. As we shall explain, the first

instance fails because Legacy has failed to establish that

similarly situated facilities were treated differently. The

second instance, which is essentially an argument that

the ISDH’s unevenly applied an unwritten rule, fails

because Legacy has failed to define the rule with the
18 No. 07-2240

requisite level of clarity. The third instance is insufficient

because Legacy does not adequately establish the

factual basis for its claim. These three examples of violations of the Equal Protection Clause will be discussed

in turn.

A.

Legacy first alleges that the ISDH wrongfully attempted

to decertify New Horizon based on its failure to comply

with a single “standard of participation.” This action

was improper, Legacy argues, because federal regulations “provide for” certification of facilities with standardlevel deficiencies. Legacy also claims that this decertification was unprecedented in Indiana, which proves that

Legacy facilities were being treated differently. We

find, however, that Legacy has failed to show similarly

situated comparators.

Some background is in order. Federal regulations

require facilities participating in Medicare and Medicaid

programs to comply with federal safety regulations. See

42 U.S.C. § 1396a(a)(9),(33). The ISDH has the responsibility to inspect facilities and to enforce those regulations

in Indiana. See 42 C.F.R. § 442.109(a); IND. CODE § 16-28-12-

1. Not all safety violations, however, are treated in the

same way. For example, a violation of a “condition of

participation” is a much more serious affair than a violation of a “standard of participation.” In most situations,

the ISDH cannot certify a facility that fails to comply with

a “condition of participation.” See 42 C.F.R. § 442.101(d).

In contrast, the ISDH “may certify” a facility with
No. 07-2240 19

standard-level deficiencies, if certain conditions are met.

See 42 C.F.R. § 442.105. The facility must first submit a

“written plan for correcting the deficiencies,” and the ISDH

must approve that plan. See 42 C.F.R. § 442.105(b). The

ISDH must then ensure that the deficiencies at the

facility do not “jeopardize . . . health or safety” or “seriously limit the facility’s capacity to give adequate care.” See

42 C.F.R. § 442.105(a). If a facility has a history of deficiencies, the ISDH must determine whether the facility is

making good-faith efforts to comply, or whether it is

making the best use of its resources. See 42 C.F.R.

§§ 442.105(c), 442.105(d). If all those hurdles are

cleared, then the facility may be certified.

Legacy seems to believe that facilities with standardlevel deficiencies are certified as of right. As we have explained, this is not the case: facilities with such deficiencies

must satisfy additional criteria before being certified. In

fact, Legacy has not even established that it satisfied all

the necessary requirements. It does not mention whether

it submitted an acceptable plan of correction, whether

the ISDH made a determination about potential harm

to residents at New Horizon or Legacy’s ability to

provide services or whether its history of noncompliance

was a relevant factor. Similarly, Legacy has not presented

any details regarding the eight facilities that were

certified with standard-level deficiencies. These comparators must be identical to Legacy “in all relevant aspects.”

See Purze, 286 F.3d at 455. Without information

regarding the facts that are material to the ISDH’s decision

to certify, we cannot determine that Legacy was treated
20 No. 07-2240

Legacy also relies heavily on a decision from an administra- 10

tive law judge (ALJ), who found that a standard-level deficiency

was not grounds for terminating Legacy’s certification. It is

unclear whether the ALJ found that it was impermissible, in

principle, to decertify on a single standard-level deficiency

or whether the decertification action in question was not

supported by the record. This is irrelevant, however, because

this portion of the ALJ’s decision was overturned by the

Appeals Panel.

unfairly. The fact that the action at North Vernon was 10

unprecedented is insufficient. As Legacy itself notes, there

are only fifteen ICF/MR facilities in Indiana. It may well

be that the North Vernon facility was the first facility

with standard-level deficiencies to fail to satisfy the

additional requirements for certification. The decertification on a single standard, then, does not provide support for Legacy’s equal protection claim.

B.

Legacy also claims that the ISDH manipulated its “cyclebreaking methodology” in order to target Legacy

facilities for decertification. Legacy argues that the uneven

application of the cycle-breaking rules reveals the ISDH’s

intent to treat Legacy facilities differently. Unfortunately,

Legacy has provided us with precious little information

about these cycle-breaking rules. What we know of the

rules is gleaned from a fragment of Hornstein’s testimony

and from an email sent by an ISDH supervisor named

Mary Wassel. In the end, we find that Legacy has failed
No. 07-2240 21

to explain with sufficient clarity exactly how these rules

are properly applied. In short, Legacy cannot show that

a rule has been unevenly applied when the rule itself

is shrouded in mystery.

Before getting into cycle-breaking, we must know

something about the 180-day decertification cycle. The

ISDH is responsible for determining whether long-term

care facilities “substantially comply” with federal

Medicaid requirements. See 42 C.F.R. § 442.109(a). To

make this determination, the ISDH must perform inspections (or “surveys”) and may perform them “as

frequently as necessary to . . . determine whether a facility

complies with the participation requirements.” See 42

C.F.R. § 488.308. When a survey reveals deficiencies

that preclude a finding of substantial compliance, a

facility has six months to rectify the deficiency or face

mandatory decertification. See 42 C.F.R. § 488.412. When a

deficiency is found, the ISDH schedules a post-review

survey to determine whether the deficiency has

been corrected. If the deficiency has been corrected, the

180-day cycle ends. If the deficiency has not been corrected, the 180-day cycle continues to run and additional

surveys are conducted to monitor the facility’s progress

toward compliance. This is the “180-day decertification

cycle.”

Cycle-breaking deals with a narrower situation. It is, in

effect, a derivative of the 180-day decertification cycle. The

standard application of the 180-day cycle becomes complicated when a facility that is in the process of correcting

a previous deficiency is cited with a new, unrelated
22 No. 07-2240

deficiency. The question then arises whether the

facility has 180 days to rectify the new deficiency (that is,

whether the new deficiency starts its own separate cycle)

or whether the facility must rectify both the old and new

deficiencies within the 180-day cycle started by the original deficiency. This distinction is very important to the

facilities because if a separate cycle runs with each deficiency, they have more time to bring the facility in question into compliance.

Legacy argues that a separate cycle should begin when

the new deficiency has not been previously cited. Legacy

claims that Hornstein ordered surveyors at Legacy facilities

to improperly broaden the scope of follow-up surveys.

These surveys cited new deficiencies that were not cited

in the original surveys. Thus, even if Legacy had corrected the previous deficiencies, the new deficiencies

would keep them out of compliance.

Legacy has not pointed to any federal, state or agency

regulation in which this cycle-breaking rule is codified,

nor has Legacy provided us with any authoritative statement of the rule. Legacy also makes no attempt to derive

the cycle-breaking rule from federal regulations. Our

review of the federal regulations discloses no support

for this rule. The regulations state only that, as long as

the facility is not in “substantial compliance” for six

months straight, it must be decertified. See 42 C.F.R.

§ 488.412. It would not appear to matter, then, whether

it was an old deficiency or a new deficiency that was

keeping the facility out of compliance.

Federal regulations also suggest that there was nothing

“improper” about broadening the scope of the follow-up
No. 07-2240 23

Hornstein’s testimony was as follows: 11

Q: I think I can get the cycle thing straight with one more

question. Here it is. A facility has a survey and they are

out of compliance and [a] 180 day cycle starts.

A: Correct.

Q: The surveyors come back for the [post-review survey]

but there’s a new complaint and they go to handle

both of them in the same survey and the [post-survey

review] puts the facility back in compliance. The new

complaint, however, takes them out. Now, has the 180

day cycle that began with that first survey stopped

or not?

A: Depends.

(continued...)

surveys. The ISDH has the authority to conduct surveys

whenever that agency deems it necessary. See 42 C.F.R.

§ 488.308; 42 C.F.R. § 488.20(b)(1), (b)(4). Further, federal

regulations do not place any limitations on the scope

of post-review surveys; when such surveys are performed, the ISDH must determine whether the previous

deficiencies have been corrected and whether the facility

is in “substantial compliance” with federal requirements.

See 42 C.F.R. § 488.30.

It is, of course, possible that the ISDH has an

informal rule regarding cycle-breaking. Legacy believes

that it does, and it points to a small portion of Hornstein’s

testimony, in which she explains her belief that if the

new deficiency is different from the old one, two separate

cycles should run. Legacy also points to an email sent

11
24 No. 07-2240

(...continued) 11

Q: On what does it depend on?

A: On whether the deficiencies were cited in the second

survey are the same as the ones that are cited in the

[first] survey.

Q: What if they are different?

A: They should stop and start.

When Hornstein was pressed on the cycle-breaking issue, she

stated that she was not certain of the application of the rule

because she was not a surveyor.

The actions at Columbus in 1999 and North Vernon in 1998 12

do not bear upon cycle-breaking at all.

by an ISDH supervisor to a surveyor, in which the supervisor explains that “[t]he only time surveys should be

split is when the [post-review survey] and the [complaint

survey] are done together.” But even if Hornstein and

Wassel accurately described the proper application of

the cycle-breaking rule, it would not have applied in

Legacy’s case. In the hypotheticals offered by Hornstein

and Wassel, complaint surveys (a specific type of survey)

were distinguished from certification and post-review

surveys. In fact, Wassel explained that cycles are broken

only when post-review surveys and complaint surveys

are done at the same time. The surveys at Portland East

in 1997 and 1998, at Portland East in 1999, at Columbus

in 1998 and at New Castle in 1998 did not involve complaint surveys that needed to be separated from postreview surveys. While the Portland West survey did 12

involve a complaint investigation, the facility was found
No. 07-2240 25

to be in substantial compliance and the cycle was broken.

Thus, Legacy has no evidence that the cycle-breaking

rule, as explained by Hornstein and Wassel, would have

applied in these cases.

The other evidence of dissimilar treatment presented

by Legacy is anecdotal and unpersuasive. Legacy discusses

two facilities at which it claims the 180-day cycle was

properly applied. The first example is Whispering

Pines, where the ISDH apparently let the cycle run out

because it forgot to do a follow-up survey in time. At

Arbors, Bradburn himself said that he could not determine whether the 180-day cycle was ever closed; it is

clear, however, that the ISDH initiated an action to

revoke Arbor’s license. This evidence does nothing to

further Legacy’s case.

Despite the fact that it does not appear in any state

or federal regulation, we are willing to assume that the

ISDH did have an informal cycle-breaking rule. But that

rule, as Hornstein and Wassel explained, applies only

when complaint surveys are conducted alongside postreview surveys. The cycle-breaking rule does not apply

when the scope of a post-review survey is broadened (as

federal regulations clearly allow). Because the examples

cited by Legacy do not involve the situation to which

the rule was intended to apply, Legacy has not shown

that it has been treated unfairly.

C.

We turn now to Hornstein’s alleged failure to provide
26 No. 07-2240

As the district court noted, there is no evidence that Coleman 13

withheld or participated in the withholding of the license—he

was merely aware of it, and Legacy has not explained how

an awareness of the withholding makes him liable for an

equal protection violation. It was Hornstein’s responsibility to

send the license to Legacy.

Legacy argues that a “comprehensive review of all licensed

14

facilities in the state indicates that no other similarly situated

(i.e., licensed) facility was ever denied its physical license,” and

it also points to the testimony of Hornstein. Despite Legacy’s

claims, Hornstein never said that no other facility had ever

been denied a copy of its license, only that she was not aware

of one.

Legacy with a copy of New Horizon’s license. Legacy

13

needed a copy of the license to complete its Medicare

reimbursement application. Legacy claims that Hornstein

“refused” to hand over a copy of the license in an

attempt to sabotage Legacy’s ability to obtain Medicare

reimbursement. Legacy claims that no other licensed

facility in Indiana had ever been denied a copy of its

license in such a manner. We find, however, that Legacy

14

has failed to establish the factual basis of this claim.

Legacy claims that Hornstein withheld copies of its

New Horizon licenses in 1996, 1997, 1998 and 1999. New

Horizon was re-certified for Medicaid services, effective

July 7, 1997, and a state license was issued for the facility.

Legacy intended to use the state license to complete

its application for Medicare reimbursement. A copy of the

license, however, was never sent to Legacy. Legacy

might not even have realized that it needed a copy of the
No. 07-2240 27

On March 17, 1998, Legacy received a renewal application 15

from the ISDH. The application was processed but, again,

Legacy did not receive a copy of its license.

license until October 16, 1997, when Administar Federal,

the Medicare fiscal intermediary, asked Legacy to submit

one. Legacy claims that it contacted “various ISDH and

HCFA employees” about the license but it never specifies

whom, nor does it provide any proof of these requests.

More importantly, Legacy has not explained when—or

indeed if—it ever actually requested a copy of the license

from Hornstein. Legacy claims that it raised the issue in

a November 20, 1997 letter to Robert Spain, the program

director for the Health Care Financing Administration

(HCFA), but a review of that letter reveals otherwise. The 15

record reveals that Spain, whom Legacy trusted and

with whom it often communicated, was unaware of the

problem until the parties met on July 23, 1998. Indeed,

Legacy drafted a list of topics to be discussed with Spain

at that meeting but never mentioned the problem with

the physical delivery of the license.

Legacy does note, correctly, that the issue was raised

in the meeting with Spain, a meeting that Hornstein

attended. When Spain asked why Hornstein had not

provided a copy to Legacy, Hornstein said that she did not

send it because Legacy was “in litigation” over certification. It is unclear what happened next. In a follow-up

letter sent to Spain after the meeting, Legacy does not

mention the license and instead asks Spain to help ensure

that it receive fair inspections in the future.
28 No. 07-2240

Hornstein also claims that she would have done anything 16

to revoke the license because the North Vernon facility “could

not maintain compliance and could not take care of its residents.”

Because there was no constitutional violation in this case, we 17

do not reach the issue of qualified immunity or absolute

immunity. See Hildebrandt v. Illinois Dep’t of Natural Resources,

347 F.3d 1014, 1036 (7th Cir. 2003).

We are not sure what to make of this evidence. It is

true that Hornstein seemed to have equivocated in her

explanations of why she did not send the license. She 16

first claimed that the license had not been issued because

of litigation, and then she claimed that she assumed the

license had issued. Her explanations may be explained by

the fact that she was referring, in the first instance, to

the failure to send the 1996 license and, in the second

instance, to the 1999 licenses. The record is not clear

on this point.

In the end, we find that Legacy’s claim suffers from a

fatal lack of detail. Legacy has not established that

Hornstein was the only one who could have sent it a

copy of the license, nor has it produced any document to

show that it ever requested the license from Hornstein.

Hornstein may have made a mistake in not issuing the

license or may have mistakenly thought that she could

have withheld the license. But this evidence, alone, is not

enough to draw the grand inference that Hornstein violated Legacy’s rights under the Equal Protection Clause.

Its claim therefore fails.17
No. 07-2240 29

VI.

For the foregoing reasons, the decision of the district

court is AFFIRMED.

POSNER, Circuit Judge, concurring. In a series of cases

in the 1960s, the Supreme Court held that the First Amendment, particularly the clauses creating a right to petition for redress of grievances and an (implied) right

to associate for the advancement of First Amendment

interests, forbids the government to impose unnecessary

restrictions on an association’s assisting its members to

litigate claims. NAACP v. Button, 371 U.S. 415 (1963);

Brotherhood of Railroad Trainmen v. Virginia ex rel. Virginia

State Bar, 377 U.S. 1 (1964); United Mine Workers, District 12

v. Illinois State Bar Association, 389 U.S. 217 (1967). From

those cases, coupled with the rule that government retaliation for the exercise of First Amendment rights is itself

a violation of the First Amendment, e.g., Wilkie v. Robbins,

127 S. Ct. 2588, 2600-01 (2007); Abrams v. Walker, 307 F.3d

650, 654 (7th Cir. 2002), overruled on other grounds by

Spiegler v. Hall, 371 F.3d 928, 941-42 (7th Cir. 2004); Suarez

Corp. Industries v. McGraw, 202 F.3d 676, 685 (4th Cir.

2000), it might appear to follow that if government

officials retaliate against someone for bringing a lawsuit, as

charged in this case, they have violated the First Amend-
30 No. 07-2240

ment. And so the parties and the district judge have

assumed. I have my doubts, although I do not criticize

the majority opinion (which I join) for deciding the case

on the basis of the assumption.

The Button case was “cause” litigation—the NAACP

was using constitutional litigation as an alternative to

legislative reform of discriminatory practices; it thus

was petitioning for redress of grievances, rather than

suing to enforce a private right. The other cases that

I have cited involved challenges to state bar regulations

that restricted access to the courts, as by preventing a

union from providing a lawyer for a member of the union

who might not be able to afford to hire one; and so they

merge with cases like Bounds v. Smith, 430 U.S. 817 (1977),

that create a broad right, based on various constitutional

provisions, of access to the courts.

This case is different. The defendants did nothing to

obstruct Legacy Healthcare’s access to the Indiana courts

to litigate its Medicaid reimbursement claims against the

state. Of course, if a defendant puts up a fierce resistance

to a lawsuit, it makes plaintiffs’ recourse to the courts

less attractive. But a plaintiff has no more right to demand

that the defendant roll over and play dead than the defendant has a right to demand this of the plaintiff. And I

don’t think that anyone has ever thought that merely

because a defendant goes overboard—by committing

perjury, tampering with witnesses, even bribing judges

or jurors—it has (if it is a government agency or official

rather than a private person) violated the plaintiff’s right

of access to the courts, or his right to petition for redress

of grievances. Why should it matter whether the defen-
No. 07-2240 31

dant’s over-the-top opposition comes before or after the

plaintiff’s suit ends?

There are plenty of remedies for overreacting to litigation or the threat of litigation, remedies that make it

unnecessary to drag in the heavy artillery of constitutional

tort litigation under 42 U.S.C. § 1983. There are for example

the numerous federal statutes that forbid retaliation

against a person who files a statutory claim. For example,

Title VII of the Civil Rights Act of 1964 forbids “an employer to discriminate against any of his employees or

applicants for employment . . . because he has opposed any

practice” that violates the statute or “has made a charge,

testified, assisted, or participated in any manner in an

investigation, proceeding, or hearing under” the statute.

42 U.S.C. § 2000e-3(a). If the parties to this case are correct, it would seem to imply that such statutory provisions,

and the case law they have accreted, are superfluous

when the alleged retaliation is by a government official

because such retaliation could be litigated directly under

section 1983 as a violation of the Constitution.

In fact this route is closed off by Middlesex County

Sewerage Authority v. National Sea Clammers Ass’n, 453 U.S.

1 (1981), which holds that “when the remedial devices

provided in a particular Act are sufficiently comprehensive, they may suffice to demonstrate congressional

intent to preclude the remedy of suits under § 1983.” Id. at

20. As we explained the background of the Sea Clammers

doctrine in Delgado v. Stegall, 367 F.3d 668, 673 (7th

Cir. 2004) (citations omitted), “The plaintiffs in that case

sought relief from pollution against state officials under
32 No. 07-2240

federal statutes that provided comprehensive and fully

adequate remedies. The Supreme Court had recently

held, however, that section 1983, though typically used

to enforce federal constitutional rights, reaches infringements of federal statutory rights as well. This ruling

opened up the possibility that anyone who had a federal

statutory remedy for a harm inflicted under color of state

law could tack on a claim for relief under section 1983 as

well . . . . [T]he Court held that section 1983 was not an

available alternative because ‘it is hard to believe that

Congress intended to preserve the § 1983 right of action

when it created so many specific statutory remedies.’ The

completeness of those remedies showed that Congress

‘intended to supplant any remedy that otherwise would

be available under § 1983.’ ” See also Wright v. City of

Roanoke Redevelopment & Housing Authority, 479 U.S. 418,

423-29 (1987); Blessing v. Freestone, 520 U.S. 329, 346-48

(1997); Williams v. Wendler, 530 F.3d 584, 586 (7th Cir. 2008);

Williams ex rel. Hart v. Paint Valley Local School District,

400 F.3d 360, 363, n. 1 (6th Cir. 2005).

The Sea Clammers doctrine is not applicable to this

case because Legacy Healthcare’s suit—the suit that

provoked the alleged retaliation—was not a federal suit.

But the thinking behind the doctrine is. Legacy Healthcare accuses the defendant officials of conspiring to put

it out of business by making false charges (for example of

improper diversion of Medicaid funds), denying it

licenses without cause, and discriminating in favor of its

competitors. There are remedies under state law against

such official misconduct. No reason is given for thinking

that Legacy Healthcare needs to get into federal court
No. 07-2240 33

under federal law—let alone the First Amendment—in

order to protect itself. It is not as if the suit that called

down the wrath of the defendants had been a federal

suit, in which event there might be a concern that a

state court would not be sympathetic to protecting the

plaintiff against retaliation by state officials.

I am mindful of cases that hold that retaliation against

a prisoner’s filing a grievance can violate the prisoner’s

First Amendment rights, e.g., Hasan v. United States Department of Labor, 400 F.3d 1001, 1005 (7th Cir. 2005), and

cases cited there; Gill v. Pidlypchak, 389 F.3d 379, 384 (2d

Cir. 2004), but I think those cases read “petition the Government for redress of grievances” (the language of the

First Amendment) too literally. Every grievance, charge,

or complaint filed against a government agency seeks

redress, but does this mean that the government cannot

limit the right to sue itself without shouldering the heavy

burden of justification that the First Amendment has been

interpreted to place on anyone who seeks to deny an

assertion of a First Amendment right? The answer cannot

be yes. Such limitations are legion and rarely challenged.

The Supreme Court said in Hudson v. Palmer, 468 U.S. 517,

523 (1984), that “like others, prisoners have the constitutional right to petition the Government for redress of their

grievances, which includes a reasonable right of access to

the courts” (emphasis added). Legacy Healthcare had

reasonable access to the courts to litigate its claim against

the state for Medicaid reimbursement, and, as far as I

can tell, it has reasonable access to the courts to litigate

its opposition to the alleged harassment by the defendants. I conclude that there has been no infringement of
34 No. 07-2240

its constitutional right of access to the courts to petition

for redress of grievances and hence no basis for a suit

premised on such an infringement.

And I add that the practical objections to the interpretation of constitutional tort law offered in this case are

compelling. For on that interpretation every successfully litigated claim (and many failed claims as well)

against a state or federal agency would set the stage for

a federal constitutional suit, should the subsequent relations between the plaintiff and the agency sour, as they are

quite likely to do in the wake of a successful suit against

the agency. Defendants are not kindly disposed to plaintiffs, especially plaintiffs who beat them. But if they

retaliate, at least in the manner charged in this case, they

hand plaintiffs additional legal weapons, with various

limitations that deeming the retaliation unconstitutional

might destroy. There is no need to take that further

step beyond Button, Trainmen, United Mine Workers, and

Bounds.

9-5-08