UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 06-1868

LIBERTY COMMONS NURSING AND REHAB CENTER -

JOHNSTON,

Petitioner,

versus

MICHAEL O. LEAVITT, Secretary of the United

States Department of Health & Human Services;

U. S. DEPARTMENT OF HEALTH & HUMAN SERVICES,

Respondents.

On Petition for Review of an Order of the United States Department

of Health & Human Services. (A-05-91; CR1294)

Argued: May 23, 2007 Decided: July 20, 2007

Before WILLIAMS, Chief Judge, MOTZ, Circuit Judge, and HAMILTON,

Senior Circuit Judge.

Affirmed by unpublished per curiam opinion.

ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, P.L.C.,

Arlington, Virginia, for Petitioner. Sonia Gaye Burnett, Assistant

Regional Counsel, UNITED STATES DEPARTMENT OF HEALTH & HUMAN

SERVICES, Office of the General Counsel, Washington, D.C., for

Respondents. ON BRIEF: Daniel Meron, General Counsel, Christine A.

Bradfield, Acting Chief Counsel, Region IV, UNITED STATES

DEPARTMENT OF HEALTH & HUMAN SERVICES, Office of the General

Counsel, Washington, D.C., for Respondents.
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Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:

A North Carolina nursing facility challenges the determination

of the Department of Health and Human Services that the facility’s

noncompliance with federal regulations was at the “immediate

jeopardy” level under the regulatory framework. Finding no error,

we affirm the agency’s determination. We also reject the nursing

facility’s contention that the agency’s review process violated the

Administrative Procedure Act or due process requirements. 

I.

Federal regulations require that nursing facilities receiving

Medicare funds comply with certain safety requirements. If

surveyors find a facility has failed to comply, they assess the

level of the noncompliance to determine the appropriate penalty.

See, e.g., 42 U.S.C. 1395i-3(h) (2006); 42 C.F.R. §§ 483.1 et seq.

(2006); § 488.301 (2006). Liberty Commons, a nursing facility in

Benson, North Carolina, participates in and receives funds from

Medicare, and was surveyed for regulatory compliance on October 23,

2003. The North Carolina State Department of Health and Human

Services conducted the annual survey as an agent for the Centers

for Medicare and Medicaid Services (CMS), an agency of the federal

department of Health and Human Services (HHS or “the Secretary”).

The surveyors found that Liberty Commons had neglected to

provide proper care to residents, in violation of 42 C.F.R. §
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483.13(c) (2006). In particular, one resident of the facility,

referred to as Resident #2, was cared for on October 21, 2003, by

a nurse’s assistant wearing latex gloves, even though the resident

had a documented allergy to latex of which the nursing facility was

aware. The resident then complained of shortness of breath, and

was hospitalized.

CMS found that the following series of staff errors at the

nursing home had led to this noncompliance: (1) the nurse’s

assistant was unfamiliar with the resident and his allergy; (2)

warning signs about the latex allergy were missing from the

resident’s room; (3) the nurse’s assistant did not receive a verbal

warning at the beginning of her shift about the allergy; and (4)

the nurse’s assistant failed to consult the resident's record until

the end of her shift. Accordingly, CMS found that the

noncompliance was at the “immediate jeopardy” level, and the

Secretary imposed a civil monetary penalty.

Liberty Commons challenged the CMS decision through the

administrative adjudication process provided by HHS. Following a

January 12, 2005 hearing, an Administrative Law Judge (ALJ) upheld

the findings of noncompliance and immediate jeopardy, but reduced

the fine against the nursing facility. The ALJ found that although

Liberty Commons had a plan for preventing this type of violation --

i.e. providing care to patients with known allergies -- it was lax

in implementing this plan and had not sufficiently trained its
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staff, and that the multiple failures to alert the nurse’s

assistant constituted “persuasive proof that [the] problem was

systemic.”

The ALJ further concluded that even if there was not

sufficient medical evidence to establish that Resident #2 did have

a latex allergy, an “immediate jeopardy” designation was still

appropriate because of “the weakness of [Liberty Commons’] system

for protecting its residents demonstrated by the series of errors

that occurred in providing care to Resident #2.” It is not

disputed that at the time of the incident, Liberty Commons believed

Resident #2 did have a latex allergy. The ALJ inferred from the

treatment given to Resident #2 “that other residents would be

jeopardized when placed in similar circumstances and that there

would be a likelihood of serious injury, harm, or death as a

consequence” and that “[t]he systemic failure to implement

protective measures . . . would jeopardize any resident who is

dependent on a staff to treat him or her subject to safety

precautions.” Several other residents of Liberty Commons had

allergies to foods or other substances, so the facility’s “systemic

failure” to handle residents’ allergies with appropriate

precautions could endanger them, as well as future residents with

allergies or special needs. See Respondent’s Br. at 18.

Liberty Commons appealed the ALJ decision to the HHS

Departmental Appeals Board (DAB). The DAB, in a June 12, 2006
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decision, held that (1) the ALJ’s conclusion that Liberty Commons

was not in substantial compliance was supported by substantial

evidence, and (2) the immediate jeopardy finding was not clearly

erroneous.

Liberty Commons concedes that it failed to comply with the

regulatory requirements. It contends, however, that the Secretary

erred in determining that the noncompliance rose to the “immediate

jeopardy” level. It maintains that because the evidence does not

sufficiently establish that Resident #2 actually had a latex

allergy or suffered serious harm because of the noncompliance,

neither he nor any other particular, identifiable resident was

likely to be harmed by its particular violations on October 21,

2003. Liberty Commons also asserts that the DAB applied the wrong

burden of proof in its review of the ALJ decision. Br. of

Petitioner at 41-50.

II.

A.

The federal regulation at issue here defines “immediate

jeopardy” as “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.” 42 C.F.R. § 488.301. Liberty Commons does not dispute
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that this provision controls the case; it merely disagrees with how

the Secretary has interpreted and applied the regulation.

“When the question before the court is whether an agency has

properly interpreted and applied its own regulation, the reviewing

court must give the agency’s interpretation ‘substantial

deference.’” Maryland General Hosp. v. Thompson, 308 F.3d 340, 343

(4th Cir. 2002). That said, “an interpretation that is

inconsistent with the plain language of an unambiguous regulation

cannot be upheld simply because the interpretation, standing alone,

seems reasonable enough.” Id. at 347. Thus, we must defer to the

Secretary’s reasonable interpretation of the regulation so long as

it is not inconsistent with the plain language of the regulation.

Moreover, we must defer to the agency’s findings of fact “if

supported by substantial evidence on the record considered as a

whole.” 42 U.S.C. § 1320a-7a(e) (2006).

Liberty Commons argues that the Secretary has misinterpreted

and misapplied the regulation in question in finding that the

facility was in noncompliance at the “immediate jeopardy” level.

Liberty Commons rests its case -- as it must given the deference

owed to the agency’s interpretation of its regulation -- on its

reading of “the regulation’s plain language,” Br. of Petitioner at

39, which it asserts is “clear and unambiguous,” id. at 22.

Liberty Commons reads the “the plain language” of the regulation to

state that an “immediate jeopardy” finding “requires a
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determination of [the noncompliance’s] impact on one or more of the

facility’s actual residents.” Petitioner’s Reply Br. at 9

(emphasis added).

But these are the words of Liberty Commons, not of the

regulation. By its terms, the regulation only requires that the

nursing home’s noncompliance is likely to cause harm to “a

resident.” 42 C.F.R. § 488.301 (emphasis added). The word

“actual” does not appear in the regulation; the phrase “one or

more” does appear in the regulation, but in reference to the

nursing home’s noncompliance with “one or more requirements” of the

regulatory scheme, not as a modifier of “resident.” Cf. Br. of

Petitioner at 22; Petitioner’s Reply Br. at 9.

The use of the indefinite article “a” -- and no other modifier

-- before “resident” suggests that the regulation does not require

that the noncompliance jeopardizes “one or more actual” or

identifiable residents. If the Secretary had intended that

specific requirement, he would have used that language in writing

the rule. Moreover, because no actual harm to a resident is

required for an “immediate jeopardy” finding, only “likely” harm,

the definition as a whole encompasses future harms to an as yet

unidentified resident. If, as Liberty Commons insists, the

regulation required otherwise, there would be no need to include

the word “likely” -- for an actual resident either would or would

not have been harmed. For these reasons, we believe the
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Secretary’s view -- that “a resident” has a broader meaning and

does not require establishing harm from a particular, identifiable

compliance violation to a particular, identifiable, resident -- is,

at the very least, a reasonable interpretation of the regulation’s

language, to which we must defer. See Maryland General Hosp., 308

F.3d at 343.

Accordingly, Liberty Commons cannot prevail. Substantial

evidence supports the ALJ’s determination that the facility's

noncompliance problem was “systemic.” That is, the noncompliance

consisted not merely of using latex on a single resident believed

to be allergic to latex, but also of failing to follow the

necessary plan and procedures to protect residents who have

allergies. As the ALJ found, “the weakness of [Liberty Commons’]

system for protecting its residents [is] demonstrated by the series

of errors that occurred in providing care to Resident #2.” For

this reason, the ALJ concluded that “[t]he systemic failure to

implement protective measures . . . would jeopardize any resident

who is dependent on a staff to treat him or her subject to safety

precautions.” Finding no error, we affirm the Secretary’s

determination that the noncompliance met the requirement of

“immediate jeopardy” under the governing regulation.

B.

Liberty Commons further contends that the burden of proof the

Secretary applied during the administrative review process
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“offend[s]” the Administrative Procedure Act (APA), 5 U.S.C. § 500

et seq. (2000), and due process of law. Br. of Petitioner at 23;

41-50. In particular, Liberty Commons objects that, after the ALJ

found it was not in compliance, the DAB placed the burden on it,

the petitioner, to show that CMS’s determination that the

noncompliance was at the “immediate jeopardy” level was clearly

erroneous, rather than requiring the Secretary to again establish

this during the appeals procedure.

This argument ignores the relevant regulation, which

explicitly sets forth the burden of proof with respect to the level

of noncompliance: “CMS’s determination as to the level of

noncompliance . . . must be upheld unless it is clearly erroneous.”

See 42 C.F.R. § 498.60 (2006). In light of the clear instructions

in this regulation, which the Board unquestionably followed, we

construe Liberty’s argument here to be either that (1) HHS lacks

statutory authority to have issued this regulation, or (2) the

regulation is unconstitutional. Neither is the case.

The APA, on which Liberty relies, only creates default rules

for agency adjudications. But Congress, in the Social Security

Act, 42 U.S.C. §§ 1302, 1395hh (2006), empowered HHS to create

regulations for its Medicare adjudications, and so the APA

provision relied on by Liberty Commons simply does not apply to

this case. Moreover, we find no support for the position that the

agency appeal procedure violates the Constitution’s Due Process
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Clause. The purpose of the statutory and regulatory framework is

to guide the distribution of Medicare funds to appropriate

facilities -- namely, those that comply with safety regulations.

To be sure, Liberty Commons was due some process before being

sanctioned and fined for a regulatory violation, see Mathews v.

Eldridge, 424 U.S. 319, 334-35 (1976). But, it received a full

evidentiary hearing before an ALJ, followed by an opportunity to

appeal the ALJ’s decision to the DAB. Balancing the Government’s

interests in spending Medicare funds appropriately and protecting

the safety of nursing home residents, and a nursing home’s interest

in the financial and reputational cost of the noncompliance

finding, we can only conclude that the process Liberty Commons

received was sufficient to reduce the risk of erroneous

deprivation. Id. Because Liberty Commons received all the process

it was due, its constitutional due process claim must also fail.

III.

For the foregoing reasons, the order of the Secretary is 

AFFIRMED.