Case Name: Regina ROSS, d/b/a Waupaca Rest Home, a proprietorship, Individually and on behalf of all other Wisconsin Nursing Homes whether corporately or Individually owned, similarly situated, Plaintiffs, v. The STATE OF WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES and Wilbur Schmidt, Secretary of the Department of Health and Social Services, Defendants
Court: United States District Court for the Eastern District of Wisconsin
Jurisdiction: United States
Decision Date: 1973-10-30
Citations: 369 F. Supp. 570
Docket Number: No. 72-C-136
Parties: Regina ROSS, d/b/a Waupaca Rest Home, a proprietorship, Individually and on behalf of all other Wisconsin Nursing Homes whether corporately or Individually owned, similarly situated, Plaintiffs, v. The STATE OF WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES and Wilbur Schmidt, Secretary of the Department of Health and Social Services, Defendants.
Judges: Reynolds, Chief District Judge, concurred and filed opinion.
Reporter: Federal Supplement
Volume: 369
Pages: 570–575

Head Matter:
Regina ROSS, d/b/a Waupaca Rest Home, a proprietorship, Individually and on behalf of all other Wisconsin Nursing Homes whether corporately or Individually owned, similarly situated, Plaintiffs, v. The STATE OF WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES and Wilbur Schmidt, Secretary of the Department of Health and Social Services, Defendants.
No. 72-C-136.
United States District Court, E. D. Wisconsin.
Oct. 30, 1973.
Reynolds, Chief District Judge, concurred and filed opinion.
Thomas J. Bergen, Milwaukee, Wis., for plaintiffs.
Robert W. Warren, Atty. Gen. of Wisconsin by Ward L. Johnson, Madison, Wis., for defendants.
Before FAIRCHILD, Circuit Judge, REYNOLDS, Chief District Judge, and GORDON, District Judge.

Opinion:
DECISION AND ORDER
PER CURIAM.
This class action seeks to have § 146.-30(3) (c) of the Wisconsin statutes and certain administrative rules thereunder declared unconstitutional. Further application and enforcement of the statute is sought to be enjoined. The plaintiffs have, in effect, moved for judgment on the pleadings; the defendants have conceded that resolution by such method is proper, since the only issue presented is the constitutionality of the challenged statute.
Section 146.30(3) (c) of the Wisconsin statutes grants authority to the department of health and social services (hereinafter "department") immediately to withdraw patients who are receiving county or state support from nursing homes under certain circumstances. This can be done when the department "determines that an emergency exists which places the patient's health, safety or welfare in jeopardy" because of a failure by the nursing home to comply with the department's standards.
The challenged regulations create categories of violations of standards and prescribe actions, up to and including patient removal, which are to follow from asserted violations of each category. The standards themselves are found in chapter 32H of the state's administrative code. The statute does not contain any provisions for a hearing so as to enable nursing home administrators to challenge the statements of welfare directors or department inspection personnel (even though those statements are the basis for the department's action) either before or after patient removal.
The plaintiffs allege that the statute and the administrative rules allow deprivation, under color of state law, of rights and privileges secured by the United States Constitution. Specifically, they complain about the removal of patients and the loss to them of government funds for patient care, without an opportunity to be heard in a meaningful manner. The defendants acknowledge that the plaintiffs have "a qualified right to receive public money for support of public welfare patients residing in nursing home[s]." They urge, however, that we must balance the interests of the state against those of the nursing home proprietors. Such a comparison, it is contended, weighs so heavily in favor of the state's interests that notice and an opportunity for a proprietor to be heard regarding patient removal is not constitutionally mandated.
The defendants' "balancing" argument is misplaced in this context. The Supreme Court has stated in Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), that
" . . . a weighing process has long been a part of any determination of the form of hearing required in particular situations by procedural due process. But, to determine whether due process requirements apply in the first place, we must look not to the 'weight' but to the nature of the interest at stake. See Morrissey v. Brewer, ante, [408 U.S. 471] at 481 [92 S.Ct. 2593, at 2600, 33 L.Ed.2d 484], We must look to see if the interest is within the Fourteenth Amendment's protection of liberty and property." 408 U.S. at 570-571, 92 S.Ct. at 2705 (emphasis in the original).
In analyzing the interest involved, we must look to the teachings of Roth as a starting point. See City of Kenosha v. Bruno, 412 U.S. 507, 93 S.Ct. 2222, 37 L.Ed.2d 109 (1973). Roth suggests that the plaintiffs' "liberty" may be in jeopardy here. The charges necessary to call § 146.30(3) (c) into play against a nursing ' home proprietor arguably "might seriously damage his standing and associations in his community". 408 U.S. at 573, 92 S.Ct. at 2707. See also Wisconsin v. Constantineau, 400 U. S. 433, 437, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971). We need not decide that question, for, under Roth, his "property" interests are clearly implicated.
"To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. It is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined. It is a purpose of the constitutional right to a hearing to provide an opportunity for a person to vindicate those claims." 408 U.S. at 577, 92 S.Ct. at 2709.
Nursing home operators do have more than an abstract need or desire to retain patients for whom public support is received, as well as more than a unilateral expectation of so doing. They have a "claim of entitlement . . . grounded in the statute defining eligibility . ." 408 U.S. at 577, 92 S.Ct. at 2709. See Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). The fact that the claim may be based on a "privilege" rather than a "right" is no longer relevant. Graham v. Richardson, 403 U.S. 365, 374, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971). They may also have support for their claim of entitlement in Wis.Stat. § 146.30(7) which appears to require notice and a hearing before license revocation or suspension; patient removal without notice and a hearing may well "limit" the efficacy of a license. See Maxwell v. Wyman, 458 F.2d 1146, 1151 (2d Cir. 1972).
We find, therefore, that the interest of the plaintiffs in retaining public assistance patients and receiving the public funds flowing therefrom is within the fourteenth amendment's protec-tion of "property". Section 146.30(3) (c) of the Wisconsin statutes, to the extent that it makes no provision for a hearing concerning patient removal, does not afford due process of law and violates the fourteenth amendment. Consequently, the defendants may not remove patients from the plaintiffs' facilities without affording notice and an opportunity to be heard.
With respect to the form of the hearing, we will specify the minimum requirements, but we decline to prescribe otherwise the exact nature it need assume. The hearing must comply with the applicable minimum safeguards set forth in Goldberg, Morrissey, and Scarpelli. Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) ; Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d' 484 (1972); Scarpelli v. Gagnon, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973). These minimum elements are: (a) timely written notice of the claimed violations; (b) disclosure to the nursing home proprietor of the evidence against him; (c) the right to be represented by retained counsel; (d) an opportunity to be heard in person and to present witnesses and documentary evidence; (e) an opportunity to confront and cross-examine adverse witnesses; (f) a hearing body which is "neutral and detached" in that it does not include persons responsible for investigations of nursing homes or persons who assert charges based on such investigations; and (g) a written statement by the factfinders as to evidence relied on and reasons for the action taken.
Normally such a hearing must be afforded prior to the termination of any benefits. Bell v. Burson, 402 U.S. 535, 542, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971); Goldberg v. Kelly, 397 U.S. 254, 261, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). However, the nature of the government's interest in protecting residents of private nursing homes from true emergency situations posing serious threats to their health and safety may justify different treatment in those situations. Cases involving such true emergencies constitute "extraordinary situations where [a] valid governmental interest is at stake that justifies postponing the hearing until after the event." Boddie v. Connecticut, 401 U.S. 371, 379, 91 S.Ct. 780, 786, 28 L.Ed.2d 113 (1971).
We do not believe it appropriate for this court to attempt to define which of the many possible violations and deficiencies which might be charged would constitute true emergency conditions. We are cognizant of the fact that a grace period follows many charges; such a period interposed between assertion of violative conditions and patient removal certainly suggests that such conditions are not considered so serious as to preclude a pre-removal hearing. Beyond that observation, however, we believe that the state authorities are better equipped to make such determinations.
This is not an abdication of our function, for we realize that ultimately it is the judiciary's obligation to determine if the decisions made are constitutionally supportable. At this stage, however, we assume that the state officials will act in good faith, in accordance with the spirit of the duty entrusted to them, and "neither . . . their expertise nor their assistance in accurately identifying and evaluating the interests at stake [should] be ignored." United States ex rel. Miller v. Twomey, 479 F.2d 701, 719 (7th Cir. 1973).
Therefore, it is ordered that the defendants be and hereby are permanently enjoined from attempting to enforce the provisions of Wis.Stat. § 146.30(3) (c) without affording the plaintiffs notice and an opportunity to be heard prior to patient removal, or, in true emergency situations, within a reasonably short time after removal, all in accordance with the standards set forth in this decision and order.