Court Opinion

ID: 171833
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:40:46+00
Date Added: 2024-06-11T17:25:15.845934
License: Public Domain

FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                 February 27, 2009
                              FOR THE TENTH CIRCUIT
                                                                Elisabeth A. Shumaker
                                                                    Clerk of Court

    SUNSET MANOR, INC., a Kansas
    corporation, d/b/a Sunset Manor,

                Petitioner,

    v.                                                    No. 08-9535
                                                     (No. HHS-1: A-07-133)
    UNITED STATES DEPARTMENT                          (Petition for Review)
    OF HEALTH AND HUMAN
    SERVICES,

                Respondent.

                              ORDER AND JUDGMENT *

Before KELLY, PORFILIO, and O’BRIEN, Circuit Judges.

         This is an appeal from a final decision of the Secretary of Health and

Human Services (Secretary), affirming a civil monetary penalty against Sunset

Manor, Inc. (Sunset) for noncompliance with a fire-safety regulation. We have

jurisdiction under 42 U.S.C. § 1320a-7a(e) and we affirm.

*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
      Sunset is a skilled-nursing facility in Frontenac, Kansas. As a Medicare

participant, among other things, its “facility must be designed, constructed,

equipped, and maintained to protect the health and safety of residents, personnel

and the public.” 42 C.F.R. § 483.70. With regard to fire safety, § 483.70

(a)(1)(i) states “the facility must meet the applicable provisions of the 2000

edition of the Life Safety Code of the National Fire Protection Association.”

In turn, § 9.6.4 of the Life Safety Code (LSC) incorporates “NFPA 72, National

Fire Alarm Code[]” regarding alarm systems “to alert the municipal fire

department . . . of fire or other emergency.” R., Vol. 6 at 502-03. For facilities

like Sunset that have chosen a central station alarm system, § 5-2.6.1.1 of the

National Fire Alarm Code, NFPA 72 (1999 ed.) (NFAC) provides the central

station must “[i]mmediately retransmit the alarm to the public fire service

communications center.” R., Vol. 6 at 545. And NFAC Appendix

§ A-5-2.6.1.1(1) states “[t]he term immediately . . . mean[s] ‘without

unreasonable delay[,]’” and that “[r]outine handling should take a maximum of

90 seconds from receipt of an alarm signal by the central station until the

initiation of retransmission to the public fire service communications center.”

R., Vol. 6 at 544.

      On April 4, 2005, a state inspector acting on behalf of the Centers for

Medicare & Medicaid Services (CMS) conducted a fire-safety inspection and

reported that Sunset’s “fire alarm monitoring company was unable to reach [the]

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Frontenac Fire Department dispatch center for over 5 minutes due to busy

signals[,]” id. at 456, which “subjected [the residents] to unnecessary risk.” Id. at

478. On the basis of the report, CMS concluded that Sunset was not in substantial

compliance with the LSC and because the residents were in immediate jeopardy, 1

it imposed a $2,000 civil penalty.

      Sunset received an evidentiary hearing before an administrative law judge

(ALJ). In a detailed and studied decision, the ALJ held the NFAC could not be

enforced as a regulation against Sunset; however, he concluded it was “evidence

of industry standard in the area of fire alarms,” Id. Vol. 2 at 4, and Sunset

violated 42 C.F.R. § 483.70 “because the fire alarm caused by the drill the

surveyor triggered was not delivered to the fire department without unreasonable

delay.” Id. at 5. He also upheld the civil monetary penalty. On appeal, the

Departmental Appeals Board (Board) upheld the ALJ’s decision.

      “On review in this court, the Secretary’s findings of fact, ‘if supported by

substantial evidence on the record considered as a whole, shall be conclusive.’”

S. Valley Health Care Ctr. v. Health Care Fin. Admin., 223 F.3d 1221, 1223

(10th Cir. 2000) (quoting 42 U.S.C. § 1320a-7a(e)). “Our review is also governed

by 5 U.S.C. § 706. Under § 706(2), we may set aside agency conclusions if they

are [among other things] . . . arbitrary, capricious, an abuse of discretion, or

1
      Sunset abated the immediate-jeopardy condition the same day as the
inspection – April 4, 2005.

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otherwise not in accordance with law[.]” St. Anthony Hosp. v. U.S. Dep’t of

Health and Human Servs., 309 F.3d 680, 691 (10th Cir. 2002) (citing 5 U.S.C.

§ 706(2)(A)). Finally, “[w]e give substantial deference to an agency’s

interpretation and application of its own regulations. S. Valley, 223 F.3d at 1223.

      Sunset argues “under the LSC, [its] ‘system’ and responsibility for fire

department notification each terminate with successful annunciation of its fire

ala[r]m to an approved central station[.]” Pet’r Op. Br. at 19-20. The Board

rejected “Sunset[‘s] . . . narrow conception of its obligations under the

regulations,” R., Vol. 2 at 31, and concluded it “must do more than merely hook

up its fire alarm system . . . and hope for the best. It must take reasonable steps

to ensure that its alarm system and associated protocols operate to achieve their

intended protective purpose in the circumstances for which they were designed.”

Id. This is a reasonable interpretation of 42 C.F.R. § 483.70, which requires a

facility to be “equipped[] and maintained to protect[] . . . health and safety[.]”

      The parties stipulated that “[p]rior to this fire drill, Sunset Manor did not

know about any technical limitations or logistical difficulties at the Frontenac

Fire Department dispatch center that would prevent or interfere with its timely

receipt of a fire alarm notice from the facility’s UL-listed monitoring agency.”

R., Vol. 3 at 116. As such, Sunset contends that it cannot be “subject to

enforcement remedies for [an] unexpected delay . . . caused by circumstances

neither foreseen nor within its reasonable control.” Pet’r Op. Br. at 19. The

                                          -4-
record shows that Sunset provided telephone numbers for its alarm monitoring

company to contact. First on the list was the Frontenac emergency dispatch

center (which Sunset never investigated to determine whether it had a dedicated

emergency telephone line); the second number was Sunset’s former administrator,

who the alarm company learned was deceased when it called to report the fire;

and the third number was that of the current administrator who did not answer. 2

That Sunset gave the alarm company the names and telephone numbers of several

people to call in an emergency belies the notion that its obligation ended with the

installation of the system and the delay in contacting emergency services was

neither foreseeable nor within its reasonable control. Indeed, “[a]s an element of

its immediate corrective actions, Sunset Manor was able to have its monitoring

company call the dedicated emergency line at a nearby sheriff’s office (while

later the Frontenac dispatch center upgraded its system to provide that service).”

R., Vol. 2 at 32. 3

2
       Given that there must be a station at the facility that is always staffed, it
strikes us that Sunset could have provided that telephone number to the alarm
company rather than number of an administrator who might not be available.
3
       Sunset also claims that it was not required by the 42 C.F.R. § 483.70 or the
LSC to have a back-up plan in the event its notification system failed. As a
general proposition, this might be a correct statement, and neither the ALJ nor the
Board found otherwise. However, it misapprehends the ALJ’s decision and the
burden of proof. The ALJ found that once CMS made a prima facie showing of a
violation of § 483.70, it fell to Sunset to rebut that showing or establish an
affirmative defense, which it might have done by proving that it had a back-up
plan. R., Vol. 2 at 18.

                                          -5-
      Last, Sunset argues that because the ALJ concluded the NFAC does not

have the force and effect of a regulation, 4 the delay in retransmission cannot serve

as a basis for a violation of 42 C.F.R. § 483.70. This argument misses the mark.

As the Board stated:

      Even if the NFAC does not independently have the force and effect
      of a regulation, the ALJ recognized that it can be relevant for other
      purposes such as evidencing industry standards. . . . Here, Sunset
      Manor is not being held to substantial provisions of the NFAC on
      how long a delay may be countenanced for retransmission of an
      alarm. Rather, the NFAC provisions provide relevant context for
      assessing the reasonableness of measures Sunset Manor adopted to
      protect residents from fire hazards. . . . Even Sunset Manor does not
      suggest . . . that it could properly provide for . . . safety . . . if it did
      not take steps needed to avoid lengthy and patently unreasonable
      delays in emergency response that might occur if there was a
      disruption in communication between the central monitoring station
      and the emergency responders. We find that the NFAC discussion of
      immediate retransmission provides a useful and widely accepted
      point of reference to understand whether the delay here was
      unreasonable.

R., Vol. 2 at 37.

      The decision of the Secretary is AFFIRMED.

                                                       Entered for the Court

                                                       Paul J. Kelly, Jr.
                                                       Circuit Judge

4
      The Board vacated the ALJ’s conclusion that the NFAC was not
enforceable as a regulation as “unnecessary to our decision in this case.”
R., Vol. 2 at 37.

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