Court Opinion

ID: 625326
Source: CourtListenerOpinion
Date Created: 2012-03-14 16:56:11+00
Date Added: 2024-06-11T17:51:10.873344
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                                _______________

                                     No. 11-2616
                                   _______________

                  JEWISH HOME OF EASTERN PENNSYLVANIA,
                                           Petitioner

                                           v.

              CENTERS FOR MEDICARE & MEDICAID SERVICES;
              DEPARTMENT OF HEALTH AND HUMAN SERVICES,
                                           Respondents
                           _______________

             On Petition for Review from the Departmental Appeals Board
                  of the Department of Health and Human Services
                       (Docket No. A-11-19, Decision No. 2380)
                                  _______________

                      Submitted Under Third Circuit LAR 34.1(a)
                                  February 9, 2012
                                 _______________

                   Before: SLOVITER, VANASKIE, Circuit Judges,
                            and POLLAK, District Judge *

                            (Opinion filed: March 14, 2012)

                                   _______________

                                      OPINION
                                   _______________

*
 Honorable Louis H. Pollak, Senior Judge of the United States District Court for the
Eastern District of Pennsylvania, sitting by designation.
POLLAK, District Judge.

       The Centers for Medicare and Medicaid Services (“CMS”) is the division of the

Department of Health and Human Services that superintends the operations of the

Medicare program. Among CMS’s many responsibilities are the setting of standards for

facilities providing nursing care for Medicare patients and the monitoring of compliance

with those standards. In Pennsylvania the monitoring function is carried out by personnel

of regional offices of the Pennsylvania Department of Health, who conduct periodic

inspections on CMS’s behalf of nursing facilities in the region that care for Medicare

patients. The results of the inspections are reported to CMS. When the reported results

lead CMS to conclude that a facility has been significantly non-compliant with prescribed

standards, CMS is empowered to impose a civil money penalty (“CMP”) on the

offending facility, the penalty being measured by the severity and duration of non-

compliance. 42 U.S.C. § 1395i-3(h)(2)(B)(ii); 42 C.F.R. §§ 488.430 et seq. An entity

challenging a CMP may appeal to an administrative law judge (“ALJ”) and thence to the

Appellate Division of the Departmental Appeals Board (“DAB”). 42 C.F.R. § 402.19.

An adverse DAB ruling is then subject to review by a court of appeals. 42 U.S.C.

§§ 1320a-7a(e), 1395i-3(h)(2)(B)(ii)(I); 42 C.F.R. § 402.21.

       In the case at bar, the Jewish Home for Eastern Pennsylvania (“JHEP”)—a nursing

facility located in Scranton, Pennsylvania—petitions for review of a DAB decision

sustaining a CMP in the sum of $42,600. The CMP was calculated at the rate of $600 per

day of unremedied deficiencies, pursuant to inspections conducted by personnel of the

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Scranton office of the Pennsylvania Department of Health in November 2007 and

January 2008.

       In seeking review of the CMP, petitioner JHEP is not contesting CMS’s findings

of deficiencies in nursing care. Instead, invoking Yick Wo v. Hopkins, 118 U.S. 356

(1886), JHEP asserts that it has been the target of selective enforcement, in that the

facility has been allegedly singled out for harsher penalties than other comparable nursing

facilities solely because JHEP, while non-denominational, is associated with Jewish

culture and values.

       In its brief in this court, JHEP notes that this case “involves different (new) fines

but the same parties and similar facts” as an earlier case, Jewish Home of Eastern PA v.

Centers for Medicare and Medicaid Services, 413 F. App’x 532 (3d Cir.), cert. denied,

132 S. Ct. 837 (2011). (To avoid confusion we will refer to the cited case as JHEP I and

the case at bar as JHEP II.) In JHEP I—the earlier case—JHEP also mounted a selective

enforcement defense against the imposition by CMS of a CMP based on deficiencies

found by CMS following a 2005 inspection conducted by personnel of the Scranton

office of the Pennsylvania Department of Health.

       The correctness of JHEP’s statement in its brief that JHEP I and JHEP II involve

“similar facts” is shown by comparing central elements of the offers of proof submitted to

the respective ALJs by JHEP in the two cases:

       1.     Offer of proof in JHEP I (excerpts):

                     Petitioner will meet its burden to show that the citations were
              tainted by racial and/or religious bias with three types of evidence:
              1) expert statistical evidence comparing and contrasting CMS’

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Quality Measures (QM) data for all facilities surveyed from the
Scranton Field Office (SFO) as well as all F-324 citations issued by
the SFO, 2) eye-witness testimony regarding surveyor religious bias
and SSA management’s failure to investigate or take meaningful
action when considering complaints of bias; and 3) a side-by-side
comparison of CMS 2567 factual narratives and citations under F-
324 issued by the SFO.

       ****

        Petitioner will introduce the Report of Samuel P. Wilcock,
Ph.D., an expert in probability and statistics as well as his
curriculum vitae. This report concludes with a very high degree of
confidence that a valid statistical study of the F-324 citations issued
to the JHEPA and other facilities in the SFO reveals that the F-324
citations were not issued using race/religion neutral criteria.

        Petitioner has also analyzed the F-324 citations issued to the
JHEPA in the surveys at issue in this case and F-324 citations issued
to other facilities in the SFO. This analysis reveals that the SFO
assigns a higher scope and severity rating to the JHEPA in cases
where the facts of each facility’s alleged noncompliance is
equivalent or identical. This evidence strengthens the conclusion
that the citations issued in the surveys at issue in this case are tainted
with bias.

       ....

       Petitioner will offer the testimony of Sara Raposo, the former
JHEPA Activities Director. Ms. Raposo will testify that a SFO
survey inspector named “Kieran Bunnel (Ph.)” expressed survey bias
which was understood by Ms. Raposo to be based on Ms. Bunnel’s
Christian ideology, faith or view-point. Specifically, Ms. Bunnel
said words to the effect of: “Well, I’m Christian, and I wouldn’t feel
comfortable [sharing a non-denominational pastry repast] Kiddush”
offered by the JHEPA to its residents.

        In other words, because Ms. Bunnel was “Christian” she did
not feel “comfortable” sharing pastries at the facility event which
was non-denominational, open to all, but which happened to have
the Hebrew name, Kiddush. Because Ms. Bunnel did not feel
“comfortable,” she concluded that the pastry event was not one that
all residents could enjoy. The SFO then cited the facility. Ms.

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              Reposo’s [sic] testimony will clearly establish that at least this SFO
              surveyor used her “Christian” point of view to assess the adequacy
              of the facility’s activities program.

                      Petitioner will offer the testimony of Mark White, the SSA
              Regional Manager. He is expected to testify by subpoena that he
              received complaints about Ms. Bunnel. These complaints included a
              JHEPA IDR [request for Informal Dispute Resolution] that
              complained that Ms. Bunnel recommended citing the JHEPA based
              on religious criteria. Mr. White is expected to testify that he wrote
              to the JHEPA indicating that he had “thoroughly considered” the
              IDR complaint and found it to be without merit, even though he
              failed to conduct any real investigation. In other words, even though
              the SSA had received other complaints about Ms. Bunnel, Mr. White
              issued a boilerplate response to the JHEPA and did not take the
              complaint seriously.

JHEP I, Petitioner’s Br. at 20-22, 24-25.

       2.     Offer of proof in JHEP II:

                     Petitioner’s second affirmative defense is that evidence
              should be excluded under 42 C.F.R. § 498.61 because the citation
              upon which the CMP rests is the result of unlawful
              discrimination. . . .

                     Petitioner will support this defense with the testimony of
              three primary witnesses. The first is Dr. Samuel Wilcock, Ph.D., an
              expert statistician. Dr. Wilcock will testify that the high level of F-
              324 citations issued to the JHEPA by the Scranton Field Office
              (SFO) is likely to be the result of bias.

                    The second is Ms. Sara Raposo. Ms. Raposo is the former
              JHEPA Activities Director. Ms. Raposo will testify that “Kieran
              Bunnel (Ph.),” an SSA surveyor that has since been terminated by
              the SSA, expressed a religious bias when she investigated the
              JHEPA activities program and issued a citation for failure to provide
              appropriate activities. 1

1
 In the administrative proceedings that led to the present petition, JHEP’s counsel
acknowledged that JHEP had “no specific evidence of surveyor bias” by any of the
Scranton inspectors involved in the current case.
                                             5
                     The third is Mr. Mark White, who is expected to testify under
              subpoena. Mr. White is the SSA Regional Manager with
              responsibility for supervising the SFO and with responsibility for
              reviewing and deciding facility requests for Informal Dispute
              Resolution (IDR). Mr. White is expected to testify that he received
              an IDR from the JHEPA raising the issue of religious discrimination
              but that he failed to conduct any meaningful investigation after
              receipt of the IDR.

                     In addition, Petitioner has prepared a side-by-side comparison
              of the F-324 citations issued in this case with F-324 citations issued
              to non-Jewish facilities in the SFO. The comparison, which is
              included in this Narrative, clearly shows that the JHEPA is treated
              more harshly than non-Jewish facilities for alleged violations which
              are factually similar if not identical.

                    Petitioner will also introduce Quality Measures (QM) data,
              and SFO survey data to support the allegation of bias.

JHEP II, Petitioner’s Br. at 6-7.

       The panel of this court that considered JHEP I denied JHEP’s petition for review

on February 11, 2011. 413 F. App’x 532. The panel ruled as follows:

               To establish a selective-enforcement claim, JHEP must show (1) that
       it was treated differently from other similarly situated individuals, and (2)
       “that this selective treatment was based on an unjustifiable standard, such
       as race, or religion, or some arbitrary factor, . . . or to prevent the exercise
       of a fundamental right.” Dique v. N.J. State Police, 603 F.3d 181, 184 n. 5
       (3d Cir. 2010) (quotations omitted). Hence, to maintain an equal protection
       claim of this sort, JHEP must provide evidence of intentional or purposeful
       discriminatory purpose, not mere unequal treatment or adverse effect.
       Snowden v. Hughes, 321 U.S. 1, 8, 64 S. Ct. 397, 88 L. Ed. 497 (1944).
       JHEP must show that the “decisionmaker . . . selected or reaffirmed a
       particular course of action at least in part because of, not merely in spite of,
       its adverse effects . . . .” Wayte v. United States, 470 U.S. 598, 610, 105 S.
       Ct. 1524, 84 L. Ed. 2d 547 (1985) (quotations omitted).

               JHEP relies upon three primary documents to show discriminatory
       effect and discriminatory purpose. First, JHEP submits side-by-side
       comparisons of citations issued to JHEP as compared to other local
       facilities. JHEP also provides a statistical report which concluded that the

                                              6
       number of citations issued to JHEP was high in comparison to other
       facilities surveyed from the Scranton Field Office and that this finding was
       likely the result of bias and not likely the result of differences in the quality
       of care, error, or chance. Additionally, JHEP presents the affidavit of an
       employee who claims that the CMS surveyor made a discriminatory
       statement in October 2004, over a year before the surveys in question.
       Specifically, in surveying whether JHEP provided activities on Saturdays
       for residents of all denominations, the surveyor was told that there was a
       Kiddush—a ceremony involving a blessing and food that all individuals
       were invited to regardless of their religious affiliations. According to the
       employee, the surveyor responded that she was Christian and would feel
       uncomfortable attending such an activity.

               We hold that JHEP has failed to establish a claim for selective
       enforcement under the Equal Protection Clause. JHEP has not
       demonstrated that CMS issued fines with an intentionally discriminatory
       purpose. We find JHEP’s reliance on the surveyor’s alleged statement to
       be misplaced as it was clearly taken out-of-context, was not
       contemporaneous to the surveys in question, and was not relevant or
       facially discriminatory. Additionally, JHEP has failed to show that it was
       treated differently from other similarly situated facilities. Therefore, we
       conclude that JHEP’s equal protection claim has no merit.

JHEP I, 413 F. App’x at 535-36, cert. denied, 132 S. Ct. 837 (2011).

       It thus appears that the issue of whether CMS has been engaged in selective

enforcement with respect to petitioner JHEP has been decided adversely to the petitioner

in litigation that has gone to final judgment between the same parties as the parties in the

case at bar. Under these circumstances, the petitioner is precluded from relitigating the

selective enforcement issue. See Restatement (Second) of Judgments § 27 (1982)

(“When an issue of fact or law is actually litigated and determined by a valid and final

judgment, and the determination is essential to the judgment, the determination is

conclusive in a subsequent action between the parties, whether on the same or a different

                                               7
claim.”); accord Taylor v. Sturgell, 553 U.S. 880, 892 (2008); Peloro v. United States,

488 F.3d 163, 174-75 (3d Cir. 2007).

       There is one additional, novel argument in JHEP’s briefing to support the present

petition, namely that due process has been offended because the facility has not been

afforded an evidentiary hearing on its selective enforcement claim. 2 But JHEP is not

entitled to an evidentiary hearing to explore an issue that has already been fully litigated

to final judgment in prior litigation.

       For the foregoing reasons, JHEP’s petition for review will be denied.

2
  It is to be noted that the panel ruling in JHEP I, quoted at length above, reviewed
JHEP’s proposed testimony and documentary evidence and found that, given full weight,
they were unpersuasive on JHEP’s equal protection claim. On September 6, 2011, JHEP
filed a motion to stay appellate review of the current petition and to assign the matter to a
district court for an evidentiary hearing. The motion was denied on October 7, 2011.

       In amplification of the motion to stay, JHEP alluded to a report by a probability
expert, Dr. William Fairely (additional to the report by Dr. Wilcock, referred to in
JHEP’s offer of proof in JHEP I and JHEP II). But the report of Dr. Fairely is not
annexed to JHEP’s motion to stay, nor is it contained in the appendix, and hence it cannot
be considered.
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