Case: 10-60112 Document: 00511231139 Page: 1 Date Filed: 09/13/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 13, 2010
No. 10-60112 Lyle W. Cayce
Summary Calendar Clerk
CEDAR LAKE NURSING HOME
Petitioner
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
Respondent
Petition for Review from the United States Department of Health and Human
Services, Departmental Appeals Board
Before DAVIS, SMITH, and SOUTHWICK, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
In this petition for review from the Departmental Appeals Board of the
United States Department of Health and Human Services (“DHHS”), Petitioner
Cedar Lake Nursing Home (“Cedar Lake”) challenges a $5,000 per-instance civil
monetary penalty levied by the DHHS against Cedar Lake for violations of 42
C.F.R. § 483.25(h). We reject Petitioner’s challenge and DISMISS the petition
for review.
I.
Cedar Lake is a nursing home that participates in the Medicare
program. On February 20, 2008, a resident of Cedar Lake designated in the
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No. 10-60112
record as “Resident # 10" – a 92 year-old woman suffering from a variety of
ailments – wandered away from the facility and was later discovered walking
alone along a highway. Witnesses alerted Cedar Lake staff, who returned her
to the facility. Cedar Lake’s alarm system, designed to prevent such
“elopements” by residents, did not sound when Resident # 10 opened the door
to leave the facility. Cedar Lake alleges through witness testimony that the
alarm did not sound because an installation contractor responsible for
installing a new alarm system disconnected the old system without informing
Cedar Lake personnel.
After this incident, surveyors affiliated with the Centers for Medicare
and Medicaid Division (“CMS”) of the DHHS conducted a survey of Cedar
Lake and determined the facility to be in violation of several Medicare-related
regulations, including 42 C.F.R. § 483.25(h), which requires a nursing home
to “ensure that – (1) the resident environment remains as free of accident
hazards as is possible; and (2) each resident receives adequate supervision
and assistance devices to prevent accidents.” Specifically, the surveyors
found that Cedar Lake violated 42 C.F.R. § 483.25(h) with respect to Resident
# 10's elopement incident. In response to these findings, CMS imposed a
$5,000 per-instance civil monetary penalty on Cedar Lake for violations of 42
C.F.R. § 483.25(h).
Cedar Lake appealed this decision to an administrative law judge
(“ALJ”) and requested a hearing. After briefing, CMS moved for summary
judgment on the grounds that the undisputed facts presented by the parties
showed that Cedar Lake failed to take all reasonable steps to provide
Resident # 10 with supervision adequate to prevent her elopement in
violation of 42 C.F.R. § 483.25(h).1
1
The first ALJ assigned to hear the case, Jose A. Anglada, denied CMS’s motion for
summary judgment, but this decision was vacated by the second ALJ assigned to the case,
2
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No. 10-60112
In ruling on the motion for summary judgment, the ALJ considered
Cedar Lake’s main factual presentation: affidavits by two Cedar Lake
employees testifying that the alarm’s failure to sound upon Resident # 10's
departure was unforeseeable because the installation contractor had failed to
inform Cedar Lake that the alarm had been disconnected. Accepting this
testimony as true, the ALJ concluded that the remainder of the undisputed
facts showed that Resident #10's elopement was foreseeable and that Cedar
Lake did not reasonably provide Resident #10 with enough supervision to
prevent her wandering from the facility. See Cedar Lake Nursing Home,
D.A.B. No. CR1967, at 7-8 (June 24, 2009).
The ALJ’s findings of undisputed fact included the following: that
Resident #10 “had a history of wandering, was at high risk for elopement, and
repeatedly attempted to leave the facility”; that Cedar Lake’s care plan for
Resident #10 required staff to place the resident in an area “where constant
observation is possible”; and that the facility’s care plan amendments for
Resident # 10 included frequent observation in addition to the use of a door
alarm.2 Id. at 5-6. On the basis of these undisputed factual findings, the ALJ
determined that Cedar Lake failed to take all reasonable steps to prevent
Resident # 10's elopement in violation of 42 C.F.R. § 483.25(h). The ALJ,
thus, granted CMS’s motion for summary judgment and upheld the $5,000
per-instance civil monetary fine.
Carolyn Cozad Hughes, after the ALJ Anglada left the agency. All references to “the ALJ” are
to ALJ Hughes.
2
The ALJ considered Cedar Lake’s argument—which it repeats on this petition for
review—that facts derived from Cedar Lake’s internal, privileged documents cannot form the
basis for a summary judgment motion. But the ALJ concluded that enough of these
undisputed facts existed “wholly independent” of Cedar Lake’s purportedly privileged
documents to support summary judgment. Id. at 9-10.
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Cedar Lake appealed the ALJ’s grant of summary judgment to the
Departmental Appeals Board, which affirmed the ALJ’s decision. Cedar Lake
now seeks review in this Court.
II.
We have jurisdiction to review imposition of the civil monetary penalty
against Cedar Lake pursuant to 42 U.S.C. § 1320a-7a(e). See also 42 C.F.R. §
498.5(c); § 498.90(a)(1) (2010). Ordinarily, review of such an administrative
decision is conducted according to the deferential standards of the
Administrative Procedures Act (“APA”), which permits the setting aside of
agency actions, findings, and conclusions that are “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with the law” or
“unsupported by substantial evidence.” 5 U.S.C. §§ 706(2)(A)-(E) (2010); see
also Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994); Harris
County Hosp. Dist. v. Shalala, 64 F.3d 220, 221 (5th Cir. 1995).3
Petitioner, however, asserts that we should review this case de novo in
accord with Federal Rule of Civil Procedure 56 because the agency decided
the case on a motion for summary judgment without having an evidentiary
hearing. Petitioner cites a opinion from the Sixth Circuit in which the court
conducted de novo review of a summary judgment appealed through the same
DHHS process. See Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743,
750 (6th Cir. 2004). In that case, the Sixth Circuit applied de novo review
without expressly considering whether deferential review under the APA was
the more appropriate standard. Id. at 750.
Petitioner’s assertion that we should apply de novo review is ultimately
unavailing for the reasons discussed by Judge Posner in his recent opinion in
3
Similarly, 42 U.S.C. § 1320a-7a(e) states that “findings of the Secretary [of the DHHS]
with respect to questions of fact, if supported by substantial evidence on the record considered
as a whole, shall be conclusive.”
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No. 10-60112
Fal-Meridian, Inc. v. U.S. Dept. of Health and Human Services, 604 F.3d 445
(7th Cir. 2010). Fal-Meridian was an appeal, very similar to present one, in
which the DHHS Departmental Appeals Board approved summary judgment
imposing a $7,100 civil monetary penalty on a nursing home for violations of
42 C.F.R. § 483.25(h), the same regulation at issue here. Carefully
addressing the proper standard of review, Judge Posner wrote that “[t]he
absence of an evidentiary hearing does not alter the standard of judicial
review of administrative decisions, set forth in the Administrative Procedures
Act ....” Id. at 449-50. Judge Posner noted that giving heightened deference
to administrative decisions is appropriate, even on appeal from summary
judgment, because agencies have particular subject-matter experience and
expertise and “are given more decisional latitude by legislatures than trial
courts are . . . .” Id. This holding is consistent with opinions of other circuit
courts concerning judicial review of decisions made without evidentiary
hearings by agencies other than the DHHS. Id. at 449 (citing Gibson v. SEC,
561 F.3d 548, 552-53 (6th Cir. 2009); Martex Farms, S.E. v. E.P.A., 559 F.3d
29, 32 (1st Cir. 2009); Hasan v. U.S. Dep’t of Labor, 545 F.3d 248, 250-51 (3d
Cir. 2008); Cogeneration Ass’n v. FERC, 525 F.3d 1279, 1282-83 (D.C. Cir.
2008)).
We find Judge Posner’s reasoning in Fal-Meridian persuasive. Thus,
we review this petition consistent with the deferential standards of the APA,
5 U.S.C. §§ 706(2)(A)-(E).
III.
Reviewing the findings and conclusions at issue here under the
deferential standards of the APA, we do not consider them to be arbitrary,
capricious, not in accordance with the law, or unsupported by substantial
evidence.
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The ALJ determined that Cedar Lake’s actions with respect to Resident
# 10 were in violation of 42 C.F.R. § 483.25(h)(1)-(2), which require a nursing
facility to ensure that the resident environment remains as free of accident
hazards “as is possible” and that each resident receives “adequate supervision
and assistance devices to prevent accidents.” The standard of care imposed
by these “as is possible” and “adequate supervision” regulations has been
consistently interpreted by the DHHS and federal courts as a
“reasonableness” standard. See Fal-Meridian, 604 F.3d at 449; Crestview,
373 F.3d at 754; Woodstock Care Center v. Thompson, 363 F.3d 589-90 (6th
Cir. 2003); see also Kenton Healthcare, LLC, D.A.B. No. CR1666, at 5 (Sept.
28, 2007).
Based on specific, undisputed findings of fact, the ALJ determined and
the Departmental Appeals Board affirmed that Cedar Lake’s actions with
respect to Resident # 10 were not reasonable under the standard of 42 C.F.R.
§ 483.25(h), in that Cedar Lake did not take all reasonable steps to prevent
her from wandering out of the facility. The ALJ’s undisputed findings of fact
in support of this determination include not only the February 20, 2008
incident in which Resident # 10 wandered away from the facility, but also
Resident # 10's history of wandering, Cedar Lake’s prior knowledge of
Resident # 10's propensity to wander, and Cedar Lake’s previous development
of a care plan that involved frequent observation and other measures
designed to prevent Resident # 10 from wandering. See Cedar Lake Nursing
Home, D.A.B. No. CR1967, at 7-8 (June 24, 2009).
Moreover, the primary facts presented by Cedar Lake, even when taken
as true by the ALJ, failed to alter these core factual findings. Indeed, the ALJ
accepted as true Cedar Lake’s main factual presentation—affidavits by
employees testifying to the effect that the installation contractor did not
inform Cedar Lake that the alarm was to be turned off—but held that such
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facts did not show that Resident #10's elopement was unforeseeable nor
demonstrate that Cedar Lake’s actions were reasonable under 42 C.F.R. §
483.25(h). Id. at 7-8.
These findings and conclusions of the ALJ and the Departmental
Appeals Board with regard to the unreasonableness of Cedar Lake’s safety
and supervision measures under 42 C.F.R. § 483.25(h) are not arbitrary,
capricious, not in accordance to the law, or unsupported by substantial
evidence. Therefore, this petition for review is DISMISSED.
7