IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The Summit Academy, :
Petitioner :
: No. 257 C.D. 2015
v. :
: Submitted: September 4, 2015
Department of Human Services, :
Respondent :
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McCULLOUGH FILED: December 7, 2015
The Summit Academy (Facility), a private residential treatment center
for dependent and delinquent youth, petitions for review of the February 2, 2015 final
order of the Department of Human Services (Department), Bureau of Hearings and
Appeals (Bureau), adopting the recommendation of an Administrative Law Judge
(ALJ) that the Facility’s appeal from a license inspection summary (LIS) should be
dismissed for lack of jurisdiction. On appeal, the Facility contends that the
Department’s regulations and procedures governing the LIS violate due process.
Background
The facts and procedural history of this case are as follows. On October
17, 2014, a representative of the Department conducted an on-site inspection of the
Facility. At the conclusion of the inspection, the representative completed an LIS
listing two violations. The first violation concerned diagnosed injuries that a resident
sustained while being manually restrained by Facility employees. The second
violation involved the Facility’s inaccurate records as to the time-frame in which the
resident was restrained. (Reproduced Record (R.R.) at 3a-6a.)
More specifically, the LIS named the applicable regulations and
described the violations as follows:
1. Regulation 55 Pa. Code §3800
3800.32(b) – A child may not be abused, mistreated,
threatened, harassed or subject to corporal punishment.
2a. Description of Violation
Staff Member A manually restrained resident #1 on 10/8/14
around 8:30 p.m. on the facility’s third floor catwalk
resulting in the resident’s diagnoses of a closed rib fracture,
a left wrist injury, and a facial contusion.
* * *
1. Regulation 55 Pa. Code §3800
3800.213 – A record of each use of a restrictive procedure,
including the emergency use of a restrictive procedure, shall
be kept and shall include the following:
(2) The date and time the procedure was used . . .
(6) The duration of the procedure . . .
2a. Description of Violation
Resident #1 was manually restrained on 10/8/14 in the
cafeteria and minutes later was manually restrained on the
third floor catwalk. The restrictive procedure record for the
manual restraint in the cafeteria indicated that the restraint
began at 8:35 p.m. and ended at 8:40 p.m. and the
restrictive procedure record for the manual restraint on the
2
third floor catwalk indicated that the restraint began at 8:30
p.m. and ended at 8:35 p.m. The restrictive procedure
records do not accurately indicate the time of the manual
restraints.
(R.R. at 4a-5a.)
On November 26, 2014, the Department sent the Facility a letter with the
LIS enclosed. In pertinent part, the letter stated:
The Department requires that you submit an acceptable plan
to correct noncompliant items pursuant to 55 Pa. Code
§20.52 (relating to plan of correction). You should begin to
implement your plan immediately upon submission. The
Department will notify you if the plan you submit is not
acceptable and must be changed.
In order to submit an acceptable plan of correction, you
must complete Section 3 of the attached [LIS], by stating
the actions you will take to correct each of the violations.
Your plan of correction must immediately correct the
specific issue cited, as well as include an ongoing, step-by-
step plan to assure continued compliance with the
regulation over a substantial period of time. Your plan of
correction for each violation should include: what specific
change will be made, who will make the change, when will
the change be made, how will the change be made, what
system have you implemented to make sure that the same
violation will not occur again and what training will be
provided to your staff. Send any supporting documentation
to verify compliance of any corrected violation. If you
believe any violation is incorrect, you may say that in
your comments under Section 3 but you still must
include a plan to reach and maintain compliance. Sign
and date the bottom of each page of the [LIS].
Return the attached [LIS] within 10 calendar days of the
mailing date of this letter. Your license to operate the
above facility may be revoked if the [LIS] is not received
within the required time period. . . .
3
I am available to explain any statements on the attached
form and to assist you in the development of an acceptable
plan of correction. Thank you for your cooperation.
(R.R. at 1a-2a) (emphasis supplied).
On December 4, 2014, the Facility filed an appeal from the November
26, 2014 letter, asserting that the violations listed in the LIS were “unsubstantiated”
and could be used “in future enforcement actions.” (R.R. at 11a.) Specifically, the
Facility contended that the Department’s representative relied upon erroneous
information, and it asserted that a proper investigation would have revealed that the
resident hurt himself when he slipped and fell on a wet floor and that the length of
time the resident was restrained was recorded accurately. To support its contentions,
the Facility attached the affidavits of two of its employees. (R.R. at 9a-23a.) The
Facility further asserted that the Department’s failure to provide it “an avenue to
appeal these improper and unsubstantiated violations constitutes a violation of [the
Facility’s] due process rights.” (R.R. at 11a.)
On December 12, 2014, the Department acknowledged the Facility’s
request for appeal and forwarded it to the Bureau. The ALJ issued a rule to show
cause as to why the appeal should not be dismissed for want of jurisdiction, and both
the Facility and the Department filed responses. (R.R. at 24a-25a.)
In its response, the Facility contended that the November 26, 2014 letter
was an adjudication because the LIS could be used to take adverse action against the
Facility’s certificate of compliance; the Facility would have no recourse to challenge
the findings and violations in the LIS; and the failure to permit an appeal and hearing
violates the Facility’s right to procedural due process. In its response, the
Department argued that the LIS did not impose any sanction against the Facility or
immediately jeopardize its certificate of compliance; the Facility would have the right
to appeal in the event the Department would take action in the future based upon the
4
LIS; and case law establishes that notice of a regulatory violation (absent a sanction)
does not constitute an adjudication. (R.R. at 26a-35a.)
Upon consideration of the parties’ submissions, the ALJ recommended
that the Facility’s appeal be dismissed for failing to state a claim for which the
Bureau can grant relief. (R.R. at 37a.) On February 2, 2015, the Bureau issued an
adjudication and order upholding the ALJ. In doing so, the Bureau made the
following findings of fact:
1. [The Facility] is a residential juvenile facility.
2. On November 26, 2014, the Department mailed a
letter to [the Facility] which included a [LIS] that cited
violations of regulations relating to child residential and day
treatment facilities.
3. The November 26, 2014 letter required [the Facility]
to submit a plan of correction to address the cited violations
within ten (10) calendar days of the mailing date of the
letter.
4. The November 26, 2014 letter stated that failure to
submit a timely plan of correction may result in the
revocation of [the Facility’s] license to operate.
5. The November 26, 2014 letter stated, “If you believe
any violation is incorrect, you may say that in your
comments under Section 3 but you must still include a plan
to reach and maintain compliance.”
6. The November 26, 2014 letter did not propose to
deny, not renew, or revoke [the Facility’s] certificate of
compliance. It did not issue a provisional license, reduce
the maximum capacity of the facility or deny a request to
increase the maximum capacity of the facility.
7. On December 12, 2014, the Bureau received a
request for hearing from [the Facility] to dispute the [LIS]
5
findings because these findings may be used by the
Department in future enforcement actions.
8. On December 19, 2014, the Bureau issued an order to
show cause why [the Facility’s] appeal should not be
dismissed as it appears the Bureau does not have
jurisdiction.
9. On January 16, 2015, [the Facility] responded to the
Bureau’s order but the response failed to set forth a cause of
action for which the Bureau can grant relief.
(Findings of Fact (F.F.) at Nos. 1-9.)
From these facts, the Bureau determined that it lacked jurisdiction to
entertain the Facility’s appeal pursuant to the regulation at 55 Pa. Code §20.81, which
grants the right to appeal only when the Department denies, revokes, or decides not to
renew a certificate of compliance and for other reasons that are not pertinent to this
appeal.1 The Bureau stated that the November 26, 2014 letter did not revoke the
1
The regulation provides:
§ 20.81. Decisions that may be appealed.
The legal entity has the right to appeal any of the following:
(1) The denial of a certificate of compliance.
(2) The nonrenewal of a certificate of compliance.
(3) The revocation of a certificate of compliance.
(4) The issuance of a provisional certificate of compliance.
(5) The length of time for which a provisional certificate of
compliance is issued.
(6) The reduction in the maximum capacity of the facility or agency.
(Footnote continued on next page…)
6
Facility’s certificate of compliance and noted that it advised the Facility of its right to
explain why it believes the violations are incorrect. Ultimately, the Board concluded
that it did not possess jurisdiction to overturn findings in a LIS, but suggested that the
Facility would be able to challenge the findings if the Department would decide, in
the future, to take adverse action against the Facility’s certificate of compliance.
(Bureau’s decision at 2-3.)
Discussion
On appeal to this Court,2 the Facility argues that the violations listed in
the LIS are baseless and that it should not have to submit a plan of correction. The
Facility concedes that 55 Pa. Code §20.81 does not grant it the right to appeal, but
argues that the regulation, as applied, violates its due process rights because the
Facility is not afforded an appeal and hearing to contest the violations in the LIS.
For support, the Facility cites Department of Transportation, Bureau of Driver
Licensing v. Clayton, 684 A.2d 1060 (Pa. 1996), and claims that the effect of an LIS
is to create an impermissible, irrebutable presumption that it committed the
(continued…)
(7) The denial of an increase in the maximum capacity of the facility
or agency.
55 Pa. Code §20.81.
2
Our scope of review is limited to determining whether constitutional rights were violated,
whether the adjudication is in accordance with the law, and whether necessary findings of fact are
supported by substantial evidence. Nancy Hadlock’s Family Child Care Home v. Department of
Public Welfare, 103 A.3d 851, 857 n.12 (Pa. Cmwlth. 2014).
7
violations.3 Noting that the LIS is made available to the public on the Department’s
website,4 the Facility also argues that a Pennsylvania citizen has a fundamental right
to protect the individual’s reputation and that this right cannot be deprived without
due process of law. In this regard, the Facility relies primarily on our decision in
Pennsylvania Bar Association v. Commonwealth, 607 A.2d 850 (Pa. Cmwlth. 1992).
The Regulations
The regulations at 55 Pa. Code §§3800.1—.312 govern child residential
facilities in this Commonwealth, such as the Facility. The purpose of the regulations
“is to protect the health, safety and well-being of children receiving care in a child
residential facility through the formulation, application and enforcement of minimum
licensing requirements.” 55 Pa. Code §§3800.1. In general, the regulations cover a
multitude of subjects; for instance, child rights, staff training, the safety of the
facility, child and staff health, transportation, medication, restrictive procedures, and
secure detention. See generally 55 Pa. Code §§3800.1—.312. As a licensing matter,
a child residential facility must obtain and maintain a certificate of compliance from
the Department. See 55 Pa. Code §3800.11.
The Department’s regulations define a “certificate of compliance” as a
“document issued to a legal entity permitting it to operate a specific type of facility or
3
In Clayton, a regulation provided for the revocation of an individual’s driving privileges
for one year upon the occurrence of an epileptic seizure. Our Supreme Court declared that the
regulation was unconstitutional as violating due process. Significantly, the aggrieved individual
had no method of rebutting the regulation’s presumption that the seizure rendered him unfit to
drive.
4
See http://services.dpw.state.pa.us/dhs/ViolationReport.aspx?reportid=47204&fac=THE
SUMMIT ACADEMY
8
agency, at a given location, for a specified period of time, and according to
appropriate Departmental program licensure or approval regulations.” 55 Pa. Code
§20.4. To ensure compliance with the regulations, an authorized agent of the
Department can conduct a pre-announced annual inspection and unannounced on-site
inspections, and can investigate complaints made against a facility. 55 Pa. Code
§§20.31—.33. If the agent observes items of noncompliance, an LIS will be issued to
the facility, and, in response, the facility “shall submit an acceptable written plan to
correct each noncompliance item and shall establish an acceptable period of time to
correct these items.” 55 Pa. Code §20.52. The Department may deny, refuse to
renew, or revoke a certificate of compliance when a facility fails “to submit an
acceptable plan to correct noncompliance items.” 55 Pa. Code §20.71(3). If the
Department decides to revoke or not renew a certificate of compliance, a facility has
the right to an appeal and evidentiary hearing before an ALJ and the Bureau. 55 Pa.
Code §§20.81(2)-(3); 20.82; 3800.12. See City of Philadelphia, Board of License and
Inspection Review v. 2600 Lewis, Inc., 661 A.2d 20, 22 (Pa. Cmwlth. 1995).
Due Process
The Fourteenth Amendment to the United States Constitution provides,
in relevant part, that no “State [shall] deprive any person of life, liberty, or property,
without due process of law.” U.S. Const. amend. XIV, §1. To maintain a due
process challenge, a party must initially establish the deprivation of a protected
property or liberty interest. Miller v. Workers’ Compensation Appeal Board (Pavex,
Inc.), 918 A.2d 809, 812 (Pa. Cmwlth. 2007).
9
Our Supreme Court “has recognized that the right to reputation, although
absent from the federal constitution, is a fundamental right under the Pennsylvania
Constitution.” In the Interest of J.B., 107 A.3d 1, 16 (Pa. 2014).
[I]n Pennsylvania, reputation is an interest that is
recognized and protected by our highest state law: our
Constitution. Sections 1 and 11 of Article I[5] make explicit
reference to ‘reputation,’ providing the basis for this Court
to regard it as a fundamental interest which cannot be
abridged without compliance with constitutional standards
of due process. . . .
R. v. Department of Public Welfare, 636 A.2d 142, 149 (Pa. 1994).
In Pennsylvania Bar Association, this Court invalidated, on procedural
due process grounds, section 1822(b)(5) of the Vehicle Code, 75 Pa.C.S. §1822(b)(5),
which required insurers to report suspected fraudulent claims to a statutorily created
Motor Vehicle Fraud Index Bureau, along with “[i]dentification of attorneys
representing claimants” in such claims. 607 A.2d at 852. In that case, the
Pennsylvania Bar Association commenced suit in our original jurisdiction, asserting,
among other things, that maintaining a list of the attorneys’ names would operate to
damage their reputations in violation of their constitutional right to protect their
reputations.
Citing Wolfe v. Beal, 384 A.2d 1187, 1189 (Pa. 1978), this Court in
Pennsylvania Bar Association noted that our Supreme Court had already recognized
5
Pa. Const. art. I, §1 (“All men are born equally free and independent, and have certain
inherent and indefeasible rights, among which are those of enjoying and defending life and liberty,
of acquiring, possessing and protecting property and reputation, and of pursuing their own
happiness.”); Pa. Const. art. I, §11 (“All courts shall be open; and every man for an injury done him
in his lands, goods, person or reputation shall have remedy by due course of law, and right and
justice administered without sale, denial or delay. Suits may be brought against the Commonwealth
in such manner, in such courts and in such cases as the Legislature may by law direct.”).
10
that the existence of government records, specifically records of an individual’s
illegal commitment to a state mental hospital, posed a “threat” to that individual’s
reputation. 607 A.2d at 853-54. We then agreed with the Pennsylvania Bar
Association “that the maintenance of a list which includes the names of attorneys
representing insurance claimants suspected of fraud . . . poses a serious threat to the
reputations of [the attorneys], as discussed in Wolfe.” 607 A.2d at 856. After
determining that the attorneys were entitled to protection under the due process
clause, we concluded that the statute’s failure to provide notice to the attorneys that
they were being placed on the list rendered the statute unconstitutional:
Yet, disturbingly, the reporting requirements in 75 Pa.C.S.
§1822(b) pertaining to the anti-fraud reports provide for no
notification to the attorneys when their names are listed in
the Index Bureau’s record banks.
The Supreme Court of the United States has recognized that
notice is the most basic requirement of due process. Notice
is necessary both to inform the interested parties of the
pending action and to provide an opportunity to present
objections. . . . An attorney may appear on the list, and be
subject to negative stigmatization, because the insurer has a
suspicion about the client due to previous actions unknown
to the attorney. By the time the listing is brought to the
attorney’s attention, the damage to the attorney’s reputation
may have been done, and he or she may have lost the
opportunity to be heard at a meaningful time and in a
meaningful manner . . . .
We find Section 1822 to be unconstitutional inasmuch as it
requires the maintenance of records containing the names of
attorneys who represent insurance claimants suspected of
fraud because such a scheme ignores the basic due process
requirement of notice, and permits the compilation of secret
records that tend to unfairly stigmatize an attorney who is
reported to the Index Bureau without any opportunity for
the attorney to raise an objection to such listing, or even
become informed that such a listing will occur.
11
607 A.2d at 856-57 (citations omitted).
Per Pennsylvania Bar Association, if an individual’s liberty interest in
reputation is sufficiently “threatened,” the individual possessing the interest is
entitled to some method of due process. See id. More specifically, procedural due
process calls for protections tailored to the demands of the particular situation,
making it necessary to balance competing interests. R., 636 A.2d at 146. The three-
part inquiry set forth in Mathews v. Eldridge, 424 U.S. 319 (1976), provides guidance
in this regard. The Mathews analysis requires a court to consider the private interest
affected by the official action; the risk of an erroneous deprivation of that interest
through the procedures used, as well as the probable value of additional safeguards;
and the Government’s interest, including the administrative burden that additional
procedural requirements would impose. R., 636 A.2d at 146.
The United States Supreme Court has stated: “when prompt
postdeprivation review is available for correction of administrative error, we have
generally required no more than that the predeprivation procedures used be designed
to provide a reasonably reliable basis for concluding that the facts justifying the
official action are as a responsible governmental official warrants them to be.”
Mackey v. Montrym, 443 U.S. 1, 13 (1979). The High Court has also “recognized, on
many occasions, that where a State must act quickly, or where it would be impractical
to provide predeprivation process, postdeprivation process satisfies the requirements
of the Due Process Clause.” Gilbert v. Homar, 520 U.S. 924, 930 (1997). See
Zinermon v. Burch, 494 U.S. 113, 132 (1990) (stating that “in situations where a
predeprivation hearing is unduly burdensome in proportion to the liberty interest at
stake . . . post-deprivation remedies might satisfy due process.”). The United States
Court of Appeals for the Third Circuit has further explained that “the availability and
12
validity of any pre-deprivation process must be analyzed with reference to the context
of the alleged violation and the adequacy of available post-deprivation procedures.”
Reilly v. City of Atlantic City, 532 F.3d 216, 236 (3d Cir. 2008).
For purposes of this appeal, we assume that publication of the LIS and
the violations on the internet for the public to view has a sufficient and adverse effect
or “threat” on the Facility’s reputational interests to implicate due process concerns.
See Pennsylvania Bar Association, 607 A.2d at 856-57.6 Nonetheless, the LIS
contains sufficient and detailed notice of the violations, and before the LIS is posted
on the internet, the Department provides the Facility with the opportunity to protect
its reputational interests. Particularly, the Facility can contest the violations by
making comments in section 3 of the LIS, which is also posted on the internet and
made available to the public. (F.F. at No. 5; R.R. at 1a-2a.) This predeprivational
process is much more extensive than that in Pennsylvania Bar Association, where the
attorneys were not even provided notice.
Because the Facility is afforded adequate notice and an opportunity to
respond in writing, Pennsylvania Bar Association is distinguishable and is not
dispositive authority on the present issue. Moreover, this Court in Pennsylvania Bar
Association was primarily concerned that the lack of notice deprived the attorneys of
the opportunity “to raise an objection to [the] listing.” 607 A.2d at 857. For the
reasons discussed below, we conclude that at this stage of the regulatory procedure,
where the Facility’s certificate of compliance is not being revoked (i.e., the
predeprivation stage), the opportunity to contest the violations in writing, in and of
6
We also assume, without deciding, that the Facility, as a business entity, possesses the right
to reputation in the same manner that an individual citizen does.
13
itself, is sufficient to preserve the Facility’s right of reputation and minimize any
“threat” to its reputation.
Indeed, in cases concerning the discharge of a public tenured employee,
which often involve allegations of improper or criminal conduct, it has been held that
pre-termination notice and an opportunity to respond in writing is enough to comport
with due process. See, e.g., Pavonarius v. City of Allentown, 629 A.2d 204, 207 (Pa.
Cmwlth. 1993) (discussing Cleveland Board of Education v. Loudermill, 470 U.S.
532, 545-46 (1985)); accord Matter of Richie v Coughlin, 148 A.D.2d 178, 183 (NY
App. Div., 3d Dept. 1989). In Pavonarius, this Court stated: “Only a meeting with
the employer or a written notice sent by the employer to the employee setting forth
the reasons for her termination and requesting the employee to respond in writing to
the allegations is necessary to satisfy the [tenured employee’s] basic due process
rights.” 629 A.2d at 207. The reason for this rule is that the predeprivation phase
serves as “an initial check against mistaken decisions – essentially, a determination of
whether there are reasonable grounds to believe that the charges . . . are true and
support the proposed action.” Loudermill, 470 U.S. at 545-46.
In cases analogous to the present scenario, the federal circuit courts of
appeals have also concluded that notice and an opportunity to respond in writing
satisfied the predeprivation prong of due process.
In Agility Defense & Government v. United States Department of
Defense, 739 F.3d 586 (11th Cir. 2013), the United States Court of Appeals for the
Eleventh Circuit concluded that government contractors had a liberty interest in not
having stigmatizing allegations disseminated or publicized; this liberty interest was at
stake when the agency suspended the contractors for multiple years due to an
indictment for fraud; yet, the contractors were afforded procedural due process by
14
virtue of the fact that the contractors received notice of the suspension and had an
opportunity to respond in writing. The court explained:
[E]ven assuming that the suspension of the [contractors]
deprived them of their liberty, the regulation does not
violate the Due Process Clause because it contains
constitutionally adequate procedures. An agency must
immediately notify a suspended affiliate of its suspension
by certified mail. 48 C.F.R. §9.407-3(c). That notification
includes the basis of the suspension and advises the affiliate
of its opportunity to respond in writing. Id. These
procedures – notification and an opportunity to respond –
are constitutionally adequate procedures for multiyear
suspensions.
Id. at 591.
In Northlake Community Hospital v. United States, 654 F.2d 1234 (7th
Cir. 1981), the United States Court of Appeals for the Seventh Circuit addressed a
hospital’s claim that it had been denied due process because its Medicare provider
agreement was terminated prior to a hearing. In that case, the Department of Health
and Human Services conducted several inspection visits and provided the hospital
with notices of deficiencies, outlining the hospital’s noncompliance with
administrative regulations. In turn, the hospital had the opportunity to respond in
writing to the notices and was given a grace period to correct the deficiencies. When
the hospital failed to correct the deficiencies, the Department sent notice to the
hospital that its Medicare provider agreement was terminated. The hospital then filed
suit, alleging that the pre-termination procedures did not conform with procedural due
process. The court disagreed, concluding that notice and an opportunity to respond in
writing fulfilled the requirements of due process.
Similarly, in Town Court Nursing Center v. Beal, 586 F.2d 266 (3d Cir.
1978) (en banc), the Secretary of the Department of Health and Human Services
15
decided not to renew a nursing home’s Medicaid provider agreement based upon
regulatory violations found by health care inspectors. The Third Circuit concluded
that the nursing home was only entitled to notice and an opportunity to respond prior
to the non-renewal. In pertinent part, the court stated:
[T]he decision not to renew a provider agreement is an
easily documented, sharply focused decision in which
issues of credibility and veracity play little role. It is based
in most cases upon routine, standard, unbiased reports by
health care professionals. Those professionals evaluate the
provider in light of well-defined criteria that were
developed in the administrative rule-making process.
Written submissions are adequate to allow the provider to
present his case. Given the extensive documentation that
the provider is able to submit in response to the findings of
the survey teams, the provider is unlikely to need an
evidentiary hearing in order to present his position more
effectively.
Id. at 277.
The reasoning and conclusions of the above cases apply here with equal
force. The Department’s agents are presumed to have conducted their inspections in
good faith and in accordance with the law, Office of Governor v. Donahue, 98 A.3d
1223, 1239 (Pa. 2014); the regulations are relatively straightforward and lacking
discretionary factors or standards; and the LIS constitutes reasonable grounds to
believe that the violations were committed. In terms of the LIS, section 3 is located
directly beneath the “Description of Violation” section, and the Facility is permitted
to state in this section any and all reasons why it believes a violation is incorrect and
also to “attach pages as necessary.” (See R.R. at 1a, 4a, 15a.) Ultimately, by
affording the Facility with the initial opportunity to dispute the violations in writing,
the Department has provided the Facility with the ability to adequately protect its
16
reputation by responding to allegations concerning its operations. Therefore, we
conclude that this predeprivation procedure comports with due process.
The Facility, nevertheless, takes issue with the fact that it must file a
plan of correction after receiving the LIS and the Department may revoke its
certificate of compliance if the plan submitted is not acceptable. At the outset, this
Court is mindful of its duty to interpret a regulation in a constitutional manner if that
is reasonably possible. See Bricklayers of Western Pennsylvania Combined Funds,
Inc. v. Scott’s Development Co., 90 A.3d 682, 692 (Pa. 2014).
Notwithstanding the Facility’s arguments, there is nothing in the
regulations that prohibit the Facility from maintaining its position and stating on its
plan of correction that no plan is needed because no violations have occurred. In
such a situation, the Department will be forced to consider the Facility’s written
response to the LIS to determine whether the proposed plan of correction is
“acceptable.” 55 Pa. Code §20.52. If the Department decides that the plan is not, the
Department may revoke the Facility’s certificate of compliance. 55 Pa. Code
§§20.71(3). Conversely, upon review of the written response, the Department may
decide that the violations are not properly supported, and the regulations do not
prohibit the Department from retracting or rescinding the LIS. In the event the
Department revokes the certificate of compliance, the Facility will have the
opportunity to appeal, and it will receive a full-blown postdeprivation evidentiary
hearing before an ALJ and the Bureau, along with the right to seek further appellate
review in this Court and the Supreme Court. See generally Millcreek Manor v.
Department of Public Welfare, 796 A.2d 1020, 1028-30 (Pa. Cmwlth. 2002)
(discussing the requirements for a full, de novo evidentiary hearing before an ALJ);
see also Rogers v. Pennsylvania Board of Probation & Parole, 724 A.2d 319, 321-22
17
(Pa. 1999). Although the Department’s regulations are silent on the latest matter, we
must interpret them as allowing the Facility to litigate and contest alleged violations
at a revocation hearing based upon an unacceptable plan of correction, or at any
hearing where violations, both past and present, form the underlying basis (or part of
the basis) for nonrenewal or revocation.
When the regulations are interpreted in this manner, the traditional
administrative hearing and subsequent judicial review are more than adequate to
satisfy the postdeprivation demands of due process. This procedure provides the
Facility with a full and fair opportunity to vindicate its reputation and establish that
the LIS is incorrect and/or that it did not violate the Department’s regulations.
In Department of Public Welfare v. Eisenberg, 454 A.2d 513 (Pa. 1982),
the Department suspended a doctor from participating in a welfare program based on
allegations that the doctor maintained inadequate documentation and billed for
unnecessary medical services. In the notice of suspension, the Department advised
the doctor of his right to appeal to the Bureau. This Court held that the Department’s
procedures violated due process by failing to provide the doctor with a predeprivation
hearing. On appeal, our Supreme Court reversed, concluding that due process was
satisfied because the Department provided the doctor with a postdeprivation hearing.
Significantly, our Supreme Court determined that “no pre-termination hearing is
required” and that the doctor’s “due process right has been met by a full
administrative hearing accorded to [the doctor] before the [Bureau.]” Id. at 516
(citations omitted). See also Cohen v. City of Philadelphia, 736 F.2d 81, 86 (3d Cir.
1984); accord Bello v. Walker, 840 F.2d 1124, 1127-28 (3d Cir. 1988).
In Segal v. City of New York, 459 F.3d 207 (2d Cir. 2006), the
government employer terminated an employee for inflicting corporal punishment
18
upon a student under her care and supervision. The court concluded that this
allegation constituted a stigmatizing statement about the employee, calling into
question her good name, reputation, and integrity, and that the employee was entitled
to procedural due process. After balancing the employee’s reputational interests and
the employer’s interest in making quick personnel decisions, the court concluded that
a predeprivation hearing was not required and that a postdeprivation hearing was
sufficient:
Although a pre-termination hearing would provide [the
employee] with the opportunity to refute any stigmatizing
statements prior to her entry into the job market, such a
hearing comes at too high a cost to the government. The
government’s important interests – in both explaining its
employment decisions and exercising its right to terminate
an at-will employee immediately – would be unduly
impaired if we were to require a pre-termination hearing in
such circumstances. . . .
[T]he government is simply required to provide [the
employee] with an opportunity to salvage her name. In our
view, there is no reason to believe that this limited right – a
meaningful opportunity to clear one’s name – cannot be
adequately vindicated at a reasonably prompt, post-
termination name-clearing hearing.
Id. at 216-17 (citations omitted).
Finally, in González-Droz v. González-Colón, 660 F.3d 1 (1st Cir. 2011),
the Puerto Rico Board of Medicine determined that a doctor was engaged in the
illegal practice of medicine that posed a risk of harm to patients and suspended the
doctor’s medical license pending a hearing. Having no opportunity to respond to the
suspension notice prior to the hearing, the doctor filed a complaint, contending that
the lack of a predeprivation hearing violated his due process rights. The United
States Court of Appeals for the First Circuit disagreed, reasoning as follows:
19
[W]e conclude that a prompt post-deprivation hearing was
constitutionally adequate.
In working this calculus, we give great weight to the
proposition that when the state reasonably determines that a
license-holder poses a risk to patient safety, pre-deprivation
process typically is not required. In these circumstances,
moreover, the need for a pre-deprivation hearing is further
diminished by the state’s strong interest in upholding the
integrity of a state-licensed profession. The Board’s
concern that [the doctor] “may harm patients” because he
lacks the “training required by the [regulation] to carry out
such procedures” provided a sufficient basis for a founded
conclusion that no pre-deprivation hearing was
constitutionally compelled.
Neither the possible risk of an erroneous deprivation nor the
possible benefit of additional safeguards shifts the balance.
Especially in cases involving public health and safety and
the integrity of professional licensure, the force of these
factors is significantly diminished by the ready availability
of prompt post-deprivation review.
Id. at 14 (citations, brackets, and most quotations omitted).
Eisenberg, Segal and González-Droz collectively establish that when an
individual is deprived of a reputational interest, a postdeprivation administrative
hearing to refute the allegations typically satisfies the demands of procedural due
process.
Here, the Department and the Commonwealth have an overwhelming
interest in ensuring that prompt action is taken when an agent observes that a licensed
child residential treatment center has violated the Department’s regulations. See also
Northlake Community Hospital, 654 F.2d at 1242. Through legislative delegation,
the Department has determined that any violation of the regulations threatens the
safety and health of children. See 55 Pa. Code §3800.1. Given the circumstances of
this case, a predeprivation hearing is not necessary and a postdeprivation hearing
20
fulfills the requirements of due process. See also Lossman v. Pekarske, 707 F.2d 288,
291 (7th Cir. 1983) (“[T]here is no denial of due process in refusing to grant a full
adversary hearing before taking away property or liberty, so long as such a hearing is
provided later . . . and there is justification for the delay. When a child’s safety is
threatened, that is justification enough for action first and hearing afterward.”). Our
interpretation of the regulations above mandates that such a procedure be available to
the Facility.
* * *
On one hand, the Department and the Commonwealth have a paramount
interest, when compared to the Facility’s asserted interest, in ensuring the health and
safety of dependent and delinquent children who reside in a child residential
treatment center. It would be unduly burdensome to compel the Department to
conduct an evidentiary hearing for every violation in an LIS before requiring a
facility to take remedial action. As noted above, a facility has the right to dispute the
violations in the LIS and is free to assert its compliance in its plan of correction.
True, in doing so, the Facility may risk the revocation of its certificate of compliance,
but it will nonetheless receive the full panoply of due process protection that goes
along with a prompt, administrative evidentiary hearing and subsequent judicial
review. In the event the Facility opts instead to submit a suitable plan of correction,
and the violations in the LIS are used in the future as a basis for revocation or
nonrenewal, the Facility will have same opportunity to challenge the validity of the
initial violations. Regardless of any delay or length of time that may pass from when
the Facility affirmatively decides to challenge the violations at a revocation or
nonrenewal hearing, the fact that there is a comprehensive and adequate procedural
21
mechanism available to it suffices for purposes of due process. See United States v.
Eight Thousand Eight Hundred & Fifty Dollars ($8,850) in United States Currency,
461 U.S. 555, 568-69 (1983); Midnight Sessions, Ltd. v. City of Philadelphia, 945
F.2d 667, 682 (3d Cir. 1991).
On the other hand, we have assumed that the Facility has a liberty
interest in its reputation and that this interest may be impaired if an unfounded LIS is
publicized. Given the procedural safeguards detailed above, this interest is
adequately protected at all stages of the regulatory process because the Facility will
eventually have the opportunity to contest a violation at an administrative hearing and
seek judicial review. See Nnebe v. Daus, 644 F.3d 147, 159 (2d Cir. 2011). On this
note, the Facility’s reliance on Clayton and the irrebutable presumption doctrine is
misplaced. Any presumption concerning an alleged violation is not conclusive, and,
under the regulatory scheme, the Facility has the opportunity to disprove the
violation. See In the Interest of J.B., 107 A.3d at 37 (stating that a presumption is not
irrebuttable when the party has the opportunity to rebut or contest the validity of the
presumption); Commonwealth v. Aziz, 724 A.2d 371, 374-75 (Pa. Super. 1999)
(same). In the meantime, the Facility’s ability to respond to and contest the violations
in writing is enough to protect its reputational interests from being unnecessarily
impaired until adverse action is taken against the certificate of compliance and the
Facility challenges the violations at an evidentiary hearing before the ALJ and the
Bureau. Therefore, we conclude that the Facility’s due process rights have not been
violated.
22
Any argument that the LIS is an appealable adjudication is waived
Before concluding, we note that in its principal brief, the Facility does
not argue that it has a statutory right to appeal. Therefore, this argument is waived.
Jimoh v. Unemployment Compensation Board of Review, 902 A.2d 608, 611 (Pa.
Cmwlth. 2006). For the first time in its reply brief, the Facility suggests that the LIS
constituted an “adjudication” under the Administrative Agency Law, 2 Pa.C.S.
§§501-508, 701-704. However, “Pennsylvania Rule of Appellate Procedure 2113(a)
precludes an appellant from raising a new issue in a reply brief.” Borough of
Glendon v. Department of Environmental Resources, 603 A.2d 226, 258 (Pa.
Cmwlth. 1992).
In any event, an “adjudication” is defined as: “[A]ny final order, decree,
decision, determination or ruling by an agency affecting personal or property rights,
privileges, immunities, duties, liabilities or obligations of any or all of the parties to
the proceedings in which the adjudication is made.” 2 Pa.C.S. §101. Although the
Facility maintains that the letter was a “final decision,” our analysis above establishes
that subsequent procedural avenues are available to the Facility to contest the
violations in the LIS. See Citizens Coal v. Department of Environmental Protection,
110 A.3d 1051, 1059 n.15 (Pa. Cmwlth. 2014) (collecting cases and stating that a
letter informing a coal company that it must compensate the Commonwealth was not
an adjudication where the letter was merely “one step in a continuing multi-step
process”).
Moreover, in Sunbeam Coal Corp. v. Department of Environmental
Resources, 304 A.2d 169 (Pa. Cmwlth. 1973), an administrative inspector issued a
coal company notices of violations following an inspection of the premises. The
statutory scheme provided the coal company with thirty days to correct the violations;
23
if the coal company failed to make the corrections, the agency, after a hearing, could
suspend its license or issue a cease and desist order until the coal company came into
full compliance. In Sunbeam Coal Corp., the coal company attempted to file an
immediate appeal upon receiving the notices of violations. However, this Court
dismissed the appeal, holding that “[c]learly, . . . the notices here were not
adjudications[.]” Id. at 171. See also NHS Human Services of PA v. Department of
Public Welfare, 985 A.2d 992, 993-96 (Pa. Cmwlth. 2009); Fiore v. Department of
Environmental Resources, 510 A.2d 880, 881-83 (Pa. Cmwlth. 1986).
Because the Facility waived any argument that the LIS is an appealable
adjudication, we need not determine whether our holding in Sunbeam Coal Corp. is
applicable in this case.
Conclusion
After considering the private and governmental interests at stake, as
required by Mathews and R., we conclude that the predeprivation and postdeprivation
procedures explained above comport with the due process clauses of the United
States and Pennsylvania Constitutions. We further conclude that the Facility waived
any argument that the LIS constitutes an appealable adjudication under the
Administrative Agency Law. Accordingly, we affirm the Bureau’s February 2, 2015
order.
As a final matter, after considering the application to strike brief filed by
the Facility, it is denied.
________________________________
PATRICIA A. McCULLOUGH, Judge
24
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The Summit Academy, :
Petitioner :
: No. 257 C.D. 2015
v. :
:
Department of Human Services, :
Respondent :
ORDER
AND NOW, this 7th day of December, 2015, the February 2, 2015
order of the Department of Human Services, Bureau of Hearings and Appeals, is
affirmed.
The application to strike brief filed by Summit Academy is denied.
________________________________
PATRICIA A. McCULLOUGH, Judge