644 S.W.3d 829
Ark. Ct. App.2022Background
- Hemp Health, LLC and Izard Health, LLC filed change-of-ownership applications with the Office of Long Term Care (OLTC) to transfer operational control and licensure of two skilled-nursing facilities; OLTC denied the applications in November 2019.
- Petitioners (Hemp and Izard) challenged the denial as arbitrary, capricious, and contrary to law and sought judicial review, declaratory relief, and injunctive relief; they relied on Ark. Code § 20-10-212 (status quo preserved pending appeal).
- DHS moved to dismiss as moot, asserting that the current licensee, Cathy Parsons, closed both facilities and voluntarily surrendered the long-term-care licenses, returning the beds to the Health Services Permit Agency.
- Appellants amended their petition with FOIA-obtained emails alleging DHS acted in bad faith and colluded with Parsons to accept license surrenders rather than preserve the status quo; appellants also said DHS refused other change-of-ownership applications.
- The circuit court allowed intervention by the building owners, found the licenses had been surrendered and no justiciable controversy remained, and dismissed the amended complaint as moot.
- The Arkansas Court of Appeals affirmed, concluding the surrender resulted from private business breakdown (Parsons/Brogdon/Luth), DHS could not force Parsons to keep the licenses, and any judicial remedy would be purely advisory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness — does a live controversy exist? | Appellants: denial review remains live because DHS violated the status-quo duty and accepted surrender to defeat appeal. | DHS: Parsons voluntarily closed and surrendered licenses; no controversy remains. | Held: Moot. Licenses no longer exist; judgment would have no practical effect. |
| Statutory duty to preserve status quo (Ark. Code § 20-10-212) | Appellants: OLTC was required to preserve status quo and could/should have refused surrender or taken other steps. | DHS: It preserved status quo by not approving other change-of-ownership apps; it could not force a nonparty (Parsons) to keep licenses. | Held: Statutory duty acknowledged but inapplicable because Parsons’ unilateral surrender ended licenses. |
| Alleged DHS bad faith/collusion and equitable relief | Appellants: FOIA emails show DHS acted duplicitously to enable surrender and undermine rights; DHS should not benefit from its bad acts. | DHS: Actions followed communications showing financial breakdown and voluntary surrender by Parsons; no evidence DHS forced the surrender. | Held: Court found surrender stemmed from private business issues, not DHS misconduct; bad-faith claim did not preserve justiciability. |
| Subject-matter jurisdiction | Appellants: circuit court lacked or mishandled jurisdictional aspects. | DHS: Not directly disputed once mootness established. | Held: Mootness makes jurisdiction question advisory; court declined to address it. |
Key Cases Cited
- Gillespie v. Brewer, 577 S.W.3d 59 (discussing mootness and avoidance of advisory opinions)
- Magness v. Graddy, 619 S.W.3d 878 (addressing appellate jurisdiction to hear appeals after dismissal)
- Jegley v. Picado, 80 S.W.3d 332 (describing de novo review for whether a justiciable issue exists)
- Orintas v. Point Lookout Prop. Owners Ass’n Bd. of Dirs., 476 S.W.3d 174 (refusing to consider arguments raised first in a reply brief)
- Arkansans for Healthy Eyes v. Thurston, 2020 Ark. 275 (courts will not issue advisory opinions, including on subject-matter jurisdiction)