Our Lady of Victory Catholic Church and Our Lady of Victory Preschool v. DHS
153 A.3d 1124
| Pa. Commw. Ct. | 2016Background
- Our Lady of Victory Catholic Church operated a preschool serving 26 children without a Department of Human Services (DHS) certificate of compliance. DHS issued a cease-and-desist order directing petitioner to stop operating without the certificate.
- Petitioner timely appealed to DHS’s Bureau of Hearings and Appeals (BHA), asserting (1) DHS lacked authority to issue cease-and-desist orders to nonprofit child day care centers and (2) the certification requirement violated its religious freedom.
- A telephonic, non‑evidentiary hearing occurred; petitioner did not contest the underlying factual predicates (no certificate, ≥7 children) but requested an evidentiary hearing on the religious‑liberty claim. Counsel said he had not been put on notice to litigate religious claims at the telephonic hearing.
- The ALJ and BHA dismissed the appeal as legally insufficient, upholding DHS authority and rejecting the religious‑liberty claim as premature and facially insufficient; the Secretary denied reconsideration.
- The Commonwealth Court affirmed DHS’s authority to issue the cease‑and‑desist order but vacated the dismissal of the religious‑liberty defense and remanded for an evidentiary hearing limited to that defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DHS has authority under Article IX to issue a cease‑and‑desist order to nonprofit child day care centers operating without a certificate | DHS lacks express statutory authority; §911(c) limits enforcement to referral to Attorney General or withholding funds | Statutory supervisory and inspection powers, including §911(c)’s power to "direct" correction, implicitly authorize cease‑and‑desist orders | DHS has implied authority to issue cease‑and‑desist orders to enforce certificate requirement; upheld |
| Whether BHA had jurisdiction to hear the appeal of the cease‑and‑desist order | (Implicit) BHA lacked jurisdiction if DHS lacked authority | The cease‑and‑desist order is a Departmental decision affecting certificate status and admission, thus appealable under 55 Pa. Code §3270.12 | BHA had jurisdiction; petitioner’s procedural‑jurisdictional arguments were harmless dicta |
| Whether dismissal without an evidentiary hearing violated due process | Petitioner sought an evidentiary hearing, especially on religious‑liberty claims; facts relevant to burden were disputed | Only legal issues existed for the authority question; underlying facts (no certificate, ≥7 children) were undisputed | No evidentiary hearing required for the authority issue (legal); but dismissal of religious‑liberty defense without an evidentiary hearing was erroneous; remand for hearing limited to that defense |
| Whether the cease‑and‑desist order amounted to an unlawful regulation requiring compliance with rule‑making statutes | The order creates a binding norm and should have followed rule‑making procedures | The order enforces existing regulations (certificate requirement) and is not a new binding norm, so rule‑making statutes do not apply | Order enforced an existing regulation; not a new regulation, so compliance with rule‑making procedures was not required |
Key Cases Cited
- St. Elizabeth’s Child Care Center v. Dep’t of Pub. Welfare, 963 A.2d 1274 (Pa. 2009) (Supreme Court held DHS may require certificates of compliance for nonprofit day care centers and remanded religious‑liberty issue)
- Dep’t of Transp. v. Beam, 788 A.2d 357 (Pa. 2002) (agencies may have implied authorities necessary to effectuate express statutory mandates)
- Butler County Mushroom Farm v. Dep’t of Envtl. Res., 454 A.2d 1 (Pa. 1982) (statutory language can imply authority to issue corrective administrative orders)
- Aetna Cas. & Sur. Co. v. Ins. Dep’t, 638 A.2d 194 (Pa. 1994) (caution that certain statutory grants are not always sufficient to authorize cease‑and‑desist powers)
- Cumberland Coal Res., LP v. Dep’t of Envtl. Prot., 102 A.3d 962 (Pa. 2014) (administrative orders enforcing existing requirements do not become regulations requiring formal rule‑making)