315 Conn. 265
Conn.2015Background
- SecureCare Realty (owner) and iCare Management (manager) formed entities to develop and operate a nursing home on privately owned property in Rocky Hill under a state program authorized by Conn. Gen. Stat. § 17b-372a to house certain prisoners and DMHAS clients.
- The property is in a residential zone; the town alleges no special permits were sought and the prior nursing-home use had ceased before SecureCare purchased the site.
- The Department of Social Services/Correction/DMHAS issued an RFP requiring bidders to identify properly zoned sites; iCare represented it sought a properly zoned facility and that the state would be the primary referral/payment source.
- The parties signed a letter agreement and a start-up contract providing cost-based reimbursement, limited state reimbursement of some startup/closing costs, audit and reporting rights, indemnity and insurance obligations, and state payment of up to $50,000 in attorneys’ fees for litigation like this action.
- The town sued for declaratory and injunctive relief enforcing local zoning; defendants moved to dismiss claiming they are an "arm of the state" entitled to sovereign immunity and, alternatively, that § 17b-372a preempts local zoning.
- The trial court dismissed, finding defendants were an arm of the state under the Gordon factors and that § 17b-372a preempted local zoning; the Supreme Court reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants are an "arm of the state" entitled to sovereign immunity under the Gordon multifactor test | Not an arm of state: defendants lack creation-by-state, state functionary officers/employees, comprehensive state control, and are not financially dependent to the degree required | Are an arm of state: perform public function, financially dependent on state reimbursements and referrals, state monitoring and contractual ties support immunity | Reversed: defendants are not an arm of the state; Gordon factors, on balance, do not support sovereign immunity |
| Whether § 17b-372a expressly preempts municipal zoning | Legislature did not intend to preempt local zoning; the statute’s "notwithstanding" clause does not speak to municipal ordinances and statute contains narrower carve-outs | Statute’s broad "notwithstanding any provision" language shows intent to preempt local zoning over site selection/use | Reversed: § 17b-372a does not expressly or impliedly preempt local zoning; no irreconcilable conflict found |
| Whether the trial court properly decided immunity/preemption on the record without an evidentiary hearing | Plaintiff argued disputes existed (e.g., prior nonconforming use, facts relevant to Gordon) and sought discovery/hearing | Defendants argued undisputed documentary record sufficed for dismissal | Supreme Court: hearing not required because record conclusively established lack of arm-of-state status; dismissal on immunity/preemption grounds was erroneous |
| Proper scope of applying Gordon factors to newly formed contract entities | Plaintiff: analysis should consider limited statutory authorization to contract and lack of state creation/control | Defendants: statutory authorization and contract terms show sufficient state connection | Held: statutory authorization to contract cuts against arm-of-state finding; private entities created/operated independently are not automatically arms of the state |
Key Cases Cited
- Gordon v. H.N.S. Management Co., 272 Conn. 81 (Conn. 2004) (multifactor test to determine when private entity is an "arm of the state")
- Shay v. Rossi, 253 Conn. 134 (Conn. 2000) (rationale for sovereign immunity and functional interference concerns)
- Conboy v. State, 292 Conn. 642 (Conn. 2009) (procedural standards for resolving motions to dismiss challenging subject matter jurisdiction)
- Fresenius Medical Care Cardiovascular Resources, Inc. v. Puerto Rico & the Caribbean Cardiovascular Center Corp., 322 F.3d 56 (1st Cir. 2003) (caution against extending state immunity to private entities without clear legislative support)
- Del Campo v. Kennedy, 517 F.3d 1070 (9th Cir. 2008) (observations on courts’ reluctance to treat private contractors as state actors)