BRADBURY MEMORIAL NURSING HOME v. TALL PINES MANOR ASSOCIATES and Department of Human Services.
Supreme Judicial Court of Maine.
Decided Dec. 18, 1984.
Argued Sept. 19, 1984.
II.
Finally, the plaintiff contends that the Superior Court erred in finding that the Commission made sufficiently specific findings of fact, as required by
Plaintiff bore the burden of convincing the Commission that his belief that UM had conditioned its employment offer was reasonable. See Kilmartin v. Maine Employment Security Commission, 446 A.2d 412, 414 (Me.1982). As we have noted, plaintiff himself presented conflicting evidence on this issue. In its decision, which was affirmed and adopted by the Commission, the Appeal Tribunal specifically stated that it could not accept plaintiff‘s conclusion that UM‘s offer of employment was conditioned on him dropping his grievance claims. The Appeal Tribunal also specifically found that the plaintiff acted hastily in leaving his job.
The entry is:
Judgment affirmed.
All concurring.
Edward E. White, Jr., Asst. Atty. Gen., Dept. of Human Services (orally), Augusta, Preti, Flaherty & Beliveau by John P. Doyle, Jr. (orally), Estelle A. Lavoie, Portland, for defendants.
Before McKUSICK, C.J., and ROBERTS, VIOLETTE, WATHEN, GLASSMAN and SCOLNIK, JJ.
McKUSICK, Chief Justice.
On this appeal Bradbury Memorial Nursing Home (“Bradbury Memorial“), the operator of a nursing home in Belfast, attacks the validity of a certificate of need (“CON“) granted by the Maine Department of Human Services to Tall Pines Manor Associates (“Tall Pines“) to build a 70-bed nursing home in that city. The Superior Court (Kennebec County) denied the appeal and so do we.
The Maine Certificate of Need Act of 1978,
On April 22, 1982, the Department amended its 1978 regulations to designate Belfast a priority area for the construction of up to 70 additional nursing home beds. The 1982 amendments also set forth procedures for the filing of applications for the required CON and for the Department‘s review of competing applications. Prior to the deadlines for filing applications for a CON for the development of the additional nursing home beds in Belfast, Tall Pines and two other firms submitted the documentation necessary to qualify as applicants. The other two Belfast applicants were Bradbury Manor Associates (“BMA“), which proposed to buy and renovate the existing nursing home of Bradbury Memorial and to expand it by 30 beds, and Northport Associates (“Northport“), which like Tall Pines proposed to build a new 70-bed facility in Belfast.
Pursuant to the 1982 amendments, the Department would notify an applicant whether its application was complete or needed to be supplemented. Those amendments stated that “[w]here additional information is required, applicants shall submit completed applications no later than August 10, 1982.” All completed applications filed by August 10, 1982, were to be reviewed competitively in a review cycle beginning August 1, 1982. If only one timely letter of intent or application was filed, the Department could begin its review at any time after the application was complete. If an application did not meet the August 10 deadline, it was to be placed in a review cycle beginning on the 15th of each month (the first such cycle beginning August 15, 1982). Finally,
After the Department found that none of the three competing Belfast applicants had met the August 10, 1982, deadline, all three supplemented their applications to the Department‘s satisfaction. The Department then placed the three applications in a review cycle beginning on October 15, 1982 (and ending 150 days later—by the Department‘s calculation, on March 13, 1983). In December 1982, following its review of the competing applications pursuant to
While the Department was considering the pending applications, the Kennebec County grand jury indicted Northport‘s principal sponsor for crimes allegedly committed in the operation of a nursing home. On February 11, 1983, a staff member of the Department expressed concern that a “related party” problem existed in BMA‘s plans to buy Bradbury Memorial; a one-third owner of Bradbury Memorial was the proposed administrator of the new expanded institution to be created by BMA. If the proposed purchase was a “related party transaction,” BMA would be ineligible for Medicaid reimbursement for the purchase price, and the financial feasibility of the BMA‘s application would be thrown in doubt. By letter dated March 4, 1983, BMA withdrew its CON application. On April 4, 1983, the Department granted a CON to defendant Tall Pines and denied the application of Northport.
On April 25, 1983, plaintiff Bradbury Memorial, which had previously had no part in the administrative proceeding, filed with the Department a petition for reconsideration pursuant to
Plaintiff Bradbury Memorial then filed a complaint in the Superior Court seeking declarative and injunctive relief and review of final agency action pursuant to
I. Standing of Bradbury Memorial
Neither of the other applicants for a Belfast CON has sought judicial review of the Department‘s decision to grant a CON to Tall Pines. The present review proceeding was commenced solely by Bradbury Memorial, whose existing nursing home is faced with competition from the facility for which Tall Pines has received authorization. Contrary to the contention of defendants Department and Tall Pines both in the Superior Court and here, we hold that Bradbury Memorial has standing to obtain judicial review.
The Certificate of Need Act,
In addition to meeting the statutory requirements, plaintiff must also demonstrate that the Department‘s action caused plaintiff a particularized injury. Matter of Lappie, 377 A.2d 441, 442-43 (Me.1977); see Singal v. City of Bangor, 440 A.2d 1048, 1051 (Me.1982). The purposes of the Certificate of Need Act include regulation of the distribution of health care facilities so as to avoid unnecessary duplication and wasted capital expenditures.
That standing extends to all the issues that plaintiff raises in its assault upon the CON issued to Tall Pines. As we said in Matter of Lappie, 377 A.2d at 443:
[O]nce a person has standing as a ‘person aggrieved’ by virtue of a particularized injury resulting from an administrative order, such person may raise any and all issues which affect the validity of the order, without regard to whether such issue specifically relates to such injury.
Even if plaintiff‘s success on an issue might lead to an ultimate result that another applicant than Tall Pines receives the
II. Direct Review of the Department‘s Decision
On its appeal before this court, Bradbury Memorial contends that the Department committed a number of fatal errors of law in granting a CON to Tall Pines. We review that administrative action directly for any legal error, without regard to the decision of the Superior Court, which acted only as an intermediate appellate tribunal. See Williams v. Williams, 444 A.2d 977, 978 (Me.1982) (“When the Superior Court acts as an intermediate appellate tribunal, we traditionally review directly the initial determination of the adjudicatory body below rather than the decision of the Superior Court“). See also Lundrigan v. Maine Labor Relations Board, 482 A.2d 834 (Me.1984); Council 74, AFSCME v. Maine State Employees Association, 476 A.2d 699, 703 (Me.1984). On making such a direct review, we find no merit in any of plaintiff‘s claims of error in the Department‘s decision.
A. Issuance of the CON to Tall Pines on a date beyond the 150-day statutory review period
At the heart of Bradbury Memorial‘s appeal is its assertion that the CON issued to Tall Pines is invalid because the Department failed to act on any of the competing applications until after the expiration of the 150-day review period set forth in
Plaintiff contends that on March 13, 1983, when the 150-day period expired, all pending applications including that of Tall Pines were automatically denied. That “pocket veto” or “automatic denial” consequence plaintiff claims to result—not from
Failure of the Department to provide written notification of its decision to the applicant within the Department‘s deadlines shall have the effect of a decision to deny issuance of a certificate of need.
Plaintiff would have us treat that manual provision as a rule within the meaning of
Neither the language nor the context of the manual provision requires it to be interpreted to oust the Department of
We are reinforced in our reading of the manual provision by the fact that the interpretation urged upon us by Bradbury Memorial would render the provision invalid. If that regulation promulgated by an administrative agency were interpreted and applied to the circumstances of this case in a way to bar the Department absolutely from granting the only viable application that remained before it at the time the 150-day deadline arrived, that provision would not be a valid exercise of the administrative rulemaking authority granted by
First,
Second, the 150-day review period of
Third, a “pocket veto” or “automatic denial” would violate the requirement of
Fourth, we believe it clear that the legislature in enacting the Maine Certificate of Need Act in 1978 had every desire for Maine to comply, on an ongoing basis, with the federal requirements for our state to receive federal funds for nursing homes and other health care projects. One declared purpose of the Act was to “[p]rovide for a certificate of need program which meets the requirements of the National Health Planning and Resources Development Act of 1974 ... and its accompanying regulations.”
§ 123.410 Procedures for State Agency Review.
(a) The procedures adopted and used by a State Agency for conducting the reviews covered by this subpart must include at least the following:
...
(17) Failure to act on an application within the required time. ... A certificate of need ... may not be ... denied solely because the State Agency failed to reach a decision.
Finally, the overall purpose of the Maine Certificate of Need Act must be emphasized. That overall purpose is the identification, and then the prompt-as-possible satisfaction, of the need for additional health
In sum, the validity of the CON issued to Tall Pines was not affected by the Department‘s lateness in issuing its decision.
B. Other alleged legal errors in the Department‘s issuance of the CON to Tall Pines
Plaintiff Bradbury Memorial asserts a variety of further errors of law by the Department of Human Services in issuing the Belfast CON to Tall Pines. We have reviewed all of plaintiff‘s contentions and find that none are fatal to the validity of Tall Pines’ CON.
Bradbury Memorial first argues that Tall Pines’ failure to submit a completed CON application by the August 10, 1982, deadline set by the Department‘s regulations precluded the Department from placing Tall Pines in the same 150-day review cycle as BMA. That argument is quickly answered. In fact, none of the three applications was complete by the August dead-line, and thus no party was unduly prejudiced by the Department‘s extension of the filing deadline to October 8. That extension was the only practical alternative available to the Department in light of the three incomplete applications that it had before it on August 10. No party objected to the granting of the extension when the Department took that action on September 3. One can conclude that each applicant thought the extension of time to be in its own best interest.
We note also that even if Tall Pines had been placed in a later review cycle than BMA and Northport, Tall Pines would have still been awarded the CON. BMA withdrew its application, and Northport‘s application came under a disqualifying cloud, for reasons unrelated to Tall Pines’ application. Those other proposals dropped out of competition for the Belfast CON from causes unrelated to the relative merits of the three original applications. Thus, the extension of the deadline for filing applications from August 10 until October 8 in no way prejudiced any of the applicants and does not require that we reverse the Department‘s decision.
Bradbury Memorial next contends that the Department wrongfully induced BMA to withdraw its application. The record contains no support for this contention. Plaintiff utterly fails to show that BMA‘s withdrawal from the competition was anything but voluntary action on its part. After BMA had completed its application, some persons within the Department, and in turn BMA, became concerned that if BMA purchased Bradbury Memorial, a “related party” problem might exist and could jeopardize Medicaid funding for the BMA nursing home. BMA discussed the alternatives open to it with middle-level staff employees of the Bureau of Health Planning, but never requested a final determination by the Department of the related party issue. After the discussions with Bureau employees, BMA voluntarily withdrew its application. Given the Medicaid regulations, BMA may well have decided to pur-
As a further claim of error, Bradbury Memorial charges that the Department failed to give reasons for its decision to depart from the recommendation of the MHSA (that BMA be awarded the Belfast CON) as required under
Finally, Bradbury Memorial contends that the Department failed to make the required findings of fact in awarding the CON to Tall Pines and that the record as a whole contains insufficient evidence to support those findings. Contrary to that contention, a review of the record on appeal demonstrates that the Department possessed adequate information upon which to base its decision, including the need for 70 additional nursing home beds in Belfast, and, in its response to plaintiff‘s request for reconsideration, fully explained its reasons for awarding the CON to Tall Pines. We find no deficiency or error in the Department‘s findings of fact.
None of plaintiff‘s other alleged errors of law on the part of the Department merit discussion.
III. Superior Court‘s Refusal to Take Additional Evidence
In reviewing agency action the Superior Court may take additional evidence, M.R.Civ.P. 80C(e), or order the taking of additional evidence by the agency if 1) the additional evidence is material and 2) such evidence could not have been presented before the agency.
Having reviewed all of the plaintiff‘s points on appeal, we find no error in the actions of the Department, or in the proceedings before the Superior Court, that requires us to order the Department to begin anew the time-consuming process of accepting applications for the certificate of need for nursing home beds in Belfast, or to reconsider its issuance of the certificate of need to Tall Pines Manor Associates.
The entry is:
Judgment affirmed.
ROBERTS, VIOLETTE, GLASSMAN and SCOLNIK, JJ., concurring.
WATHEN, Justice, dissenting.
I strongly disagree with the Court‘s construction of
To the extent practicable, a review shall be completed and the department shall make its decision within 90 days after the date of notification under subsection 1. The department, after consulting with the Health Systems Agency, shall establish criteria for determining when it is not practicable to complete a review within 90 days. Whenever it is not practicable to complete a review within 90 days, the department, after consultation with the Health Systems Agency, may extend the review period up to an additional 60 days. Any review period may be extended with the written consent of the applicant.
Failure of the Department to provide written notification of its decision to the applicant within the Department‘s deadlines shall have the effect of a decision to deny issuance of a certificate of need. [42 CFR 123.407(A)-(15)] Failures to provide notice resulting from oversight, illness or storms shall be corrected within a period of time not exceeding ten (10) days through providing either a written denial of the Application or a certificate of need.
Procedures Manual.
The Procedures Manual leaves no room for interpretation. It clearly prescribes the sanction for departmental inaction—denial. It was developed in apparent response to a federal regulation,
The reasons offered to support the proposition that “a rule that automatically denied an application after a given period of time would be invalid” are not persuasive. First it is asserted that
The Court‘s conclusion that the “pocket veto” would permit the Department to avoid the statutory requirement for explaining its decision (
The remaining reason advanced by the Court results from an unorthodox technique of interpretation. The Department and Tall Pines argue, and the Superior Court ruled, that the Procedures Manual had been preempted and superceded by the underlying federal regulation which was changed after the Manual was adopted. In an effort to avoid conflict between the Procedures Manual and the new federal regulation, the Superior Court chose to disregard the Manual but warned of stricter interpretations if the Manual remained unchanged in the future. Although the federal government has the power to condition financial grants to the states on fulfillment of federally prescribed requirements, the National Health Planning and Resources Development Act of 1974,
The Court stands the preemption argument on its head and applies a doctrine which could only be described as “auto-preemption.” Relying on a general statement of purpose the Court declares all rules in contravention of federal regulations to be invalid, ipso facto. Not only is there no federal preemption under such circumstances, it should be noted that the 1980 federal regulation eliminating automatic denial, created a grace period until January 1982 for the states to adopt the change. See
Finally, I do not agree with the observations concerning the overall purpose of the Maine Certificate of Need Act and the impact of these observations on the issue before us. The Court finds the review process to be designed for the sole purpose of producing a facility “as soon as possible.” I would argue that the review process is designed to insure that the proposals under consideration, including financial projections and forecasts, are contemporaneous. Otherwise a direct competitive comparison from one proposal to another would be difficult, if not impossible. Beyond that, the 150 day time limit insures that the decision will be based on reasonably current information. Obviously, the goal is to secure for the public the most financially feasible project. There is nothing in the record before us which suggests that the public will be better served by the immediate construction of the Tall Pines project, as opposed to the project which would result from a new round of competitive review. I would refrain from making such a judgment. The limited function of the Court should be to insure procedural regularity. I would reverse the decision to issue the Certificate of Need.