Illinois Health Care Ass'n v. Illinois Dept. of Public Health

• Decision Date: 18 July 1989
• Docket Number: No. 88-2486,88-2486
• Citation: 879 F.2d 286
• Parties: ILLINOIS HEALTH CARE ASSOCIATION, et al., Plaintiffs-Appellants, v. ILLINOIS DEPARTMENT OF PUBLIC HEALTH, and Bernard J. Turnock, in his capacity as Director of the Illinois Department of Public Health, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 286

879 F.2d 286

ILLINOIS HEALTH CARE ASSOCIATION, et al., Plaintiffs-Appellants, v. ILLINOIS DEPARTMENT OF PUBLIC HEALTH, and Bernard J Turnock, in his capacity as Director of the Illinois Department of Public Health Defendants-Appellees.

No. 88-2486.

United States Court of Appeals Seventh Circuit.

Argued Feb. 14, 1989.

Decided July 18, 1989.

A. Benjamin Goldgar, James J. Casey, Jeanine M. Jiganti, Keck, Mahin & Cate, Chicago, Ill., Steven Nardulli, Bruce Stratton, Stratton, Dobbs, Nardulli & Lestikow, Springfield, Ill., Thomas J. Reed, Chicago, Ill., for Illinois Health Care Ass'n, Heritage Enterprises, Inc., Heritage Manor Nursing & Convalescent Home of Peru, Parks Memorial Convalescent Center, Inc. and Lewis Memorial Christian Village, Inc.

Ann Plunkett Sheldon, Office of the Atty. Gen., Chicago, Ill., Stanley L. Morris, Pfeifer & Kelty, Springfield, Ill., for Illinois Dept. of Public Health and Bernard J. Turnock.

Before CUDAHY and KANNE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

CUDAHY, Circuit Judge.

Plaintiff Illinois Health Care Association (the "IHCA"), an association of nursing homes operating in Illinois, and three of its member homes ¹ commenced this equal protection action under 42 U.S.C. section 1983 challenging the constitutionality of the exemption of hospital-based long-term care units from the Nursing Home Care Reform Act, Ill.Rev.Stat. ch. 111 1/2, paragraphs 4151-101 et seq. Defendants moved to dismiss the complaint, their motion was granted and plaintiffs appeal. We affirm.

I.

Plaintiff IHCA, an Illinois not-for-profit corporation, is an association of 279 nursing homes and long-term health care facilities operated in Illinois. These facilities provide medical, rehabilitative and other care to the infirm, chronically ill and elderly. IHCA members comprise corporations, partnerships and sole proprietors licensed by the State of Illinois to operate as long-term care facilities under the Nursing Home Care Reform Act of 1979 (the "Act"), Ill.Rev.Stat. ch. 111 1/2, paragraphs 4151-101 et seq. As licensed operators of long-term care facilities, IHCA members are subject to the comprehensive regulatory scheme established by the Act and the regulations promulgated under it by the defendant Illinois Department of Public Health (the "IDPH"). The IDPH is the state agency responsible for the inspection, evaluation and certification of long-term care facilities as defined in the Act. See Ill.Rev.Stat. ch. 127, p 55.40.

The Act and its concomitant regulations provide an extensive regulatory regime, establishing standards for the treatment and care of residents in long-term care facilities. The legislation directs covered nursing home operators to ensure that various specified residents' rights involving matters such as privacy, management of financial affairs, inspection of records, discharge and transfer are protected. ² Section 4151-113 of the Act defines a covered "facility" or "long-term care facility" as any "private home, institution, building, residence, or any other place ... which provides ... personal care, sheltered care or nursing for 3 or more persons, not related to the applicant or owner by blood or marriage." Subsection (2) specifically excludes from coverage a

hospital, sanitarium, or other institution whose principal activity or business is the diagnosis, care, and treatment of human illness through the maintenance and operation as organized facilities therefor, which is required to be licensed under the "Hospital Licensing Act", ....

Ill.Rev.Stat. ch. 111 1/2, p 4151-113(2). ³

The IHCA instituted this civil rights suit against the IDPH and its director, Turnock, challenging the defendants' interpretation of section 4151-113 to exclude all hospital-based long-term care units or facilities from coverage under the Act. The IHCA's complaint alleges that the statutory exemption, as interpreted by the IDPH, deprives the plaintiffs of equal protection under the fourteenth amendment by placing them at a competitive disadvantage vis-a-vis hospital-based long-term care units, which, plaintiffs submit, are virtually nursing homes set up within the physical confines of a hospital. See Complaint of Plaintiffs p 14 at 5. Further, the IHCA asserts that the defendants' interpretation and application of the Act irrationally discriminates against individuals residing in hospital-based long-term care units by denying them fundamental rights and protections secured by the Act. The IHCA seeks a declaration that the exemption as applied to hospital-based long-term care units or facilities is unconstitutional and an injunction enjoining the defendants from continuing to exempt hospital-based long-term care units from regulation under the Act.

The defendants filed a motion to dismiss the plaintiffs' complaint based on lack of standing, sovereign immunity and failure to state a claim upon which relief can be granted. Notwithstanding the magistrate's recommendation to deny the defendants' motion, the district court determined that IHCA's complaint failed to state a claim upon which relief can be granted and accordingly entered a dismissal pursuant to Rule 12(b)(6). We affirm.

II.

In reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, we, of course, accept as true all well-pleaded factual allegations and inferences reasonably drawn from them. See Gray v. County of Dane, 854 F.2d 179, 182 (7th Cir.1988). Dismissal is proper if it appears beyond doubt that the plaintiff could prove no set of facts in support of his claim that would entitle him to the relief requested. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). The IHCA contends that the district court erred in prematurely dismissing its claim challenging on equal protection grounds the constitutionality of the defendants' interpretation and application of the Act's hospital exemption.

The IHCA's argument begins with the unexceptionable proposition that the equal protection clause requires that all similarly situated persons be treated alike. See City of Cleburne v. Cleburne Living Center, 473 U.S. 432, 439, 105 S.Ct. 3249, 3254, 87 L.Ed.2d 313 (1985). In evaluating the constitutionality of any specific legislation or regulatory scheme, the appropriate standard of review is critical to the determination. See Griffin High School v. Illinois High School Association, 822 F.2d 671, 674 (7th Cir.1987). Unless the challenged statute or rule implicates a suspect classification or a fundamental right, the only question is whether the rule or statute is rationally related to a legitimate state interest. See Oriental Health Spa v. City of Fort Wayne, 864 F.2d 486, 490 (7th Cir.1988) (citing City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976). The classification under attack in this case involves an allegedly underinclusive statute that exempts hospital-based long-term care units from the extensive regulation imposed on nursing home facilities, which are purported to be similarly situated. The IHCA does not persuade us that this classification is in any way "suspect." Nor does the regulation impinge on any fundamental rights of the nursing homes. See People v. Gurell, 98 Ill.2d 194, 204, 74 Ill.Dec. 516, 520, 456 N.E.2d 18, 22 (1983) (the right to operate a nursing home is not a fundamental right guaranteed by the Constitution). ⁴ Therefore, the district court correctly reviewed the legislation in question employing a rational basis analysis.

The rational basis test is applied quite deferentially by courts reviewing social and economic legislation. Courts may not arrogate to themselves the prerogative of the legislature in addressing social and economic matters. Rather, "[i]f the court can hypothesize plausible reasons for legislation that are within the legitimate goals of a government, nothing else is required to validate the governmental classification and it does not matter whether the reasons advanced actually motivated the legislative action." Evans v. City of Chicago, 873 F.2d 1007, 1016 (7th Cir.1989) (citing United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 179, 101 S.Ct. 453, 461, 66 L.Ed.2d 368 (1980)). In the area of social and economic regulation, "it is only invidious discrimination, the wholly arbitrary act, which cannot stand consistently with the Fourteenth Amendment." City of New Orleans v. Dukes, 427 U.S. at 303-04, 96 S.Ct. at 2516-17 (citing Ferguson v. Skrupa, 372 U.S. 726, 732, 83 S.Ct. 1028, 1032, 10 L.Ed.2d 93 (1963)). Moreover, a legislature may adopt laws which "only partially ameliorate a perceived evil and defer complete elimination of the evil to future regulations." Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2517, 49 L.Ed.2d 511 (1976) (citing Williamson v. Lee Optical Co., 348 U.S. 483, 488-89, 75 S.Ct. 461, 464-65, 99 L.Ed. 563 (1955)). As this court recently clarified in Oriental Health Spa v. City of Fort Wayne, 864 F.2d 486:

Legislative bodies are presumed to have acted constitutionally, even in the absence of an express policy favoring the enactment of a law. The state or municipal interest is presumed to be legitimate. Accordingly, a classification need not be justified by the government; rather, ... the party challenging the ordinance has the burden of demonstrating that no conceivable legitimate public interest is furthered by the classification.

Id. at 490 (citing Minnesota v. Clover Leaf Creamery, 449 U.S. 456, 465, 101 S.Ct. 715, 724, 66 L.Ed.2d 659; Vance v. Bradley, 440 U.S. 93, 111, 99 S.Ct. 939, 949, 59 L.Ed.2d 171; McDonald v. Board of Election Comm'rs, 394 U.S. 802, 809, 89 S.Ct. 1404, 1408, 22 L.Ed.2d 739).

The IHCA contends that the exemption of hospital-based long-term care units is irrational because hospitals and nursing homes provide virtually identical services to patients requiring long-term care and, hence, should be subjected to the same comprehensive regulatory...