Beechwood Restorative Care Center v. Leeds

• Court: U.S. District Court — Western District of New York
• Writing for the Court: Larimer
• Citation: Beechwood Restorative Care Center v. Leeds, 317 F.Supp.2d 248 (W.D. N.Y. 2004)
• Decision Date: 04 May 2004
• Docket Number: No. 02-CV-6235L.,02-CV-6235L.
• Parties: BEECHWOOD RESTORATIVE CARE CENTER, et al., Plaintiffs, v. Laura E. LEEDS, et al., Defendants.

317 F.Supp.2d 248

BEECHWOOD RESTORATIVE CARE CENTER, et al., Plaintiffs, v. Laura E. LEEDS, et al., Defendants.

No. 02-CV-6235L.

United States District Court, W.D. New York.

May 4, 2004.

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Kevin S. Cooman, Paul Garrett Barden, Peter J. Weishaar, McConville, Considine, Cooman & Morin, PC, Rochester, NY, for Plaintiffs.

Darren Longo, Office of the New York State Attorney General, Buffalo, NY, Gordon J. Lipson, Underberg & Kessler, LLP, Christopher V. Taffe, U.S. Attorney's Office, Rochester, NY, for Defendants.

DECISION AND ORDER

LARIMER, District Judge.

Plaintiffs Brook and Olive Chambery ("the Chamberys") commenced this action against various state and federal officials, alleging that defendants, through the deliberate misuse of their regulatory powers, forced a nursing home owned by the Chamberys, Beechwood Restorative Care Center ("Beechwood" or "the facility") to be permanently shut down. Plaintiffs allege that defendants did so to punish the Chamberys for having pointed out problems with respect to defendants' own actions and practices.

Plaintiffs have asserted several claims under 42 U.S.C. § 1983, and a claim against the federal defendants pursuant to Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). They seek compensatory and punitive damages for the alleged violations of their rights. Defendants have moved for summary judgment dismissing the complaint, and plaintiffs move for summary judgment on the issue of liability as to one of their claims against two of the defendants.

I. FACTUAL BACKGROUND¹

A. Events Leading up to Revocation of Plaintiffs' Operating Certificate

Prior to being shut down, Beechwood was a skilled nursing facility on Culver Road in Rochester, New York, and was operated by the Chamberys as a partnership. Complaint ¶¶ 10, 12, 14. As a skilled nursing facility, Beechwood held an operating certificate from the New York State Department of Health ("DOH").

As a requirement of its operating certificate, Beechwood became certified as a participant in the Medicare and Medicaid programs ("Medicare/Medicaid").² One of the consequences of this was that Beechwood was subject to inspections by DOH to evaluate its compliance with federal and state regulations. Any deficiencies that are found are ranked from "A" (an isolated deficiency causing no actual harm and only the potential for minimal harm to a resident) to "L" (a widespread deficiency causing immediate jeopardy to residents' health or safety).

Plaintiffs allege that DOH generally found few or no violations until 1996, when Brook Chambery³ began sending what eventually became a "voluminous" series of letters and other papers to DOH and other state officials protesting various aspects of DOH's policies and practices, and advocating a number of changes. Plaintiff's Rule 56.1 Statement ¶ 59. The details of these complaints need not be set forth here, but the gist of them was that certain DOH practices and requirements were illogical, unnecessary, or unduly burdensome.

In November 1996, DOH surveyors conducted their annual review of the facility, and alleged three level "D" deficiencies at Beechwood. (A "D" deficiency is defined as an isolated deficiency with no actual harm, but with the potential for more than minimal harm that would not put residents' health or safety in immediate jeopardy.) Beechwood opposed the deficiency charges, and one of them was later rescinded by DOH. Affidavit of Brook Chambery (Docket # 66) ¶ 63.

A series of deficiency charges followed over the next few weeks, however, along with Chambery's opposition to those charges. Chambery wrote to DOH officials during this time and complained about improprieties and flaws in the survey process. Again, some of the deficiencies were eventually rescinded. Plaintiffs' Rule 56.1 Statement ¶¶ 64-68.

Other problems and conflicts between Beechwood and DOH occurred over the next several years. These included an Article 78 proceeding ("the Langeveld litigation") brought by Beechwood against DOH in late 1996 concerning the proposed discharge of a certain patient (which was resolved by a consent order in March 1997), and a series of letters from Chambery to DOH officials complaining about various matters. In particular, from 1997 through 1999, Chambery wrote and called various DOH officials, arguing for the elimination of Medicaid Access Agreements, which required that, in order to receive state approval for any major changes, the facility had to agree to admit a certain percentage of Medicaid patients. Chambery Aff. ¶ 49.

Plaintiffs state that they refused to sign such an agreement, because-due to the low levels of Medicaid reimbursement-it would have imposed a severe economic hardship on Beechwood. As a result, plaintiffs allege, they were unable to expand or make desired changes to Beechwood. At the same time, however, plaintiffs allege that other facilities in the area had signed such agreements and were not complying with them, yet DOH did nothing to enforce those agreements. Therefore, Chambery (who states that he was too conscientious to sign a Medicaid Access Agreement with the intention of not complying with it, see Chambery Aff. ¶ 51), engaged in a "multi-year campaign with DOH to either enforce or eliminate this [Medicaid Access Agreement] requirement ...." Chambery Aff. ¶ 53.

Plaintiffs allege that due to Chambery's activities in this regard, DOH officials developed a high level of hostility toward Chambery and Beechwood. According to plaintiffs, Chambery was a thorn in DOH's side because he exposed problems with DOH requirements and procedures, and because of the time that DOH officials were forced to spend in order to address Chambery's complaints.

As a result, plaintiffs allege, DOH stepped up its deficiency charges against Beechwood. Chambery, frustrated with DOH, complained to HCFA about DOH's conduct and asked HCFA to conduct an investigation. Plaintiffs' Rule 56.1 Statement ¶ 95(c). Plaintiffs allege that DOH was aware of Chambery's complaints to HCFA, and that this only increased the DOH officials' animosity toward Chambery. More- and more serious-deficiency findings continued during 1998. (Again, some of these would eventually be reduced or rescinded.)

All of these events, however, are only a prelude to what plaintiffs call "the Offensive," which began in the Spring of 1999. According to plaintiffs, this was a multi-pronged effort by all the defendants to force plaintiffs out of the health-care industry altogether, and to cause them financial ruin and public humiliation. Plaintiffs allege that DOH officials' actions included, among other things: enlisting the support of certain HCFA officials; conducting excessive surveys of Beechwood; trumping up charges against Beechwood; revoking Beechwood's operating certificate; and annulling its establishment approval, which in effect meant that the Chamberys could not sell the facility to a different operator.

B. State Administrative Proceedings

On June 23, 1999, DOH commenced an administrative hearing ["DOH hearing"] seeking to revoke Beechwood's operating certificate. At the hearing, which lasted fourteen days, DOH presented evidence to substantiate its claims of deficiencies, and plaintiffs attempted to show that the charges were false.⁴

Following the conclusion of the hearing, the administrative law judge ("ALJ") issued a 97-page report finding that DOH had proven most of the charges against Beechwood by a preponderance of the evidence. It is unnecessary here to summarize each of his findings, but a sample of some of the ALJ's findings will indicate the nature of the problems that he found existed at Beechwood.

The ALJ found, for example, that certain "residents were neglected by Beechwood in several significant aspects of care," such as failing to notify a resident's physician of significant changes in the resident's condition. See ALJ's decision (Affidavit of Anna Colello (Docket # 53) Ex. A) at 66-67. In one instance, the ALJ found that Beechwood had failed to timely notify a resident's physician regarding a "potentially serious or life threatening illness ...." Id. at 68. With respect to another resident, the ALJ found that Beechwood had failed to fulfill its obligation to provide appropriate care and monitoring, and that "the record [wa]s devoid of documentation as to the last 5 hours of the resident's life ...." Id. at 67.⁵

The ALJ found that Beechwood failed to take adequate measures to prevent or treat some residents' pressure sores. Id. at 71-72. He found that one resident has been "subjected, without any reasonable explanation, to an indwelling catheter in place for almost 9 days instead of Beechwood following a physician order of 3 to 4 days." Id. at 76. With respect to certain residents who were at risk of falling, the ALJ also found that Beechwood had failed to meet its obligation to take sufficient steps to try to prevent injury to the residents. Id. at 74. He also found that "a number of Beechwood residents were not provided adequate pain control," and that in several instances various physicians' orders were not carried out. Id. at 78.

The ALJ also found that DOH "took numerous steps in its attempt to keep Beechwood open," and that Beechwood failed to take advantage of the opportunities given it by DOH to rectify the problems with the facility. Id. at 65. Instead, he stated, plaintiffs'"plans of correction" submitted to DOH consisted in large part of "denials of events that were found, attacks on the messengers (surveyors) and a barrage of information not relevant or consequential to the cited deficiencies." Id. at 90. In fact, the ALJ found, "no correction was taking place." Id.

Although the ALJ found a number of specific deficiencies, he also...