Beechwood Restorative Care Ctr. v. Leeds

• Court: U.S. District Court — Western District of New York
• Writing for the Court: DAVID G. LARIMER
• Citation: Beechwood Restorative Care Ctr. v. Leeds, 856 F. Supp. 2d 580 (W.D. N.Y. 2012)
• Decision Date: 13 April 2012
• Docket Number: No. 02–CV–6235L.,02–CV–6235L.
• Parties: BEECHWOOD RESTORATIVE CARE CENTER, Brook Chambery, Olive Chambery, Plaintiffs, v. Laura E. LEEDS, Edmund Russell Altone, Robert W. Barnett, Anna D. Colello, Arlene L. Gray, Henry M. Greenberg, Antonio C. Novello, Steven B. Steinhardt, Dennis P. Whalen, Sanford Rubin, Susan T. Baker, Sharon A. Carlo, Cynthia T. Francis, Mary Elizabeth Rich, Barbara W. Saner, Defendants.

856 F.Supp.2d 580

BEECHWOOD RESTORATIVE CARE CENTER, Brook Chambery, Olive Chambery, Plaintiffs,

v.Laura E. LEEDS, Edmund Russell Altone, Robert W. Barnett, Anna D. Colello, Arlene L. Gray, Henry M. Greenberg, Antonio C. Novello, Steven B. Steinhardt, Dennis P. Whalen, Sanford Rubin, Susan T. Baker, Sharon A. Carlo, Cynthia T. Francis, Mary Elizabeth Rich, Barbara W. Saner, Defendants.

No. 02–CV–6235L.

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

April 13, 2012.

Stephen K. Tills, Esq., Orchard Park, NY, for Plaintiffs.

Monica J. Eagan, Esq., United States Attorney's Office, Buffalo, NY, for Defendants.

DECISION AND ORDER

DAVID G. LARIMER, District Judge.

On September 12, 2011, the Court issued a Decision and Order, 811 F.Supp.2d 667, granting in part and denying in part defendants' motion for summary judgment in this civil rights action arising out of the operation of a nursing home, Beechwood Restorative Care Center (“Beechwood”), in Rochester, New York, by plaintiffs Brook Chambery (“Chambery”) and his mother Olive Chambery. Trial in this case is currently scheduled to begin on May 14, 2012.

The factual background of this case is set forth in the summary judgment decision, as well as in other decisions of this Court and of the Court of Appeals for the Second Circuit, familiarity with which is assumed. See436 F.3d 147 (2d Cir.2006); 494 F.Supp.2d 181 (W.D.N.Y.2007); 317 F.Supp.2d 248 (W.D.N.Y.2004).

The gist of plaintiffs' claim is that defendants, who were employed by the New York State Department of Health (“DOH”), waged on “offensive” against Chambery and Beechwood, ultimately leading to the revocation of Beechwood's state-required operating certificate and the facility's subsequent closure, in retaliation for protected speech by which Chambery had challenged regulatory findings and rulings, all in violation of the First and Fourteenth Amendments.

Currently pending before the Court are motions in limine filed by both sides. The Court heard oral argument on the motions on February 17, 2012. The following Decision and Order sets forth the Court's rulings on those motions, to the extent that rulings are possible at this time.

DISCUSSION

I. Defendants' Motion

A. New York State Attorney General Medicaid Fraud Control Unit Evidence

Defendants seek to preclude plaintiffs from offering into evidence documents and testimony relating to an investigation of Beechwood that was conducted by the Medicaid Fraud Control Unit (“MFCU”) of the New York State Attorney General's Office. The investigation lasted for nearly three years, and ultimately no charges were brought.

In an internal MFCU memorandum dated April 10, 2003, Assistant Attorney General Jerry Solomon stated that the investigation was opened when it was learned that, after a series of surveys found the residents of Beechwood to be in imminent danger, the NYSDOH decided to have a receiver appointed to operate the facility. When DOH failed to convince the Court to appoint a receiver, it sought revocation of the facility's operating license. After failing to issue a plan of correction satisfactory to the Department, the facility was closed in July 1999 and residents were transferred to other facilities.

Def. Ex. 510 at 2. After summarizing the conduct and results of investigation, Solomon concluded, “This facility has been closed and the owners heavily fined. Based upon insufficient evidence upon which to base a criminal prosecution, I recommend this investigation be closed.” Id. at 8. As stated in another, one-page memo authored by Solomon, the investigation was closed on June 4, 2003. Id. at 1. A June 9, 2003 memo authored by Neil Davis, who according to plaintiffs was the chief investigator, stated that interviews with patients, staff and others “indicated that patient care at the facility was very good to excellent,” and that “SAAG Solomon directed [the] case to be closed based on insufficient evidence upon which to have a criminal prosecution.” Ex. 511.

On August 18, 2003, the Rochester Regional Office of MFCU issued a four-page “Final Report of Auditor” (“Final Report”) containing the following “Findings and Conclusions”:

The interviews [of patients, family members, and others] yielded far more positive testaments to the quality of care, staffing levels and family satisfaction than negative responses. Several former employees, in addition to some family members, criticized DOH for their handling of the situation. The core issue the ALJ continually referred to was Beechwood's policy of charting by exception [a record-keeping procedure]. Due to the lack of documentation, it appeared that poor care was given. However, testimony during the hearing and interviews conducted by our office refuted that contention. Accordingly, SAAG Solomon, with approval of the Deputy Attorney General, closed the case.

Plaintiffs seek to introduce Solomon's memos, the Final Report, and certain other documents relating to the MFCU investigation, including handwritten notes, a subpoena, letters, and other materials.

Defendants contend that these documents are inadmissible hearsay, and also are excludable under Rule 403 of the Federal Rules of Evidence, as unduly prejudicial. Plaintiffs contend that these documents are admissible as public records or reports under Rule 803(8), and that they are not unfairly prejudicial to defendants.

I find that the Final Report is admissible under Rule 803(8), which permits admission of [a] record or statement of a public office if:

(A) it sets out:

(i) the office's activities;

(ii) a matter observed while under a legal duty to report, but not including, in a criminal case, a matter observed by law-enforcement personnel; or

(iii) in a civil case or against the government in a criminal case, factual findings from a legally authorized investigation; and

(B) neither the source of information nor other circumstances indicate a lack of trustworthiness.

In my view, the Final Report falls squarely within this Rule. It contains factual findings by a state agency, resulting from an investigation by that agency regardinga matter within that agency's jurisdiction.

A report that meets the criteria of the rule is “presumptively admissible,” Bridgeway Corp. v. Citibank, 201 F.3d 134, 143 (2d Cir.2000), and the party opposing its admission has the burden of showing that the report is not sufficiently trustworthy to justify its admission. Ariza v. City of New York, 139 F.3d 132, 134 (2d Cir.1998). I conclude that the Final Report does fall within the parameters of Rule 803(8).

I also reject defendants' argument that the report is inadmissible under Rule 403, on the ground that its probative value is outweighed by its prejudicial effect. A central—perhaps the central—issue in this case is what motivated defendants to act as they did with respect to Beechwood. Defendants contend that they were not motivated by any retaliatory animus, but by their genuine, good-faith belief that the level of care provided by Beechwood was so inadequate that the facility needed to be closed down, to protect the safety of its residents. Given that position, I believe that it is fair to allow plaintiffs to attempt to show that an agency other than DOH concluded, based on its own investigation of Beechwood, that the facility was generally well run, and its residents well cared for. The Final Report is plainly relevant in that regard, and is not unfairly prejudicial to defendants.

I recognize that MFCU was primarily concerned with whether criminal charges should be brought against Beechwood or Chambery, rather than with whether Beechwood's operating certificate should be revoked, which was DOH's focus. In addition, part of Solomon's rationale for recommending that the investigation be closed was that Beechwood had already been shut down and its owners heavily fined; in other words, that there was no reason to seek to impose punishment on plaintiffs beyond that which had already been meted out.

Arguably, those facts diminish somewhat the probative value of this evidence. I believe, however, that these are matters going to the weight, not the admissibility, of this evidence. Certainly defense counsel can argue to the jury that MFCU's findings and conclusions have little bearing on the issues in this case, but on balance, I find that this evidence is not subject to exclusion under Rule 403.

Solomon's memo arguably qualifies as a report of a public office under Rule 803(8), though there are other concerns about its admissibility as well. Although “interim agency reports or preliminary memoranda do not satisfy Rule 803(8)(C)'s requirements,” Smith v. Isuzu Motors Ltd., 137 F.3d 859, 862 (5th Cir.1998) (citing City of New York v. Pullman, Inc., 662 F.2d 910 (2d Cir.1981)), nor do the opinions of individual agency employees that are not adopted by the agency itself, id., Solomon's memo is captioned “Closing Memo,” and it did form the basis for the closing of the investigation. In effect, Solomon's recommendations and findings became the position of MFCU itself.

The inquiry does not end there, however. Even when a report falls within the public records exception of Rule 803(8), that does not automatically render all of its contents admissible. In particular, although an official's reliance on hearsay in preparing a report does not necessarily preclude the admission of the officials' conclusions contained in the report, see, e.g., Union Pacific R.R. Co. v. Kirby Inland Marine, Inc. of Mississippi, 296 F.3d 671, 679 (8th Cir.2002), that does not necessarily mean that the hearsay statements themselves can come into evidence. See, e.g., United States v. Mackey, 117 F.3d 24, 28 (1st Cir.1997) (“decisions in this and other circuits squarely hold that hearsay statements by third persons ... are not admissible under this exception merely because they appear within public records”); United States v. Moore, 27 F.3d 969, 975 (4th Cir.1994) (“Even assuming that the report itself fell within...