Brownsville Golden Age Nursing Home, Inc. v. Wells

• Decision Date: 01 February 1988
• Docket Number: No. 87-3552,87-3552
• Citation: 839 F.2d 155
• Parties: Medicare&Medicaid Gu 36,834 BROWNSVILLE GOLDEN AGE NURSING HOME, INC., Appellant, v. Joann WELLS, Paula Snyder, Joyce McNamara and John Heinz. Third Circuit. Submitted Under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 155

839 F.2d 155

Medicare&Medicaid Gu 36,834

BROWNSVILLE GOLDEN AGE NURSING HOME, INC., Appellant, v. Joann WELLS, Paula Snyder, Joyce McNamara and John Heinz.

No. 87-3552.

United States Court of Appeals,Third Circuit.

Submitted Under Third Circuit Rule 12(6)

Feb. 1, 1988.

Decided Feb. 9, 1988.

F. Peter Dixon, Dixon, Bogdon & D'Ippolito, Pittsburgh, Pa., for appellees Joann Wells and Paula Snyder.

LeRoy S. Zimmerman, Atty. Gen., Jerome T. Foerster, Deputy Atty. Gen., Gregory R. Neuhauser, Sr. Deputy Atty. Gen., Andrew S. Gordon, Chief Deputy Atty. Gen., Chief, Litigation Section, for appellee Joyce McNamara.

Michael Davidson, Senate Legal Counsel, Ken U. Benjamin, Jr., Deputy Senate Legal Counsel, Morgan J. Frankel, Susan B. Fine, Asst. Senate Legal Counsel, Washington, D.C. (J. Tomlinson Fort, W. Thomas McGough, Jr., Reed, Smith, Shaw & McClay, Pittsburgh, Pa., of counsel), for appellee Senator John Heinz.

Gilbert B. Abramson, Bruce L. Thall, Michael B. Tolcott, Abramson, Cogan, Kogan, Freedman & Thall, P.C., Philadelphia, Pa., for appellant.

Before SLOVITER, STAPLETON and MANSMANN, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Brownsville Golden Age Nursing Home, Inc. filed an action alleging that defendants engaged in a civil conspiracy, tortious interference with business relations, and malicious use of process designed to lead to the revocation of its nursing home license by the Commonwealth of Pennsylvania. The district court granted summary judgment in favor of the defendants, and Brownsville appeals. Our review is plenary. See Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402, 405 (3d Cir.1981).

I. Facts

Brownsville operated a nursing home for the elderly in Fayette County, Pennsylvania. Under state law, facilities such as Brownsville must be licensed by the Department of Health (DOH). DOH regulations for skilled nursing facilities cover ownership and management, 28 Pa.Code Sec. 201 (1988), physical plant and equipment, id. Sec. 205 (1987), housekeeping and maintenance, id. Sec. 207, fire protection and safety, id. Sec. 209, infection control, medical services, dietary and pharmaceutical services and standards for patient care, id. Sec. 211. A facility's eligibility for participation in the Medicare and Medicaid programs is jointly monitored by DOH and the federal Health Care Financing Administration (HCFA), an agency of the Department of Health and Human Services, to insure that the facility is complying with the detailed conditions of participation established by federal regulations. See 42 U.S.C. Sec. 1395x(j)(15) (1982); 42 C.F.R. Secs. 405.1101-.1137, -.1901(b)(2) (1986). Compliance with both federal and state regulations is determined through inspection of the facility by authorized personnel.

A federal survey conducted at Brownsville on May 30, 31, and June 1, 1984 uncovered serious violations of the applicable regulations. In June 1984, state surveyors also found serious violations and deficiencies. The HCFA notified Brownsville that its Medicare agreement was terminated as a result of the reports of the inspections made by it and by the state DOH. The following month, the Pennsylvania Department of Public Welfare notified Brownsville that its termination from Medicare required its termination from Medicaid.

In July 1984, the DOH, based on both the state and federal inspections of Brownsville conducted in May and June, 1984 revealing deficiencies in that home, suspended all new admissions to Brownsville, and ordered Brownsville to show cause why its license should not be suspended. These orders were based on the DOH's determination that Brownsville was guilty of (1) a serious violation of the provisions of the state Health Care Facilities Act and the regulations for licensure, (2) a cyclical pattern of deficiencies over a period of two or more years, and (3) serious violation of laws relating to medical assistance and medicare reimbursement. Brownsville appealed these orders to the Pennsylvania State Health Facility Hearing Board (State Board), which held a hearing in March 1985. The State Board ruled that DOH had failed to prove its charges, refused to revoke Brownsville's license, and lifted the suspension on new admissions to the home. The DOH appealed the State Board's decision to the Commonwealth Court of Pennsylvania.

The Commonwealth Court overturned the State Board's decision, Commonwealth v. Brownsville Golden Age Nursing Home, Inc., 103 Pa.Commw. 449, 520 A.2d 926 (1987). The court detailed the serious deficiencies in the operation of Brownsville as reflected in the inspection reports prepared by state and federal inspectors. These included, among other serious violations, inadequate programs on infection control and the psychosocial needs of patients, id. at 931, the failure to treat patients with "consideration, respect, and full recognition of [their] dignity and individuality," id., unsanitary conditions, such as the failure to handle linen in a manner to prevent the spread of infection, id. 520 A.2d at 932, "a generally dirty and unkempt dietary facility," id. at 933, "serious violations of the laws relating to medical assistance and medicare reimbursement," id., and delays or omissions in notifying attending physicians of significant changes in patients' physical, mental or emotional status, id. at 934. In light of these reported conditions, the Commonwealth Court found that the State Board's decision not to revoke Brownsville's license was unsupported by substantial evidence, and it therefore ordered the revocation of that license. Id. at 939. The Supreme Court of Pennsylvania denied Brownsville's petition for allowance of appeal of the Commonwealth Court's decision, Brownsville Golden Age Nursing Home v. Commonwealth, Dept. of Health, 515 Pa. 610, 529 A.2d 1083 (1987) (per curiam), thereby rendering that decision final under the state's law.

While the state proceedings were underway, Brownsville pursued its federal remedies and appealed from its Medicare decertification. An administrative law judge, giving collateral estoppel effect to the then outstanding State Board's decision not to revoke Brownsville's license, ordered that Brownsville's Medicare reimbursement be restored. However, when the Commonwealth Court reversed the State Board's decision, Brownsville again lost its Medicare certification.

II. Procedural History

In April 1986, while Brownsville had temporarily prevailed in both the state and federal administrative areas, it filed the present suit in state court against two private individuals, Joanna Wells and Paula Snyder, Director of the Division of Long-Term Care of the Pennsylvania Department of Health, Joyce McNamara, and John Heinz, a United States Senator from Pennsylvania and then Chairman of the Senate's Special Committee on Aging. The complaint alleged that the defendants had engaged in a civil conspiracy to interfere with Brownsville's present and prospective business relations, and that McNamara had maliciously used process in improperly instituting DOH proceedings against the home. The suit was removed to federal court by Senator Heinz. McNamara filed a motion to dismiss in June 1986. Thereafter, Senator Heinz filed a motion for summary judgment; Wells and Snyder followed with their motion.

The relevant facts are not in dispute. In May 1983, Wells and Snyder visited Brownsville in connection with their interest in placing a relative in the nursing home. They were appalled by the conditions they observed in their short visit, which Brownsville stresses lasted only fifteen minutes. They then proceeded to communicate their concern to federal and state officials, in what Brownsville describes as a publicity and letter writing "campaign of Herculian [sic] dimension." Appellant's Brief at 13. Wells and Snyder wrote to the Ombudsman Program of Services to Senior Citizens, Pennsylvania Governor Richard Thornburgh, the State Secretary of Health, a State Senator, the HFCA, President Reagan, the United States Senate Special Committee on Aging, CBS News, 60 Minutes, and local television. On June 6, 1983, they wrote to appellee Senator Heinz, whom Brownsville claims soon joined Wells and Snyder in their conspiracy against the nursing home. The object of what Brownsville calls the "unholy alliance" between Heinz, Wells and Snyder was to pressure appellee McNamara to decertify the nursing home. Appellant's Brief at 18. In March 1985, a CBS television program aired a segment on Brownsville entitled "Somebody Ought to do Something."

It is Brownsville's contention, and the crux of its complaint that, as a result of the complaints of Wells and Snyder and of the attention paid to Brownsville by Senator Heinz and the Senate Committee on Aging which he chaired, the state and federal regulators were pressured into actions resulting in Brownsville's eventual loss of license and decertification. McNamara moved to dismiss on the ground, inter alia, that the complaint failed to state a claim. Wells and Snyder based their motion for summary judgment in part on the grounds that their conduct was legally privileged and justified and did not cause the initiation of regulatory proceedings against Brownsville. Senator Heinz' motion for summary judgment was based on constitutional immunity from suit under the Speech and Debate Clause, the propriety of his communications, the lack of causation of the regulatory actions, and legal privilege and justification.

Brownsville was permitted to take the depositions of Wells, Snyder and Senator Heinz and to review certain records of the Aging Committee relating to Brownsville. After the Commonwealth Court's decision became final, the district court granted summary judgment in favor of all four defendants. Brownsville Golden Age Nursing Home, Inc. v. Wells, 665 F.Supp. 419 (W.D.Pa.1987). The court dismissed the claim of malicious abuse of process against DOH official McNamara because, under...