Southeastern Minnesota Citizens' Action Council, Inc. (SEMCAC, Inc.), Matter of, C4-84-1175

• Decision Date: 11 December 1984
• Docket Number: No. C4-84-1175,C4-84-1175
• Citation: 359 N.W.2d 60
• Parties: In the Matter of SOUTHEASTERN MINNESOTA CITIZENS' ACTION COUNCIL, INC. (SEMCAC, INC.).
• Court: Minnesota Court of Appeals

Page 60

359 N.W.2d 60

In the Matter of SOUTHEASTERN MINNESOTA CITIZENS' ACTION COUNCIL, INC. (SEMCAC, INC.).

No. C4-84-1175.

Court of Appeals of Minnesota.

Dec. 11, 1984.

Syllabus by the Court

1. The Commissioner did not err in applying the local agency priority system.

2. The Commissioner properly classified SEMCAC as a human service agency, and the nursing services as health agencies, for the purpose of the local agency priority system.

Duane M. Peterson, Winona, for SE MN Citizens' Action Council, Inc.

Hubert H. Humphrey, III, Atty. Gen., Robert T. Holley, Sp. Asst. Atty. Gen., Minneapolis, for the State.

Sister Mary Madonna Ashton, Commissioner of Health.

William V. Von Arx, Susan Steffen Tice, Houston County Atty., Caledonia, for Houston County Nursing Service.

Julius E. Gernes, Winona County Atty., Winona, for Winona County Public Health Nursing Services.

Robert R. Benson, Preston, for Fillmore County Public Nursing Services.

Considered and decided by POPOVICH, C.J., and HUSPENI and FORSBERG, JJ., with oral argument waived.

OPINION

HUSPENI, Judge.

The Southeastern Minnesota Citizens' Action Council, Inc. (SEMCAC) seeks review of a decision of the Commissioner of Health denying its application to continue as the administrator of supplemental nutritional services for eligible mothers and young children in Winona and Houston Counties and to resume its position as administrator of the services in Fillmore County. The Commissioner approved the applications of the public health nursing services of the respective counties. SEMCAC contends that the Commissioner erred in applying and construing a local agency priority system included in the federal law which provides the funding for the nutritional program. We affirm.

FACTS

In 1972 Congress authorized the Department of Agriculture to make cash grants to state agencies to provide for supplemental food and nutrition education for eligible low-income women and children. See 7 C.F.R. 246.1 (1984). The state administers the Women, Infants and Children (WIC) program through local agencies. Id. In Minnesota the overall administration is provided by the Department of Health.

The Southeastern Minnesota Citizens' Action Council (SEMCAC) is a multi-county, private nonprofit organization which provides a variety of services, including medical services, to low-income citizens. It serves southeastern Minnesota, particularly the sparsely-settled areas. It has administered the WIC program for the area since 1977.

In 1982 Fillmore County applied to take over administration of the WIC program in its county. The administration of the program was awarded to Fillmore County. SEMCAC did not appeal the decision.

In 1983 SEMCAC submitted its application to continue administration of the WIC program for fiscal years 1984 and 1985 for Dodge, Houston, and Winona Counties, and to resume administration of the program in Fillmore County. The Public Health Nursing Services of Houston and Winona Counties applied to administer the program in their respective counties. The nursing service of Fillmore County submitted its application to continue administering the program in its county.

In choosing between the competing agencies, the health department applied the local agency priority system set out in 7 C.F.R. § 246.5(e) (1984). That section provides:

(e) Local agency priority system. The State agency shall comply with the following requirements in the selection of new local agencies:

(1) The State agency shall select local agencies in accordance with the following priority system which is based on the availability of health and administrative services:

(i) First consideration shall be given to a public or private nonprofit health agency that will provide ongoing, routine pediatric and obstetric care and administrative services.

(ii) Second consideration shall be given to a public or private nonprofit health or human service agency that will enter into a written agreement with another agency for either ongoing, routine pediatric and obstetric care or administrative services.

(iii) Third consideration shall be given to a public or private nonprofit health agency that will enter into a written agreement with private physicians, licensed by the State, in order to provide ongoing, routine pediatric and obstetric care to a specific category of participants (women, infants or children).

(iv) Fourth consideration shall be given to a public or private nonprofit human service agency that will enter into a written agreement with private physicians, licensed by the State, to provide ongoing, routine pediatric and obstetric care.

(v) Fifth consideration shall be given to a public or private nonprofit health or human service agency that will provide ongoing, routine pediatric and obstetric care through referral to a health provider.

The department classified the public health nursing services as health agencies and SEMCAC as a human service agency. Based on these classifications, the nursing services ranked higher in the priority system than SEMCAC, so the department awarded administration of the WIC programs to the nursing services. SEMCAC appealed.

The hearing examiner concluded that the local agency priority system is inapplicable in the circumstances of this case because SEMCAC and the Nursing Service of Fillmore County, the existing administrators, are not "new local agencies" under 7 C.F.R. § 246.5(e). Based on this conclusion, the hearing examiner recommended that the Commissioner grant SEMCAC's appeal as it relates to Houston and Winona Counties and deny the appeal as it relates to Fillmore County.

The hearing examiner made additional conclusions for the purpose of avoiding a remand in the event that the Commissioner rejected the hearing examiner's threshold conclusion. In essence, he concluded that both SEMCAC and the county applicants are combination health agencies and human service agencies, and that both the WIC program within SEMCAC and the public health nursing services within the county government are health service agencies in the local agency priority system.

The Commissioner rejected the hearing examiner's conclusions and denied SEMCAC's appeal in all respects. The Commissioner concluded that the local agency priority system is applicable, that the nursing services are health agencies and SEMCAC is a human service agency for purposes of the local agency priority system, that SEMCAC had the burden of proof of showing that the Department was incorrect in awarding the administration of the WIC programs, and that SEMCAC failed to prove by a preponderance of the evidence that it could better serve WIC participants.

ISSUES

1. Did the Commissioner err in applying the local agency...