MSI Regency Ltd. v. Alvin Jackson

433 F. App'x 420
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 12, 2011
Docket09-4473
StatusUnpublished
Cited by11 cases

This text of 433 F. App'x 420 (MSI Regency Ltd. v. Alvin Jackson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MSI Regency Ltd. v. Alvin Jackson, 433 F. App'x 420 (6th Cir. 2011).

Opinions

OPINION

McKEAGUE, Circuit Judge.

Plaintiff-Appellant MSI Regency (“Regency”) was granted a Certificate of Need from the Ohio Department of Health (“ODH”) to rebuild its nursing home facilities. However, when ODH revoked that Certificate due to changes in Regency’s planned activities, Regency lost substantial revenues on the stalled project. Regency brought suit under 42 U.S.C. § 1983 against several current and former ODH employees, in their personal capacities, alleging, inter alia, due process and equal protection violations. The Defendants filed a motion to dismiss, based on qualified immunity and failure to state a claim. The district court denied the motion, concluding that it could not determine whether the complaint alleged a constitutional violation. For the following reasons, we REVERSE the district court’s judgment and hold that the defendants are entitled to qualified immunity.

I.

Plaintiff-Appellant Regency owns a nursing home and assisted living facility. On July 20, 2005, Regency applied for a Certificate of Need from ODH, in order to rebuild its outdated facilities. A Certificate of Need (“CON”) is a required approval from the state to conduct a “reviewable activity.” Ohio Revised Code Section 3702 defines a “reviewable activity” to include any “establishment, development, or construction of a new long-term care facility,” “replacement of an existing long-term care facility,” or “renovation of a long-term care facility____” Ohio Rev. Code § 3702.51(R)(l)-(3). Also defined as a “reviewable activity” is “[a]ny change in the health services, bed capacity, or site, or any other failure to conduct the reviewable activity in substantial accordance with the approved application for which a certificate of need concerning long-term care beds was granted, if the change is made within five years after the implementation of the reviewable activity for which the certificate was granted.” Id. at § 3702.51(R)(5).

Regency planned to tear down one building on its property (which was currently used for assisted living facilities) and build a new nursing home facility in its [422]*422place, then move the existing nursing home residents into the new building. After this was completed, Regency intended to then demolish the old nursing home building and build a new assisted living facility. Regency’s application included a description of its plan for care of the current nursing home residents — it stated that the existing facility would remain operational until the new building was completed and that nursing home residents “will remain where they are [in the current nursing home facility] until the renovation is completed.”

On November 1, 2005, ODH granted Regency a CON. However, before receiving the certificate, Regency had also applied to the Ohio Department of Housing and Urban Development (“HUD”) for construction financing for this intended two-phase project. After receiving the CON, Regency was informed that HUD would not provide financing for the plan as currently laid out, but would finance the project if the nursing and assisted living facilities were built as one project — i.e., at the same time. Therefore, Regency changed its plan. Without discussing this change with ODH, Regency informed its long-term care residents in a letter dated December 15, 2005, that the existing facility would be closing no later than March 2006, and that they would have to relocate during construction. The letter offered assistance with relocation. The same day, Regency sent Defendant-Appellant, J. Nick Baird, then-Director of ODH, a letter entitled “90 Day Advance Notice of Intent to Close.”

On January 6, 2006, ODH responded to the December 15th letter. In its response, written by Defendant Christine Kenney, Section Chief of Health Care Services at ODH, the Department noted that the Certificate of Need’s approval was conditioned on Regency’s representation in its application that the renovation would “progress without any impact on the ongoing care and services to the residents who will remain where they are until the renovation is completed.” ODH’s letter warned Regency that “[failure to comply with this aspect of the approved project may initiate procedures to withdraw the certificate of need.”

Regency alleges, and Defendants deny, that Regency (through its representative, Managing Member Akiva Wagschal) discussed ODH’s January 6 letter with another ODH representative, John Hoffman, and with the ODH Assistant Counsel, Defendant Carol Ray, who stated that the concerns in Kenney’s January 6 letter were “unprecedented,” and suggested how to respond.

Regency responded to ODH with a letter dated January 10, 2006. Regency initially disputed Kenney’s statement that the Certificate of Need contained a condition regarding the residents’ location. Regency went on to explain the changed financial circumstances and thus the change in its plan, and then acknowledged that “[t]his turn of events necessitated making a minor change in the original documented” plan. Regency’s letter to ODH also noted that some residents were displeased with the plan requiring them to move, and so, “[w]ith a heavy heart, deep regret and great reluctance, on December 27, 2005, we [Regency] issued them 30 day advance notices of our intent to transfer them.” This letter to residents was in fact entitled “Eviction Notice,” and stated that the residents would be “transferred] and discharge[d]” in January because “the facility is closing.”

Importantly, Regency’s letter then went on to say “I respectfully request that if a ‘determination of non-reviewability’ is required,” because of the modification to the [423]*423plan, “that this letter be considered our request for a determination.”

Despite their receipt of the January 6 letter from ODH, expressing concerns about Regency’s closing of the facility, Regency continued with its plan to close. It informed ODH on January 25 that all residents had moved or been relocated, and that the nursing facility was officially closed. On February 2, Defendant Kaiser (on behalf of Defendant Kenney and ODH) sent Regency a form document, which did not refer to the January 10 letter or the relocation, but simply was a routine form that requested copies of design drawings.

However, on February 28, Defendant Baird, then-Director of ODH, responded to Regency’s January 10 letter. Presumably responding to Regency’s request, he treated Regency’s letter as a request for a reviewability determination on the changes in the CON conditions. ODH explained that “as approved, the existing facility was to remain open and operational and residents were to remain in the existing building until the new building was constructed and they could be relocated.” The letter further stated that “[a]fter being made aware that the relocation of residents prior to completion of the new building was an issue with the Certifícate of Need, you proceeded with the relocation of residents and closure of the existing facility.” ODH concluded that Regency’s decision to relocate the residents was a “reviewable activity.”

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Bluebook (online)
433 F. App'x 420, Counsel Stack Legal Research, https://law.counselstack.com/opinion/msi-regency-ltd-v-alvin-jackson-ca6-2011.