USCA4 Appeal: 25-1669 Doc: 54 Filed: 06/05/2026 Pg: 1 of 14
PUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 25-1669
SLIGO CREEK CENTER,
Petitioner,
v.
UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES; ROBERT F. KENNEDY, JR., Secretary of the United States Department of Health and Human Services,
Respondents.
------------------------------
AMERICAN HEALTH CARE ASSOCIATION; THE NATIONAL CENTER FOR ASSISTED LIVING,
Amici Supporting Petitioner.
On Petition for Review of an Order of the Department of Health & Human Services. (A- 21-12)
Argued: May 5, 2026 Decided: June 5, 2026
Before RUSHING and HEYTENS, Circuit Judges, and FLOYD, Senior Circuit Judge.
Petition denied by published opinion. Judge Heytens wrote the opinion, which Judge Rushing and Judge Floyd joined. USCA4 Appeal: 25-1669 Doc: 54 Filed: 06/05/2026 Pg: 2 of 14
ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, PLC, Deale, Maryland, for Petitioner. David L. Peters, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondents. Mark Emerson Reagan, HOOPER, LUNDY & BOOKMAN, P.C., San Francisco, California, for Amici Curiae. ON BRIEF: Brett A. Shumate, Assistant Attorney General, Michael S. Raab, Daniel Aguilar, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondents. David J. Vernon, Rachel L. Zacharias, Sheryl B. Xavier, HOOPER, LUNDY & BOOKMAN, P.C., Washington, D.C., for Amici Curiae.
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TOBY HEYTENS, Circuit Judge:
Nursing homes “must comply with numerous statutory and regulatory
requirements” to participate in—i.e., receive reimbursement from—Medicare. Shalala v.
Illinois Council on Long Term Care, Inc., 529 U.S. 1, 6 (2000). When participating
facilities fail to comply with those requirements, Congress has authorized the Secretary of
Health and Human Services (HHS) to impose various consequences, including civil
monetary penalties. See 42 U.S.C. § 1395i-3(h)(2)(B). Our primary question here: When
the Secretary commences administrative proceedings against a Medicare participant
seeking monetary penalties, does the Seventh Amendment guarantee that participant the
right to a jury trial? We hold the answer is no. And because we see no other basis to disturb
the challenged decision here, we deny the petition for review.
I.
Petitioner Sligo Creek Center ran a Medicare-participating nursing home in
Montgomery County, Maryland. In 2015, county health officials informed petitioner that
two facility employees and a former resident had been diagnosed with active tuberculosis
(TB). The county officials met with petitioner’s staff “to discuss [a] TB contact
investigation and [a] response to the situation.” JA 69. The officials claim they told
petitioner’s staff that the facility “was at high risk for TB transmission” and that—although
the county would provide guidance and oversight—“[p]etitioner’s staff w[ere] responsible
for testing its residents for TB and for follow up treatment.” Id.
Petitioner’s internal policies included a protocol for TB testing and treatment
consistent with standard recommended practices. The protocol stated that, once an active
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case was confirmed, all residents should receive skin tests for TB and those who tested
positive should then get a chest x-ray. A positive skin test and positive x-ray indicate active
TB, while a positive skin test and negative chest x-ray indicate a latent TB infection.
Although latent TB is asymptomatic and noncontagious, untreated latent TB can convert
to active TB, which can be dangerous and even deadly. Petitioner’s protocol required it to
“proceed with evaluati[ng]” residents with positive skin tests and negative chest x-rays for
latent TB treatment. JA 176–77. That requirement was consistent with federal, state, and
county guidance recommending that nursing home residents with latent TB receive
treatment “unless” it is “contraindicated or refused.” JA 69 (first quote); JA 86 (second
quote).
Petitioner followed the first few steps of this protocol. It administered skin tests, and
more than two dozen residents tested positive. Petitioner then gave those residents chest
x-rays. All chest x-rays were negative, indicating latent TB infections.
Under the protocol, petitioner was next supposed to “proceed with evaluat[ing]”
those residents for latent TB treatment. JA 176; accord Petr. Reply Br. 12. But HHS later
concluded—and petitioner now admits—that petitioner neither ordered nor administered
latent TB treatment for residents with positive skin tests and negative x-rays. 1 Nor did
petitioner explain in any of those residents’ records why the facility was not administering
latent TB treatment. Indeed, petitioner “conceded” to HHS that it never even “noted” any
One such resident received latent TB treatment because an unaffiliated physician 1
independently evaluated that resident for a kidney transplant and prescribed the treatment.
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formal latent TB diagnosis “in any of the resident[s’] clinical records because no physician
from the county or the facility rendered such a diagnosis.” JA 97.
More than a year after the residents’ negative chest x-rays, a state health agency
received “a substantial allegation” about petitioner’s “noncompliance” with Medicare’s
participation requirements. JA 72 (quotation marks removed). After an investigation, the
state agency determined petitioner “failed to ensure timely follow up of the treatment and
management of multiple residents who were identified at risk for exposure to a serious
infectious disease” (that is, active TB) “and failed to record in [those] residents’ clinical
records the rationale for treatment/non treatment for” latent TB. Id. (alterations and
quotation marks removed). The state agency thus concluded petitioner violated 42 C.F.R.
§ 483.65 (2016), which required each Medicare-participating nursing home to:
establish and maintain an infection control program . . . under which it— (1) Investigates, controls, and prevents infections in the facility; (2) Decides what procedures, such as isolation, should be applied to an individual resident; and (3) Maintains a record of incidents and corrective actions related to infections.
§ 483.65(a) (2016). 2 The state agency also concluded petitioner’s noncompliance created
“immediate jeopardy,” JA 72, which federal regulations define as “a situation in which [a]
provider’s noncompliance with one or more requirements of participation has caused, or is
likely to cause, serious injury, harm, impairment, or death to a resident.” 42 C.F.R.
§ 488.301. The HHS component that administers Medicare “concurred with” the state
agency’s conclusions, determined when the “immediate jeopardy” began and ended, and
Although the regulation has since been revised, the parties agree the version quoted 2
above was in effect during all relevant times.
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“imposed a . . . per-day [civil monetary penalty]” on petitioner for that period. JA 73.
Petitioner requested and received a hearing in front of an administrative law judge
(ALJ) to contest both “the finding of ‘immediate jeopardy’ noncompliance” with the
relevant regulation “and the associated” fine. JA 73. The parties introduced “voluminous”
evidence, including expert testimony. Id. The ALJ rejected petitioner’s arguments,
concluding: (1) petitioner had been noncompliant; (2) the noncompliance caused
immediate jeopardy during the period HHS asserted; and (3) the fine was reasonable.
Petitioner timely sought review from the HHS Departmental Appeals Board, which
affirmed the ALJ’s decision.
We have jurisdiction to review the Appeals Board’s decision under 42 U.S.C.
§ 1395i-3(h)(2)(B)(ii), which incorporates the judicial review provisions contained in
Section 1320a-7a(e). We determine de novo whether agency action complies with the
Constitution. See, e.g., Loper Bright Enters. v. Raimondo, 603 U.S. 369, 392 (2024). In
contrast, the agency’s “findings . . . with respect to questions of fact” are “conclusive” so
long as they are “supported by substantial evidence on the record considered as a whole.”
42 U.S.C. § 1320a-7a(e).
II.
Petitioner chiefly argues that HHS’s jury-less adjudication of this proceeding for
monetary fines violated the Seventh Amendment as construed in SEC v. Jarkesy, 603 U.S.
109 (2024). Like the Third Circuit in an analogous case, we are “unpersuaded” that Jarkesy
entitles petitioner to a jury trial in this context. Axalta Coating Sys. LLC v. Federal Aviation
Admin., 144 F.4th 467, 473 (3rd Cir. 2025).
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The Seventh Amendment declares that “the right of trial by jury shall be preserved”
“[i]n Suits at common law.” U.S. Const. amend. VII. Under Jarkesy, we “conduct[] a
two-part analysis” to determine whether petitioner was entitled to a jury trial here. Axalta,
144 F.4th at 473. First, we ask, as a “threshold issue,” “whether this action implicates the
Seventh Amendment” at all. Jarkesy, 603 U.S. at 120. Second—and only if the answer to
that first question is yes—we ask “whether the ‘public rights’ exception to Article III
jurisdiction applies.” Id.; accord Axalta, 144 F.4th at 473, 475; see also AT&T, Inc. v.
Federal Commc’ns Comm’n, 149 F.4th 491, 497–502 (5th Cir. 2025) (conducting this two-
step analysis), cert. granted, 2026 WL 73092 (U.S. Jan. 9, 2026) (mem.) (No. 25-406). 3
We make quick work of the first step. The government “does not contest that the
money penalty challenged here ‘implicates the Seventh Amendment.’” Gov’t Br. 26
(quoting Jarkesy, 603 U.S. at 125); accord Oral Arg. 24:33–25:06. We thus decide this case
on the assumption that Jarkesy’s first requirement is satisfied.
That leaves the second step: “whether the public rights doctrine justifies the
administrative adjudication of [HHS]’s enforcement action.” Axalta, 144 F.4th at 475. To
be sure, Jarkesy described some of the Court’s public rights “precedents” as “confusing,”
3 During oral argument, petitioner suggested—echoing an amicus brief—that there may not even be a “‘public rights’ exception to Article III jurisdiction.” Jarkesy, 603 U.S. at 120; see Oral Arg. 9:42–:55. That argument fails twice. First, petitioner failed to preserve any such argument by not making it in the opening brief. See Grayson O Co. v. Agadir Int’l LLC, 856 F.3d 307, 316 (4th Cir. 2017). Second, the current “law on the books” recognizes a public rights exception and we as an inferior court have no authority to abrogate it. Axalta, 144 F.4th at 484 (Bibas, J., concurring); cf. Jarkesy, 603 U.S. at 127 (concluding that case “does not fall within the exception”).
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603 U.S. at 130 (quotation marks removed). But we agree with the Third Circuit that the
Jarkesy Court “resolved the public rights question . . . in a notably uncomplicated way: by
analogizing [Jarkesy’s] enforcement action to the action at issue in one public rights
precedent—Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989)—and distinguishing it
from the enforcement action at issue in another—Atlas Roofing Co. v. Occupational Safety
& Health Review Commission, 430 U.S. 442 (1977).” Axalta, 144 F.4th at 473–74. Taking
the same approach, we ask whether the enforcement proceeding here “more closely
resembles the essentially common law action in Granfinanciera” or “the action in Atlas
Roofing.” Id. at 475; see id. (noting Jarkesy “distinguished, but did not overrule, . . . Atlas
Roofing”).
Jarkesy explained the difference between Granfinanciera and Atlas Roofing and
why the issue before it fell on Granfinanciera’s side of the line. In Jarkesy—as in
Granfinanciera—Congress had “simply reclassified a pre-existing, common law cause of
action.” Granfinanciera, 492 U.S. at 60. The actions in both Jarkesy and Granfinanciera,
though not identical to any common law causes of action, “target[ed] the same basic
conduct as” well-recognized common law actions, “employ[ed] the same terms of art, and
operate[d] pursuant to similar legal principles.” Jarkesy, 603 U.S. at 134. In contrast, the
statute authorizing the enforcement action in Atlas Roofing “did not borrow its cause of
action from the common law,” avoided “common law terms of art,” and created a “self-
consciously novel” type of action “‘unknown to the common law.’” Id. at 136–37 (quoting
Atlas Roofing, 430 U.S. at 461).
Like the Third Circuit in Axalta, we conclude petitioner had no Seventh Amendment
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right to a jury trial here because this action “cannot be distinguished from the enforcement
action considered in Atlas Roofing.” Axalta, 144 F.4th at 475–76. As in Atlas Roofing,
Congress did not merely repackage (or assign to a different party) a common law cause of
action when it authorized proceedings like the one HHS initiated here. See Jarkesy,
603 U.S. at 135; cf. Sun Valley Orchards, LLC v. U.S. Dep’t of Lab., 148 F.4th 121, 124,
128–29 & n.4 (3rd Cir. 2025) (concluding claims brought under a statute authorizing the
Secretary of Labor to sue on migrant laborers’ behalf to “enforce[]” the laborers’ “work
contract[s]” sufficiently “resemble[d] [a] common law breach of contract” claim to
distinguish the case from Atlas Roofing), cert. granted, 2026 WL 1127242 (U.S. Apr. 27,
2026) (mem.) (No. 25-966). Instead, Congress created a detailed series of new
requirements that apply only to “skilled nursing facilit[ies]” that voluntarily participate in
Medicare, and are administered by both state and federal government actors. 42 U.S.C.
§ 1395i-3(a) (defining that term); see § 1395i-3(a)–(k) (laying out the requirements);
cf. Jarkesy, 603 U.S. at 137 (describing the statute authorizing the Atlas Roofing action as
“self-consciously novel” “[i]n both concept and execution”). Those requirements are
enforced by an intricate and “novel” enforcement scheme that would have been “unknown
to the common law.” Jarkesy, 603 U.S. at 138–39 (quotation marks removed); see id. at
137 (distinguishing schemes that merely “enable the Federal Government to bring or
adjudicate claims that traced their ancestry to the common law”). Indeed, petitioner
conceded at oral argument (see Oral Arg. 2:35–4:35), that it would have had no right to a
jury trial had regulators refrained from seeking a monetary fine and instead withheld
reimbursement, see 42 U.S.C. § 1395i-3(h)(2)(B)(i); “appoint[ed] temporary management
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to oversee the operation of [petitioner’s] facility,” § 1395i-3(h)(2)(B)(iii); or even
terminated its ability to participate in Medicare altogether, see § 1395i-3(h)(2)(A)(i).
“Atlas Roofing binds us. And under its rule, this case involves public rights.” Axalta, 144
F.4th at 482 (Bibas, J., concurring).
Seeking to avoid that conclusion, petitioner insists this enforcement scheme is
analogous to unspecified (but nonetheless “traditional”) common law tort “concepts,”
“obligation[s],” “standards of care,” and “penalt[ies].” Petr. Reply Br. 4–6 (emphasis
removed). We disagree.
The first reason for our disagreement involves the underlying basis for the relevant
obligation. True, the HHS enforcement action here involved petitioner’s failure to fulfill a
duty. But that duty did not stem from any common law duty of care that applies to all
people or those who participate in a particular type of activity. Instead, the duty here arose
from petitioner’s choice to participate in a voluntary government program (Medicare)
where public funds are spent to achieve public benefits. The statute and regulation the
agency concluded petitioner violated required it to “establish and maintain” an adequate
infection control policy, 42 U.S.C. § 1395i-3(d)(3)(A) (emphasis added); accord 42 C.F.R.
§ 483.65 (2016), which includes “comply[ing] with [petitioner’s] own policies and relevant
state and local public health authority requirements.” Amicus Br. 22. We see no indication
that those policies and requirements—which can be quite detailed and “technical,” Almy v.
Sebelius, 679 F.3d 297, 302 (4th Cir. 2012) (quotation marks removed)—simply codify
and restate general common law tort duties of care.
What is more, the obligations at issue here are—unlike common law torts—
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untethered to any injury. “Suits at common law to vindicate private rights required both
injuria (a legal wrong) and damnum (actual, concrete harm).” In re: Express Scripts, Inc.,
___ F.4th ___, ___ n.8 (4th Cir. 2026) [2026 WL 13555370, at *5, n.8]. Here, in contrast,
Congress has authorized HHS to take various actions—including imposing monetary
penalties—even when no resident has suffered or is at immediate risk of suffering harm.
See 42 U.S.C. § 1395i-3(h)(2)(A)(i) (authorizing “any of the remedies described in
subparagraph (B)” even absent immediate jeopardy). And even when (as here) HHS seeks
greater penalties because a facility “immediately jeopardize[d] the health or safety of its
residents,” § 1395i-3(h)(2)(A)(ii), HHS still is not required to show that any resident
suffered actual harm. See 42 C.F.R. § 488.301 (defining “[i]mmediate jeopardy” as “a
situation in which the provider’s noncompliance with one or more requirements of
participation has caused, or is likely to cause, serious injury, harm, impairment, or death to
a resident” (emphasis added)); see also § 488.845(b) (describing factors affecting the size
of a penalty).
Thus, having considered the nature of the enforcement proceeding here, we
conclude it is not sufficiently analogous to any common law tort to be properly
characterized as just a “reclassified” common law tort action. Axalta, 144 F.4th at 474
(quotation marks removed).
Petitioner and its amici also briefly suggest the enforcement proceeding here can be
analogized to a common law contract action. Once again, we disagree. To be sure, facilities
must “execute a [p]rovider [a]greement” with the government “to participate in” Medicare.
Amicus Br. 15 n.5. But as we just explained, Congress authorized enforcement actions like
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this one for mere violations of statutory and regulatory obligations without requiring the
government to incur any actual damages as a non-breaching party to a provider agreement.
See 42 U.S.C. § 1395i-3(h). We know of no similar common law contract claims.
Like Atlas Roofing, this case involves “a new cause of action, and remedies therefor,
unknown to the common law.” 430 U.S. at 461. This case is also “markedly different from
the fraud cause of action considered in Granfinanciera and Jarkesy.” Axalta, 144 F.4th at
477. So, like the Third Circuit in Axalta, we conclude that HHS’s ability “to enforce” the
statutory and regulatory obligations at issue here “is a public right that Congress may assign
to the executive branch for adjudication without offense to the Seventh Amendment.” Id. 4
III.
Petitioner’s remaining challenges—that HHS acted arbitrarily or capriciously and
that the record does not support the agency’s decision—also fail. HHS concluded that:
(1) the then-applicable version of 42 C.F.R. § 483.65 required petitioner to follow its
internal infection control policy; and (2) petitioner violated the policy by failing to
“proceed with evaluati[ng]” its residents with positive skin tests and negative x-rays for
latent TB treatment. JA 79–80. Both conclusions survive judicial scrutiny.
Start with petitioner’s assertion that HHS’s decision was arbitrary or capricious
because it penalized petitioner’s failure to meet “new[,] implied regulatory requirements.”
Petr. Br. 45; see 5 U.S.C. § 706(2)(A). Petitioner insists that, under the relevant statute and
4 Given our holding that petitioner had no right to a jury trial, we need not reach petitioner’s “corollary” contention that HHS “should have held off seizing—or should have returned”—certain funds pending any such trial. Petr. Br. 44.
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regulations, the only thing it had to do was follow county health officials’ orders, and
because the county issued no orders, it fulfilled those obligations by doing nothing. We
disagree. The statute and regulations required petitioner not just to “establish” “an infection
control program” but also to “maintain” that program. 42 U.S.C. § 1395i-3(d)(3)(A);
42 C.F.R. § 483.65 (2016). Petitioner does not dispute HHS’s conclusion that its program
required petitioner to “evaluat[e]” residents with positive skin tests and negative x-rays
“for” latent TB treatment. JA 176; see Petr. Reply Br. 12. Because petitioner thus had
notice of its obligation to conduct those evaluations, HHS did not impose any
impermissible “ad hoc” requirements. Petr. Br. 46 (quotation marks removed); cf. Golden
Living Ctr. – Mountain View v. Secretary of Health & Hum. Servs., 832 Fed. Appx. 967,
974–83 (6th Cir. 2020) (holding it was arbitrary and capricious to penalize a facility for
“fail[ing] to consider adding additional staffing” because no statute or regulation—either
expressly or through incorporation—required facilities to do so). 5
The record also contains “evidence that a reasonable mind might accept as adequate
to support [HHS’s] conclusion” that petitioner did not, in fact, proceed with the required
evaluations. Putnam Ctr. v. United States Dep’t of Health & Hum. Servs., 770 Fed. Appx.
630, 638 (4th Cir. 2019) (quotation marks removed) (explaining 42 U.S.C. § 1320a-7a(e)’s
5 In its reply brief, petitioner also argues its policy’s direction to “proceed with evaluation” for latent TB treatment for residents with positive skin tests and negative x-rays did not require petitioner to “do the[] evaluations.” Petr. Reply Br. 11 (emphasis added). For one thing, petitioner forfeited that argument by failing to raise it in its opening brief. See Grayson O, 856 F.3d at 316. For another, we disagree. The policy is internal and thus governs only petitioner, directing it (and only it) to proceed with—in other words, conduct—such evaluations.
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“substantial evidence” standard). As the ALJ found (and petitioner did not contest),
residents with positive skin tests and negative x-rays had “clinical records” that lacked any
“note[s]” of their latent TB diagnoses. JA 97. Petitioner also “provided no evidence that
[its] attending physicians or nurse practitioners were asked to evaluate th[ose] residents”
“for [latent TB] treatment or asked to order [such] treatment; and if not, why not.”
JA 98. But see 42 C.F.R. § 483.65(a)(1) (requiring facilities to “maintain an infection
control program” “under which” they “[m]aintain[] a record of . . . corrective actions
related to infections”). We thus reject petitioner’s assertion that the agency’s decision was
not supported by substantial evidence.
* * *
The Seventh Amendment did not guarantee petitioner the right to a jury trial here,
and HHS’s decision was supported by substantial evidence and neither arbitrary nor
capricious. The petition for review is
DENIED.