United States District Court, W.D. New York
May 4, 2004.
BEECHWOOD RESTORATIVE CARE CENTER, et al., Plaintiffs,
LAURA E. LEEDS, et al., Defendants
The opinion of the court was delivered by: DAVID LARIMER, Chief Judge, District
DECISION AND ORDER
Plaintiffs Brook and Olive Chambery ("the Chamberys") commenced this
action against various state and federal officials, alleging that
defendants, through the deliberate misuse of their regulatory powers,
forced a nursing home owned by the Chamberys, Beechwood Restorative Care
Center ("Beechwood" or "the facility") to be permanently shut down.
Plaintiffs allege that defendants did so to punish the Chamberys for
having pointed out problems with respect to defendants' own actions and
Plaintiffs have asserted several claims under 42 U.S.C. § 1983, and a
claim against the federal defendants pursuant to Bivens v. Six Unknown
Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971).
They seek compensatory and punitive damages for the alleged violations of
their rights. Defendants have moved for summary judgment dismissing the
complaint, and plaintiffs move for summary judgment on the issue of liability
as to one of their claims against two of the defendants.
I. FACTUAL BACKGROUND*fn1
A. Events Leading up to Revocation of Plaintiffs' Operating Certificate
Prior to being shut down, Beechwood was a skilled nursing facility on
Culver Road in Rochester, New York, and was operated by the Chamberys as
a partnership. Complaint ¶¶ 10, 12, 14. As a skilled nursing facility,
Beechwood held an operating certificate from the New York State
Department of Health ("DOH").
As a requirement of its operating certificate, Beechwood became
certified as a participant in the Medicare and Medicaid programs
("Medicare/Medicaid").*fn2 One of the consequences of this was that
Beechwood was subject to inspections by DOH to evaluate its compliance
with federal and state regulations. Any deficiencies that are found are
ranked from "A" (an isolated deficiency causing no actual harm and only the potential for minimal harm to a
resident) to "L" (a widespread deficiency causing immediate jeopardy to
residents' health or safety).
Plaintiffs allege that DOH generally found few or no violations until
1996, when Brook Chambery*fn3 began sending what eventually became a
"voluminous" series of letters and other papers to DOH and other state
officials protesting various aspects of DOH's policies and practices, and
advocating a number of changes. Plaintiffs Rule 56.1 Statement ¶ 59.
The details of these complaints need not be set forth here, but the gist
of them was that certain DOH practices and requirements were illogical,
unnecessary, or unduly burdensome.
In November 1996, DOH surveyors conducted their annual review of the
facility, and alleged three level "D" deficiencies at Beechwood. (A "D"
deficiency is defined as an isolated deficiency with no actual harm, but
with the potential for more than minimal harm that would not put
residents' health or safety in immediate jeopardy.) Beechwood opposed the
deficiency charges, and one of them was later rescinded by DOH. Affidavit
of Brook Chambery (Docket #66) ¶ 63.
A series of deficiency charges followed over the next few weeks,
however, along with Chambery's opposition to those charges. Chambery
wrote to DOH officials during this time and complained about
improprieties and flaws in the survey process. Again, some of the
deficiencies were eventually rescinded. Plaintiffs' Rule 56.1 Statement
¶¶ 64-68. Other problems and conflicts between Beechwood and DOH occurred
over the next several years. These included an Article 78 proceeding
("the Langeveld litigation") brought by Beechwood against DOH in late
1996 concerning the proposed discharge of a certain patient (which was resolved by a consent order in March 1997), and a series of letters
from Chambery to DOH officials complaining about various matters. In
particular, from 1997 through 1999, Chambery wrote and called various DOH
officials, arguing for the elimination of Medicaid Access Agreements,
which required that, in order to receive state approval for any major
changes, the facility had to agree to admit a certain percentage of
Medicaid patients. Chambery Aff. ¶ 49.
Plaintiffs state that they refused to sign such an agreement,
because-due to the low levels of Medicaid reimbursement-it would have
imposed a severe economic hardship on Beechwood. As a result, plaintiffs
allege, they were unable to expand or make desired changes to Beechwood.
At the same time, however, plaintiffs allege that other facilities in the
area had signed such agreements and were not complying with them, yet DOH
did nothing to enforce those agreements. Therefore, Chambery (who states
that he was too conscientious to sign a Medicaid Access Agreement with
the intention of not complying with it, see Chambery Aff. ¶ 51), engaged
in a "multi-year campaign with DOH to either enforce or eliminate this
[Medicaid Access Agreement] requirement. . . ." Chambery Aff. ¶ 53.
Plaintiffs allege that due to Chambery's activities in this regard, DOH
officials developed a high level of hostility toward Chambery and
Beechwood. According to plaintiffs, Chambery was a thorn in DOH's side
because he exposed problems with DOH requirements and procedures, and
because of the time that DOH officials were forced to spend in order to
address Chambery's complaints.
As a result, plaintiffs allege, DOH stepped up its deficiency charges
against Beechwood. Chambery, frustrated with DOH, complained to HCFA
about DOH's conduct and asking HCFA to conduct an investigation.
Plaintiffs' Rule 56.1 Statement ¶ 95(c). Plaintiffs allege that DOH was aware of Chambery's complaints to HCFA, and that this only increased the
DOH officials' animosity toward Chambery. More-and more
serious-deficiency findings continued during 1998. (Again, some of these
would eventually be reduced or rescinded.)
All of these events, however, are only a prelude to what plaintiffs
call "the Offensive," which began in the Spring of 1999. According to
plaintiffs, this was a multi-pronged effort by all the defendants to
force plaintiffs out of the health-care industry altogether, and to cause
them financial ruin and public humiliation. Plaintiffs allege that DOH
officials' actions included, among other things: enlisting the support of
certain HCFA officials; conducting excessive surveys of Beechwood;
trumping up charges against Beechwood; revoking Beechwood's operating
certificate; and annulling its establishment approval, which in effect
meant that the Chamberys could not sell the facility to a different
B. State Administrative Proceedings
On June 23, 1999, DOH commenced an administrative hearing ["DOH
hearing"] seeking to revoke Beechwood's operating certificate. At the
hearing, which lasted fourteen days, DOH presented evidence to
substantiate its claims of deficiencies, and plaintiffs attempted to show
that the charges were false.*fn4
Following the conclusion of the hearing, the administrative law judge
("ALJ") issued a 97-page report finding that DOH had proven most of the
charges against Beechwood by a preponderance of the evidence. It is
unnecessary here to summarize each of his findings, but a sample of some of the ALJ's findings will indicate the nature of
the problems that he found existed at Beechwood.
The ALJ found, for example, that certain "residents were neglected by
Beechwood in several significant aspects of care," such as failing to
notify a resident's physician of significant changes in the resident's
condition. See ALJ's decision (Affidavit of Anna Colello (Docket #53)
Ex. A) at 66-67. In one instance, the ALJ found that Beechwood had failed
to timely notify a resident's physician regarding a "potentially serious
or life threatening illness. . . ." Id. at 68. With respect to another
resident, the ALJ found that Beechwood had failed to fulfill its
obligation to provide appropriate care and monitoring, and that "the
record [wa]s devoid of documentation as to the last 5 hours of the
resident's life. . . ." Id. at 67.*fn5
The ALJ found that Beechwood failed to take adequate measures to
prevent or treat some residents' pressure sores. Id.at 71-72. He found
that one resident has been "subjected, without any reasonable
explanation, to an indwelling catheter in place for almost 9 days instead
of Beechwood following a physician order of 3 to 4 days." Id.at 76. With
respect to certain residents who were at risk of falling, the ALJ also
found that Beechwood had failed to meet its obligation to take sufficient
steps to try to prevent injury to the residents. Id. at 74. He also found
that "a number of Beechwood residents were not provided adequate pain
control," and that in several instances various physicians' orders were
not carried out. Id. at 78. The ALJ also found that DOH "took numerous steps in its attempt to keep
Beechwood open," and that Beechwood failed to take advantage of the
opportunities given it by DOH to rectify the problems with the facility.
Id. at 65. Instead, he stated, plaintiffs' "plans of correction"
submitted to DOH consisted in large part of "denials of events that were
found, attacks on the messengers (surveyors) and a barrage of information
not relevant or consequential to the cited deficiencies." Id. at 90. In
fact, the ALJ found, "no correction was taking place." Id.
Although the ALJ found a number of specific deficiencies, he also
concluded that "[t]he major problem, however, lies in Beechwood's
management philosophy which appears to be more interested in arguing and
fighting all attempts for compliance than at actually correcting
deficiencies." Id. at 91. As the ALJ put it, "the combat should have
occurred AFTER substantial compliance had been obtained." Id. at 66.
In his report, the ALJ also stated that he "found Beechwood's claims of
a conspiracy against it and/or Mr. Chambery to be a total, complete, and
ridiculous fabrication without a shred of evidence or support." Id. at
55. He stated that he "did not perceive any bias or ill will from the
Department [of Health] witnesses against Beechwood, its' [sic] employees
or owners." Id. With regard to certain "internal E-mails, memos and other
communications between Department employees," the ALJ stated, "I cannot
see the sinister motives the Mr. Brook Chambery seems to attach to
everyone [sic] of them. . . . Mr. Chambery attempts to allege poisonous
motives where none exists." Id. at 64. The ALJ concluded that "there
[wa]s nothing in the record which indicate[d] to [him] that the actions
taken and/or conduct of the Department was motivated by or taken in
retaliation for Brook Chambery's exercise of any of his rights." Id. Based on his deficiency findings, the ALJ recommended that Beechwood's
operating certificate be revoked, and that a civil penalty of $54,000 be
assessed. Id. at 92. Based upon the ALJ's report and recommendations, DOH
in turn issued an order revoking Beechwood's operating certificate, and
imposing a $54,000 penalty, on December 23, 1999. Colello Aff. Ex. B.
Plaintiffs allege that DOH also refused to allow them to sell Beechwood's
operating certificate or their establishment approval*fn6 unless
plaintiffs agreed to certain conditions, including releasing all the DOH
defendants from liability for their actions, and agreeing that Chambery
would never again take a management or ownership position in the health
care field in New York.
In addition, in a letter to plaintiffs' counsel dated February 2,
2000, defendant Henry M. Greenberg, DOH's general counsel, stated, in
response to plaintiffs' prior inquiry concerning whether and under what
conditions plaintiffs could transfer Beechwood to a third party, that
"since the operating certificate of Beechwood has been revoked and the
facility closed, Beechwood no longer is considered an existing resource
of residential health care facility (`RHCF') beds and there is no
`certificate of need or establishment approval' to be transferred."
Plaintiffs' App. vol. II at M002049. Greenberg stated that any potential
buyer of the facility's land, building and equipment who wished to use
the property as an RHCF would be required to submit a certificate of need
("CON") application to DOH, but that in general, DOH was "not reviewing
and acting on new CON applications for additional RHCF beds in the state
at th[at] time." Id. at M002050. According to plaintiffs, this had the effect not only of prohibiting plaintiffs
themselves from operating the facility, but also of making it impossible
for anyone to do so, thereby rendering the facility almost worthless.
Plaintiffs contend that this was contrary to New York statutes and
On February 28, 2000, plaintiffs filed an Article 78 petition in New
York State Supreme Court, Monroe County, seeking, inter alia, a
declaration that the DOH administrative proceeding, the ALJ's report, and
the DOH's December 23 order were null and void, for a number of reasons.
The petition alleged in part that "DOH's misconduct was in retaliation
against and to penalize Petitioners for their exercise of constitutional
rights in vigorously advocating for improvements in the nursing home
industry and regulatory system over the last three years." Steinman Aff.
Ex. A 126.
On May 15, 2000, Justice Francis A. Affronti issued a decision finding
that plaintiffs' petition "raise[d] a question relative to the
sufficiency of the evidence at the [DOH] hearing . . .," which required
that the Article 78 proceeding be transferred to the appellate division
under C.P.L.R. § 7804(g).*fn7 Following that ruling, however, the
proceeding seems to have stalled. At oral argument in this action,
plaintiffs' counsel indicated that, through inaction or error by the
Monroe County Clerk's office, or for other unknown reasons, the
proceeding never actually got transferred to the appellate division. Plaintiffs candidly admit, however, that they had "no incentive to
press the Article 78" proceeding, Plaintiff's Memorandum of Law at 71, so
they simply ceased prosecuting it. That lack of incentive, plaintiffs
state, arose partly from the fact that Beechwood had already been
closed, and, since damages are not available in an Article 78
proceeding, a favorable outcome in that proceeding would have been a
Pyrrhic victory. Plaintiff's counsel also conceded at oral argument,
however, that plaintiffs were concerned that if the Article 78 proceeding
were prosecuted to its conclusion, the state court's rulings on the
issues presented in the Article 78 petition might be given collateral
estoppel effect in any later actions initiated by plaintiffs, such as the
instant lawsuit. Counsel stated that this was a concern in part because
plaintiffs would not have had the same opportunities for discovery in the
Article 78 proceeding that they do in this action, and because plaintiffs
could not have raised in that proceeding the full range of constitutional
claims that they do here. See also Plaintiff's Memorandum of Law at 72
(noting that plaintiffs "chose not to press for an adjudication" in the
Article 78 proceeding due to the risk of a "premature adjudication" of
plaintiffs' constitutional claims).
C. Federal Administrative Proceedings
Contemporaneously with the state administrative proceedings, events
concerning Beechwood were taking place at the federal administrative
level as well. In a letter to Olive Chambery dated June 29, 1999, HCFA
informed her that it had terminated Beechwood's Medicare and Medicaid
provider agreement effective June 17, 1999. Plaintiffs'App. vol. II, at
M001281. The letter stated that this decision was based on DOH's
determination that the facility had not achieved substantial compliance
with federal requirements. Beechwood then requested a federal administrative hearing to challenge
the termination and the findings on which it was based. An ALJ held a
hearing on April 3 and 17, 2001, and issued a decision in which he
concluded that Beechwood was not in substantial compliance as of DOH's
May and June 1999 surveys. Prior to the hearing, the ALJ also ruled,
inter alia, that he lacked authority to hear and decide Beechwood's
challenges both to the actions taken against it by DOH, and to the
constitutionality of those actions. Ultimately, however, he did sustain
HCFA's determination to terminate Beechwood.
Beechwood appealed the ALJ's decision to the Department of Health and
Human Service's Departmental Appeals Board ("DAB"), alleging various
prejudicial errors by the ALJ. Without reaching the merits of whether
Beechwood was in substantial compliance at the time of the relevant
surveys, the Board reversed and remanded the case to the ALJ for further
proceedings, including a new decision. In so doing, the DAB instructed
the ALJ regarding a number of procedural matters concerning which it
found that the ALJ had erred.
On remand, the ALJ made certain additional findings and rulings, but
again upheld HCFA's termination of Beechwood. Beechwood again appealed to
the DAB, which held that the ALJ's findings of fact and conclusions of
law in both of his decisions should be sustained except as to two
specific examples regarding individual residents. See Beechwood Sanitarium
v. Centers for Medicare & Medicaid Services, DAB No. 1906, 2004 HHSDAB
LEXIS 3 (H.H.S. Jan. 23, 2004). The DAB added that since its reversal of
the ALJ's findings regarding those two allegations did not affect the
outcome of its evaluation of the deficiency findings to which the
allegations were directed, the DAB declined Beechwood's request that it
overrule the ALJ's findings and conclusions sustaining deficiencies found
in DOH's surveys. 2004 HHSDAB LEXIS 3, at *240. The DAB further declined Beechwood's request that it remand to the ALJ to
consider additional deficiency findings from those surveys which he had
found unnecessary to address. The DAB stated that "[i]n the context of
this case and the findings which [the DAB] ha[d] sustained, any outcome
of any further review of findings not already evaluated could not alter
the clear evidence of noncompliance of a kind more than adequate to
support the imposition of the appealed remedies." Id. at *240-41. The DAB
concluded that the ALJ did not err in concluding that HCFA had the
authority to impose the remedies appealed by Beechwood.
D. Actions in this Court
On June 8, 1999, while the state administrative charges were pending
against Beechwood, plaintiffs filed an action in this Court seeking to
enjoin DOH from taking further action to revoke their operating
certificate. The Court denied plaintiffs' request for a temporary
restraining order on June 17, 1999, on the grounds of both Younger
abstention, see Younger v. Harris, 401 U.S. 37, 47-53 (1971), and because
plaintiffs had not exhausted their administrative remedies. See
Transcript, Beechwood v. Leeds ("Beechwood I"), 99-CV-6235 (Ex. A to
Affidavit of Darren Longo (Docket #57 in the instant action)). That
action was ultimately dismissed by stipulation of the parties in August
In 2002, however, while the federal administrative proceedings were
continuing, plaintiffs commenced the instant action. The complaint names
seventeen DOH defendants and two federal defendants. The complaint
asserts: (1) a § 1983 claim for denial of procedural due process,
based on DOH's annulment of Beechwood's establishment approval; (2) a
§ 1983 claim for First Amendment retaliation; (3) a § 1983 claim
for denial of equal protection; (4) a § 1983 claim for "abuse of governmental power" and denial of substantive due process, see
Complaint at 75; (5) a § 1983 claim for "denial of [plaintiffs'] right to
federal law supremacy," see Complaint at 76; and (7) Bivens claims
against the federal defendants.*fn8
In separate motions, the DOH and the federal defendants have moved for
summary judgment dismissing the complaint. Plaintiffs have cross-moved
for "partial" summary judgment on the issue of liability on their
procedural due process claim against two of the DOH defendants, Greenberg
and Edmund Altone.
A. Collateral Estoppel
The DOH defendants assert that plaintiffs are barred from raising
most, if not all, of their claims under the doctrine of collateral
estoppel. Collateral estoppel, also known as issue preclusion, "means
simply that when an issue of ultimate fact has once been determined by a
valid and final judgment, that issue cannot again be litigated between
the same parties in any future lawsuit." Leather v. Eyck, 180 F.3d 420,
424 (2d Cir. 1999) (quoting Schiro v. Farley, 510 U.S. 222, 232 (1994)).
Defendants contend that plaintiffs should be precluded from relitigating
in this action the issues that the DOH ALJ decided in his 97-page
A "federal court must give to a state-court judgment the same
preclusive effect as would be given that judgment under the law of the
State in which the judgment was rendered" pursuant to both the United States Constitution and the Full Faith and Credit Act,
28 U.S.C. § 1738. Migra v. Warren City Sch. Dist. Ed. of Educ.,
465 U.S. 75, 81 (1984); accord Leather, 180 F.3d at 424. The same is true
of decisions by state agencies. "[W]hen a state agency acting in a
judicial capacity resolves disputed issues of fact properly before it
which the parties have had an adequate opportunity to litigate . . .
federal courts must give the agency's factfinding the same preclusive
effect to which it would be entitled in the State's courts." University
of Tennessee v. Elliott, 418 U.S. 788, 799(1986) (internal punctuation
and quotation marks omitted). See also Kosakow v. New Rochelle Radiology
Associates, P.C., 274 F.3d 706, 728 (2d Cir. 2001) ("in § 1983 actions,
the factual determinations of a state administrative agency, acting in a
judicial capacity, are entitled to the same issue and claim preclusive
effect in federal court that the agency's determinations would receive in
the State's courts") (citing Elliott, 478 U.S. at 798-99)
Under New York law,
[c]ollateral estoppel, or issue preclusion, gives
conclusive effect to an administrative agency's
quasi-judicial determination when two basic conditions
are met: (1) the issue sought to be precluded is
identical to a material issue necessarily decided by
the administrative agency in a prior proceeding; and
(2) there was a full and fair opportunity to contest
this issue in the administrative tribunal. The
proponent of collateral estoppel must show identity of
the issue, while the opponent must demonstrate the
absence of a full and fair opportunity to litigate.
Jeffreys v. Griffin, 1 N.Y.3d 34, 39 (2003) (citations omitted). The
party opposing the application of estoppel has the burden of proving that
it did not have a full and fair opportunity to litigate the claims in
question. Kosakow, 274 F.3d at 733 (citing Ryan v. New York Tel. Co.,
62 N.Y.2d 494, 501 (1984)).
The New York Court of Appeals has also stated that in the context of
determinations of administrative agencies, "the doctrine [of collateral
estoppel] is applied more flexibly, and additional factors must be considered by the court. These additional requirements
are often summed up in the beguilingly simple prerequisite that the
administrative decision be `quasi-judicial' in character." Allied
Chemical, an Operating Unit of Allied Corp. v. Niagara Mohawk Power
Corp., 72 N.Y.2d 271, 276 (1988) (citations omitted), cert. denied,
488 U.S. 1005 (1989).
Plaintiffs contend that this doctrine does not apply here, first,
because the ALJ did not (in fact, could not) resolve the identical issues
presented in the case at bar. Plaintiffs assert that they could not
litigate their constitutional claims in the DOH hearing. Furthermore,
plaintiffs argue, even if they could have presented their constitutional
claims before the ALJ, he lacked jurisdiction and authority to pass on
them. In support of this assertion, plaintiffs rely on the principle that
"[c]onstitutional questions obviously are unsuited to resolution in
administrative hearing procedures. . . ." Califano v. Sanders, 430 U.S. 99,
109 (1977); see also Hurlbut v. Whalen, 58 A.D.2d 311, 317 (4th Dep't
1977) ("the administrative agency lacked both the power and competence to
pass on the constitutionality of its own actions and procedures").
Plaintiffs, however, are blurring the distinction between res
judicata, or claim preclusion, and collateral estoppel, or issue
preclusion. "Under the doctrine of claim preclusion, [a] final judgment on
the merits of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in that action."
Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 476 (1998) (internal
quotation marks omitted; alteration in original); see also Blonder-Tongue
Labs., Inc. v. University of Ill. Found., 402 U.S. 313, 350 (1971).
Collateral estoppel, on the other hand, "means simply that when an issue
of ultimate fact has once been determined by a valid and final judgment,
that issue cannot again be litigated between the same parties in any
future lawsuit." Schiro v. Farley, 510 U.S. 222, 232 (1994) (internal
quotation marks omitted). Although plaintiffs may not have been able to litigate their
constitutional claims before the ALJ, they could, and did, litigate many
of the factual issues upon which those claims are based. That is made
clear by the ALJ's report, in which he expressly "found Beechwood's
claims of a conspiracy against it and/or Mr. Chambery to be a total,
complete, and ridiculous fabrication without a shred of evidence or
support," and that "there [wa]s nothing in the record which indicate[d]
to [the ALJ] that the actions taken and/or conduct of [DOH] was motivated
by or taken in retaliation for Brook Chambery's exercise of any of his
rights." See Parker v. Blauvelt Volunteer Fire Co., Inc., 93 N.Y.2d 343,
350 (1999) ("all of the factual issues dispositive of the constitutional
claims being raised in the instant [§ 1983] action were necessarily
decided in the prior article 78 proceeding").
It is also clear that the standards for application of collateral
estoppel have been met here. First of all, the DOH proceedings were
quasi-judicial in nature. In Jeffreys v. Griffin, 1 N.Y.3d 34 (2003), the
New York Court of Appeals addressed the issue of whether a finding of
sexual misconduct by a disciplinary hearing committee of the DOH's Board
for Professional Medical Conduct precluded the defendant physician from
contesting liability for assault and battery in the plaintiff patient's
civil action to recover money damages. The court stated that such
disciplinary hearings "are `quasi-judicial' in the general sense required
for application of the doctrine of collateral estoppel." Id. at 42. The
court added that "[t]his is so notwithstanding the differences between
these proceedings and a civil trial . . . the absence of juries, the
absence of CPLR article 31 disclosure and the inapplicability of the
rules of evidence followed in a civil trial." Id. *fn9 Although the DOH hearing in the instant case was not a physician's
disciplinary hearing, it too was "`quasi-judicial' in the general sense
required for application of the doctrine of collateral estoppel."
Plaintiffs were given notice of the charges against Beechwood, and had
the right to present evidence and examine witnesses. The determination of
the charges was made by an ALJ with authority to decide the case. See
N.Y. Pub. Health L. § 2806 (setting forth procedures for revocation of
operating certificates); Allied Chemical, 72 N.Y.2d at 276-77 (setting
forth factors to consider in deciding whether administrative agency's
determination is quasi-judicial).
In addition, the factual issues in the instant case relating to whether
the charges did in fact have a solid factual basis, or instead were
"trumped up" were identical to material issues that were necessarily
decided by the ALJ. The primary issue before the ALJ was whether DOH had
proven its deficiency charges by a preponderance of the evidence: in
other words, whether the evidence indicated that the alleged violations
had actually occurred. If the charges were true, then obviously they
could not have been spurious or concocted, as plaintiffs contend.
Given the fact that plaintiffs took the position that the charges were
unfounded, they had a clear incentive to litigate the truth of DOH's
allegations, and they certainly did litigate that issue: enough, in fact,
to fill 4000 pages of transcribed testimony. Nor were plaintiffs
prevented from attempting to show that the charges were motivated by ill will or
some other improper considerations, and that Beechwood was singled out
for inspections and deficiency findings, as demonstrated by the following
examples of plaintiffs' counsel's cross-examination of various DOH
Q. You are aware of a long-standing dispute
between Mr. Chambery and Mr. Rubin over a number
of issues, are you not?
A. I'm not aware of any kind of dispute. I'm not
sure what you mean by that.
DOH Hearing Transcript ("Tr.") vol. I (Docket #73, Ex. B) at 541.
Q. . . . On April 20th, did you not tell Ms.
Westbrook [a Beechwood employee] that there has been a
problem between Brook Chambery and Sandy Rubin, and
that Brook Chambery had sued Sandy and the Department
of Health, and that they, the Department of Health and
Rubin, were going to get him, meaning Chambery, for
A. I was not aware that there was even any kind of
suing going on in any 1 did not know about that. I did
not ever talk to Gwen about that. I didn't know
anything like that was going on.
Tr. at 542.
Q. In your judgment, would it be improper for a
Department of Health official to resent a facility's
use of that [informal dispute resolution ("IDR")]
A. We do not resent the use of that process.
* * *
Q. Do you think it would be improper for a person in
your position or Department of Health official to
punish a facility for its use of the IDR process?
Q. That would be improper, wouldn't it?
A. Yes, that would be improper. Q. And so to make it more specific, it would
certainly be improper for the Department of Health
to resent Beechwood or Mr. Chambery for his use of
the process, wouldn't it?
A. We do not resent him for that. We do not.
Tr. at 768-69.
Q. Ms. Baker, do you think it would be proper or
improper for the deficiency process to have a
* * *
Q. And wouldn't it also be improper for any
Department of Health official to have an outcome
in mind before even hearing from the facility?
Tr. at 771.
Q. Would you agree with me that it would be
improper if a Department of Health official said
that they were out to get Beechwood?
Q. So if, for example, Mr. Rubin had said to a
nurse at Beechwood, "The reason we are doing this
is because your boss, Mr. Chambery, has litigated
against the Department and so we're going to get
* * *
Q. that would be improper, would it not, Ms.
A. That would be improper.
Q. And if that statement, that same statement about
Mr. Chambery were made by one of your surveyors, such
as Cindy Francis, that would be entirely improper,
A. She did not make that statement. Q. That's not my question. If she made such a
statement, it would be entirely improper, would it
A. If she made the statement, yes.
Tr. at 772-73.
Q. . . . Did Mr. Rubin also write to you, "And while
we view Mr. Chambery as a poor NFO" I assume nursing
facility operator "we do not underestimate him as an
opponent in court. We believe strongly that our ducks
are in line. All of our surveyors are together on
In fact, that's the statement he wrote to you on
A. That refers to our Statement of Deficiencies.
* * *
Q. Well, what was happening here, Ms. Baker, is that
you, Mr. Rubin and Ms. Leeds had decided to draw the
line, and it didn't matter what Mr. Chambery and the
facility said; you were going to see that his license
A. Absolutely not. Absolutely not.
Tr. at 779-81.
Q. And isn't it true, Ms. Baker, that these
proceedings that you were bringing were solely
with the intention to get Mr. Chambery out of the
picture at Beechwood?
A. Absolutely not.
Tr. at 797.
Q. And isn't it your understanding that Mr.
Rubin was extremely upset that Mr. Chambery was
exercising his Stage I review rights?
A. That is not correct.
Q. Was he upset at all?
A. Not that I know of.
Q. Was he even irked a little? A. Not that I know of.
* * *
Q. And Mr. Rubin at no time after March ever
said to you, "Gee, it bugs me that Mr. Chambery
exercises his informal dispute resolution rights"?
Q. Never said that to you?
Q. And as far as you know, it doesn't bother Mr.
Rubin at all when someone exercises their due
Q. Does it bother you, Ms. Carlo, when Mr. Chambery
exercises his informal dispute resolution rights?
Q. And were you aware based on this E-mail [Rubin's
"our ducks are in line" e-mail] that Mr. Rubin
resented Mr. Chambery opting to contest the findings
through IDRs as he states in paragraph 1?*fn11
* * *
Q. Did you ever know prior to April 27 that Mr.
Rubin objected to Mr. Chambery exercising those
A. No, sir.
Tr. at 1020-21.
Q. To your knowledge, in your 30 years with the
Department, this is the first time the Department has
tried to decertify a residential care facility? A. With the exception of the early `70s when
there were proceedings related to non-conforming
wood frame structures.
Tr. at 1539.
Plaintiffs' counsel also presented the testimony of Gwendolyn
Westbrook, a Beechwood staff member, who stated that, when she noticed
that the DOH inspections were becoming almost incessant, she said to
Cindy Francis, a DOH inspector, "Oh, my God, what is this? Do I have to
find another job or what?" Westbrook testified that Francis then leaned
over toward her and said, "You know, there are better places to work at
than this and if you value your license, you wouldn't work here no
longer." Tr. at 2131-32. Westbrook also testified that one day Francis
told her, "You know, it's a personal thing." When Westbrook asked Francis
what she was talking about, Francis replied, "Between my boss and your
boss." Westbrook stated that Francis then "told [her] about a
lawsuit*fn12, " Tr. at 2132-33, and "said they was going to get
[Chambery]. There weren't no but. They weren't going to try to get him,
they were going to get him." Tr. at 2135.
Chambery himself also testified at the hearing. When asked if there had
been a "rocky relationship between [him] and Mr. Rubin," Chambery
replied, "There has been for quite a while." When asked why, he stated,
"I knew that when we put the Langeveld lawsuit on long ago, three years
ago, he was named in that lawsuit." Tr. at 2018. Chambery stated that
when he filed the suit naming Rubin as a defendant, Chambery knew that he
"was going to have trouble." Tr. at 2019.
Chambery also testified that at an IDR conference in 1998, Rubin said
to him, "What are you always doing this for [i.e., requesting IDR
conferences]? You are one of the few people that drives it to this
point." He stated that "things got very tense" during that conference, and
that at one point, Rubin "came out with a statement [that] `I have serious concerns
about the skin care in your facility.'" Chambery said that this surprised
him because Beechwood had "always been way under the norm in the number
of decubitus [bed sore] problems in our facility. And when [Rubin] came
out for the exit conference . . ., lo and behold we had a decubitus issue
in that Deficiency Report that had never been discussed anywhere up to
that date and time." Tr. at 2020. Prompted by his attorney, Chambery also
noted that this exit conference occurred on the same date as the date of
Rubin's "our ducks are in line" e-mail. Tr. at 2020-21.
To say, then, that plaintiffs were unable to litigate the factual
issues of whether the charges were unfounded or brought for a retaliatory
motive, whether Beechwood was unfairly singled out, and whether the
various DOH officials involved were acting in concert, is flatly
contradicted by the record. They could, and did, litigate those issues,
at considerable length.
I also find that plaintiffs have failed to carry their burden of
showing that they did not have a full and fair opportunity to litigate
these issues in the DOH proceedings. "The analysis [of whether the
opponent of issue preclusion had a full and fair opportunity to litigate
an issue] requires consideration of `the realities of litigation,' such
as recognition that if the first proceeding involved trivial stakes, it
may not have been litigated vigorously." Staatsburg Water Co. v.
Staatsburg Fire Dist, 72 N.Y.2d 147, 153 (1988) (citing Gilberg v.
Barbieri, 52 N.Y.2d 285, 292 (1981), and Schwartz v. Public Adm'r,
24 N.Y.2d 65, 72 (1969)). "In the end, the fundamental inquiry is whether
relitigation should be permitted in a particular case in light of what
are often competing policy considerations, including fairness to the
parties, conservation of the resources of the court and the litigants, and
the societal interests in consistent and accurate results." Staatsburg,
72 N.Y.2d at 147. Plaintiffs contend that they lacked a full and fair opportunity to
litigate these issues in the DOH hearing because they had insufficient
time to prepare for the hearing and inadequate discovery, and because
eleven of the nineteen defendants in this action were not called as
witnesses at the hearing (meaning that plaintiffs have never had an
opportunity to examine them under oath). In addition, plaintiffs note
that they were not the ones who chose the forum, and they allege that the
ALJ himself was biased, and sought to "whitewash" the conduct of the DOH
officials. According to plaintiffs, by the time of the hearing, "the fix
was in." Plaintiff's Memorandum of Law at 69.
Plaintiffs' contention that the ALJ was biased is entirely conclusory
and speculative. The fact that he was employed by DOH is not enough in
itself to show that his decision was predetermined. "That ALJs and
investigators are employed by the same agency, without more, is
insufficient as a matter of law to raise an inference of bias." Stone v.
City of New York, 240 A.D.2d 216, 216 (1st Dep't 1997) (citing Matter of
Children of Bedford v. Petromelis, 77 N.Y.2d 713, 723-724, vacated on
other grounds, 502 U.S. 1025 (1992)). If it were, then adjudicative
determinations of administrative agencies concerning charges brought by
the agencies' investigators could almost never be given preclusive
effect, which is clearly not the law in New York.
In addition, although the DOH hearing may not have afforded plaintiffs
the full panoply of procedures that are available to litigants in a civil
action, Jeffreys makes clear that this fact alone does not make
collateral estoppel inapplicable. See Jeffreys, 1 N.Y.3d at 42
(administrative hearing was quasi-judicial "notwithstanding the
differences between these proceedings and a civil trial"). The hearing
was anything but perfunctory in nature, and the transcript makes plain
that plaintiffs were able not only to cross-examine DOH's witnesses but
introduce a great deal of evidence of their own. See Bonheurv. Dresdner
Bank, A.G., No. 85 CIV. 4925, 1986 WL 4702, at *5 (S.D.N.Y. Apr. 14, 1986) (administrative hearing gave the plaintiff a full and fair
opportunity to litigate the issue of his misconduct, since: that issue
"was at the heart of the administrative hearing and was far more than
`briefly explored' at that hearing"; plaintiff was represented by counsel
at hearing; possibility of future litigation was clearly foreseeable;
proceeding "was a sufficiently extensive and fully adversarial hearing
presided over by an Administrative Law Judge"). Plaintiffs have also not
shown how additional discovery would have altered the outcome of the
Although courts do consider whether it was the proponent or opponent of
collateral estoppel that chose the forum whose findings are sought to be
given preclusive effect, see, e.g., Gilberg v. Barbieri, 53 N.Y.2d 285,
293 (1981), it is not a dispositive factor. See, e.g., Kanat v. Ochsner,
301 A.D.2d 456, 458 (1st Dep't 2003) (applying collateral estoppel
against defendants based on findings made in prior action in which they
were also defendants); Pahl v. Grenier, 279 A.D.2d 882, 883 (3d Dep't
2001) (defendant in civil action was estopped from relitigating issue of
his negligence, since jury in criminal trial had found him guilty of
reckless assault). Rather, New York courts have emphasized that
collateral estoppel is a flexible doctrine that should not be applied
mechanically, particularly when administrative agency determinations are
involved. See Jeffreys, 1 N.Y.3d at 40-41; O'Gorman v. Journal News
Westchester, 2 A.D.3d 815, ___ 770 N.Y.S.2d 121, 123 (2d Dep't 2003).
The court in Jeffreys held that the hearing committee's findings in
that case should not be given preclusive effect, not because the
defendant physician had not chosen the Board for Professional Medical
Conduct as a forum in which to litigate his alleged misconduct, but
because the committee's findings were made before the reversal of the
defendant's criminal conviction and his subsequent acquittal on retrial.
In fact, that court observed that "when the physician loses in the Hearing Committee, assuming a full and fair opportunity to contest
the identical issue, the physician has, indeed, had a day in court." 1
N.Y.Sd at 42.
The same is true here. Although plaintiffs may not have chosen the DOH
administrative forum, they did have a full and fair opportunity to
litigate the issues of whether Beechwood was deficient in some respects,
and whether the charged deficiencies were brought in good faith, or were
instead trumped-up or motivated by retaliation. Plaintiffs, then, did
have "a day in court."
Article 78 Proceeding
It should also be noted that plaintiffs themselves chose not to make
full use of the procedures that were available to them. They could have,
and in fact did, commence an Article 78 proceeding to review the outcome
of the DOH hearing, but by their own admission, plaintiffs chose not to
pursue it. Even if plaintiffs believed that the result of the DOH hearing
had been preordained, they had no reason to think, nor do they now
contend, that the same would have been true of the Article 78
proceeding. Although this may not bar them from bringing a § 1983 action
in this Court, plaintiffs can hardly be heard to complain that they were
not given a full and fair opportunity to contest the issues here when
they did not fully avail themselves of the opportunities that were open
to them.*fn13 For collateral estoppel to apply, all that is required is
a full and fair opportunity to litigate the issues in question. A party cannot deliberately choose not to
fully litigate those issues, and then argue that estoppel is inapplicable
simply because he failed to take advantage of that opportunity.
I also note that, while plaintiffs may not have been able to seek
damages in the Article 78 proceeding, they certainly could have raised
their constitutional claims there. See, e.g. " 93 N.Y.2d at 349-50
(discussing preclusive effect, in action under § 1983, of lower court's
rulings on plaintiff's constitutional claims in prior Article 78
proceeding); see also Moccio v. New York State Office of Court Admin.,
95 F.3d 195 (2d Cir. 1996) ("Although Moccio contends that he never
raised these precise constitutional claims in the Article 78 proceeding
. . ., it cannot be doubted that he could have raised these federal
constitutional claims in that proceeding").
In addition, based on the Court's recollection and review of its own
and the court reporter's notes, plaintiffs' counsel at oral argument made
the assertion that the New York Court of Appeals' decision in Parker
makes clear that it was perilous for plaintiffs to proceed with the
Article 78 proceeding because they would not have had a full and fair
opportunity to litigate their constitutional claims. In fact, Parker held
plaintiff ha[d] failed to meet his burden of
establishing that he lacked a full and fair
opportunity in the prior [Article 78] proceeding to
litigate the foregoing [constitutional] issues and
thereby avoid the preclusive effect of an adverse
determination of those issues. Nothing prevented him
from fully litigating the constitutional grounds he
advanced for invalidating the disciplinary
determination against him.
93 N.Y.2d at 350 (emphasis added).*fn14
Plaintiffs' argument that they had no opportunity to litigate
constitutional claims before the ALJ therefore rings hollow in light of
the fact that they could have asserted, and in fact did assert, such
claims in their Article 78 proceeding. Plaintiffs' Article 78 petition
alleged, inter alia, that: the DOH proceeding "was impermissibly
selective, punitive, retaliatory and unlawful," and "DOH's conduct toward
Beechwood was in retaliation for Petitioners' exercise of their
constitutional rights under the First and Fourteenth Amendments . . .,"
Steinman Aff. Ex. ¶¶ 167, 168; and "Petitioners were denied fundamental
due process during the DOH Administrative Proceeding . . .," id ¶ 184.
Plaintiffs also raised their "federal primacy" claim that it was improper
for DOH to conduct a hearing prior to the completion of the federal
administrative proceeding. Id ¶¶ 170-77.
There is also a suggestion in plaintiffs' papers that they could not
have obtained adequate discovery in an Article 78 proceeding. Parties to
an Article 78 proceeding can obtain discovery with leave of court,
however. Town of Pleasant Valley v. New York State Bd. of Real Property
Services, 253 A.D.2d 8, 15 (2d Dep't 1999). Furthermore, C.P.L.R. §
7804(h) provides that, where a proceeding was transferred to the
appellate division, and a triable issue of fact has been raised in the
proceeding, "the issue of fact shall be tried by a referee or by a justice
of the supreme court and the verdict, report or decision rendered after
the trial shall be returned to, and the order thereon made by, the
appellate division." Therefore, I do not accept plaintiffs' assertion that
the transfer of their Article 78 proceeding to the appellate division somehow rendered
that proceeding inadequate for resolution of their claims.
Federal Administrative Review
Plaintiffs also argue that the ALJ's findings cannot be given
preclusive effect because they differ in some respects from the findings
made in the federal administrative process. Specifically, with respect to
a few of the alleged deficiencies, the federal and DOH ALJs reached
differing conclusions about whether the deficiencies had been proven.
See Plaintiffs' "Decision Comparison Chart," Plaintiffs' App. vol. I, at
M002915-27. In addition, the final decision of the DAB in the federal
administrative proceedings reversed the federal ALJ's findings in two
respects. 2004 HHSDAB LEXIS 3, at* 118, 174.*fn15
Importantly, however, the DOH and federal ALJs, as well as the DAB, all
concluded that Beechwood was sufficiently in violation of the application
regulations to justify the penalties imposed on Beechwood. Thus, even if
the Court were to ignore any findings where the state and federal administrative authorities reached different conclusions,
there are still many factual findings concerning Beechwood's violations
as to which the state and federal authorities did not disagree.*fn16
Furthermore, it appears that the DOH hearing was more extensive and
comprehensive than the federal hearing. The federal hearing took two
days, as opposed to fourteen for the DOH hearing. Some of the evidence
presented to the federal ALJ consisted of excerpts from the transcript of
the DOH hearing. There were also many alleged deficiencies which the DOH
ALJ made findings on that the federal ALJ made no determination on.
Therefore, I see no reason why the ALJ's and DAB's decisions in the
federal administrative process should prevent the DOH's factual finding
that there were deficiencies at Beechwood serious enough to warrant
revocation of its operating certificate from being given preclusive
Collateral Estoppel Precedent in Second Circuit
I also note that my ruling on the collateral estoppel issue finds
support in another district court case from within this circuit, Daxor
Corp. v. Linden, No. 95 Civ. 7847, 1998 U.S. Dist. LEXIS 2819 (S.D.N.Y.
Mar. 10, 1998). In Daxor, the plaintiffs (a corporation and its president
and majority shareholder) operated a publicly licensed blood bank, sperm
bank and clinical laboratory. They brought an action against various
defendants, alleging that state and municipal officials conspired with
private individuals in the blood banking industry, to harass the
corporation and put it out of business, because the corporation posed a threat to more
established blood banks, and because the individual plaintiff had made
comments critical of the blood banking industry's safety standards.
The district court granted the defendants' motion for summary judgment
on the ground of collateral estoppel, because the plaintiffs' allegations
had already been litigated on the state level. In particular, the court
noted, the corporate subsidiary that operated the blood bank ("Idant")
had commenced two Article 78 proceedings, challenging certain actions by
DOH. Want's claims were rejected in both actions. In the first, a state
supreme court judge found "no legitimate claims of abuse of discretion,"
and in the second, the court-rejecting Want's claim of bias on DOH's
part-ruled that there was no evidence of bad faith or improper motives
behind DOH's actions. See id. 1998 U.S. Dist. LEXIS 2819, at *5. Idant
appealed both of these decisions-the latter unsuccessfully up to the New
York Court of Appeals. See Daxor v. N.Y. State Dep't of Health,
90 N.Y.2d 89 (1997). In ruling against Idant, the court again found that
Want's claims of bias were without merit. See id. at 101.
Similarly, DOH's allegations concerning the plaintiffs' sperm bank
operation had been the subject of an administrative trial (which,
coincidentally, also lasted fourteen days), at the conclusion of which
the ALJ found that Idant had committed certain violations. Again, Idant
raised the issue of bias and selective enforcement, and again those
claims were rejected by the ALJ, who found no evidence of a "hidden
agenda" on the part of DOH officials. 1998 U.S. Dist. LEXIS 2819, at
*6.*fn17 The plaintiffs in Daxor then brought an action in federal court,
asserting claims under § 1983 and other statutes. In its decision
granting the defendants' motion for summary judgment, the district court
stated that there were
two "decisive" issues that were necessarily decided in
previous State court and administrative actions. The
first is that Idant was not entitled to operate its
blood bank, semen bank and clinical laboratory because
of its repeated violations of State and City
regulations. The second is that the Defendants were
not involved in a "regulatory conspiracy" to deprive
Idant of necessary licenses in order to favor
not-for-profit blood banks. Because these allegations
are essential elements of all the causes of action
alleged by Plaintiffs, all of Plaintiffs' claims must
Id. at *15. The court added that "DOH's repeated findings of violations,
as well as its concerns about Want's "character and competence," were
necessarily determined in administrative proceedings and affirmed by the
Court of Appeals." Id.
The court concluded that the findings that Idant violated State
regulations were entitled to preclusive effect, and that "[a]s to
Plaintiffs' claims that they were the target of a `regulatory conspiracy'
among State and Municipal Employees to harass Idant and put it out of
business, both the Court of Appeals and an Administrative Law Judge
expressly found no evidence of bias or a conspiracy against Idant. These
decisions are also entitled to preclusive effect." Id. at 17. The court
also held that "there can be no § 1983 claims because Plaintiffs are
precluded from alleging a constitutional violation." Id. at *18 (citing
Baker v. McCollan, 443 U.S. 137, 140 (1979)).
Although each case is sui generis, I agree with the Daxor court's
analysis, and find it applicable here as well. As in Daxor, the central
issues in this case-whether Beechwood was in compliance with applicable
statutes and regulations, and whether the charges against them were
brought due to improper motives-were necessarily litigated and decided in
the state administrative proceedings. I also note that the Daxor court, rejecting the plaintiffs' contention
that the State defendants acted as both "accusers and judges," stated
that although "[preliminary determinations concerning licensing may
indeed be made by the Department of Health after investigation, . . .
Plaintiffs had-and fully exercised-their right to appeal that decision to
the New York State courts." Id. at 16. In the case at bar, of course,
plaintiffs also had a right to seek redress in the New York State courts,
but deliberately chose not to. That is no reason not give prelusive
effect to the ALJ's findings. A party should not be allowed to make a
conscious decision not to fully litigate an issue in an available forum,
and then argue, in a different, later forum, that the party was not given
a full and fair opportunity to litigate that issue in the first forum.
B. Plaintiffs' Claims: The Merits
My conclusion that the administrative findings should be given
preclusive effect in the case at bar, means that some, if not most of
plaintiffs' claims must fail. For example, their First Amendment
retaliation claim, which alleges that defendants' actions against
Beechwood were motivated by a desire to punish plaintiffs for having
exercised their right to free speech, is undercut by the DOH ALJ's
express finding that there was no conspiracy against plaintiffs.
As noted earlier, though, some of plaintiffs' claims do, arguably at
least, arise out of events that occurred after the DOH hearing. For
instance, plaintiffs' procedural due process claim arises out of DOH's
alleged annulment of the facility's establishment approval, which
allegedly occurred after plaintiffs' operating certificate was revoked.
The Court will, then, address each of plaintiffs' claims on the merits,
but bearing in mind that at least some of plaintiffs' allegations are
foreclosed by the DOH ALJ's decision. 1. Procedural Due Process Claim
In their first cause of action, plaintiffs contend that DOH denied
plaintiffs their right to procedural due process by annulling Beechwood's
establishment approval without notice or a hearing. In addition to
defendants' motion for summary judgment, plaintiffs have cross-moved for
summary judgment on this claim on the issue of liability only.
Plaintiffs state that the DOH's December 23, 1999 order adopting the
ALJ's report and recommendations meant that plaintiffs could no longer
operate Beechwood. But, plaintiffs add, the DOH defendants were not
satisfied; they would settle for nothing less than plaintiffs' complete
financial ruin. Therefore, according to plaintiffs, defendant Greenberg
saw to it that not only were plaintiffs prevented from operating the
facility, but also from selling or leasing the facility to someone who
was qualified to operate it.
In a letter to Greenberg dated January 6, 2000, plaintiffs' counsel
Assuming an otherwise qualified third party
buyer/operator (i.e. one who is already successfully
operating other facilities in New York under DOH
license), what, if any, conditions do the DOH,
Commissioner and/or Public Health Council impose on
the transfer and sale to such third party by the
Chambery partnership of the facility (i.e., the
building, equipment and real property) and the
associated certificate of need/establishment approval?
Plaintiffs' App. vol. II at M002684.
In a February 2, 2000 letter, Greenberg responded:
Initially, it should be noted that since the operating
certificate of Beechwood has been revoked and the
facility closed, Beechwood no longer is considered an
existing resource of residential health care facility
("RHCF") beds and there is no "certificate of need or
establishment approval" to be transferred.
Id at M002049. Greenberg added that "any potential buyer wishing to use [the land,
building and equipment at the facility] in order to operate a RHCF on the
site would be required to submit a certificate of need (`CON')
establishment/construction application. . . ." Id. Greenberg cautioned,
though, that plaintiffs should first contact a particular DOH official
"to discuss whether the Department believes there is a need for
additional RHCF beds in Monroe County. It is my understanding that, in
general, the Department is not reviewing and acting on new CON
applications for additional RHCF beds in the state at this time." Id. at
According to plaintiffs, this effectively prevented them from selling
Beechwood to a new operator. Plaintiffs assert that this deprived them of
a property interest without due process of law. Plaintiffs also contend
that Greenberg's action violated § 2801-a(10)(b)(i) of New York's
Public Health Law, which provides that "[n]o approval of establishment
shall be revoked, limited or annulled without first offering the person
who received such approval the opportunity to request a public hearing."
Plaintiffs' position, however, is based on a selective view of the
facts and a misinterpretation of the law. First, the simple fact is that
plaintiffs did close the facility in July 1999. Plaintiffs insist that
they did not do so "voluntarily," because, after the Medicare/Medicaid
residents left, plaintiffs could no longer afford to operate Beechwood.
Regardless of what plaintiffs' reasons for closing Beechwood were,
though, the fact remains that they did close it in July. Greenberg, then,
was correct in his February 2, 2000 letter when he stated that Beechwood
was not, at that time, considered "an existing resource of residential
health care facility (`RHCF') beds," and that there was, in effect,
nothing (other than the property itself) to transfer. Plaintiffs' contention that Greenberg's actions violated § 2801 of the
Public Health Law is incorrect. First, § 2801-a(10)(b)(i) is not
applicable here. DOH did not revoke the facility's establishment
approval; the facility had been closed for months. In that situation, to
reopen the facility under new ownership would indeed have required the
prospective new operator to obtain a certificate of need.
Section 2801-a(4)(1) provides in part that "[a]ny change in the person
who is the operator of a hospital shall be approved by the public health
council in accordance with the provisions of subdivisions two and three
of this section." Subdivision (2) provides in part that "[w]ith respect
to the incorporation or establishment of any hospital, as defined in this
article, the public health council shall give written approval after
[certain] requirements have been met." Among those requirements are the
submission of an application for approval of the establishment with the
public health council, and the public health council's approval of the
application. Subdivision (3) also provides in part that "[t]he public
health council shall not approve a certificate of incorporation, articles
of organization or application for establishment unless it is satisfied,
insofar as applicable, as to . . . the public need for the existence of
the institution at the time and place and under the circumstances
proposed. . . ."
Clearly, then, where a facility has ceased operations, a new owner
cannot simply walk in and reopen the facility. If Beechwood had lain
dormant and empty for twenty years, but plaintiffs had retained ownership
of the property, it would be absurd to think that they or anyone else
could decide to reopen it without going through the approval process set
forth in § 2801-a(4). Part of that process is the receipt of a
determination by the public health council that there is a public need
for the facility. Whether Beechwood had been closed for twenty years or
six months, however, the fact remained that it was closed, and its former
residents had gone elsewhere. To reopen it would functionally have been the same as opening a completely new facility.
Therefore, § 2801-a(10)(b)(i)'s requirement of a hearing before an
establishment's approval is revoked has no application here, and
Greenberg correctly informed plaintiffs' counsel that a prospective new
owner-operator would have to apply for a certificate of need under §
Plaintiffs' procedural due process claim therefore fails. Plaintiffs
received all the process that was due them in the state administrative
process that led to the revocation of their operating certificate. No
further process was due with respect to Beechwood's establishment
approval, since that approval was never actually revoked or annulled in
the first place.
2. First Amendment Retaliation Claim
Plaintiffs' second cause of action, alleging that defendants conspired
together to retaliate against plaintiffs in retaliation for plaintiffs'
having exercised their rights under the First Amendment, is largely
foreclosed by the DOH ALJ's factual findings. The ALJ found "Beechwood's
claims of a conspiracy against it and/or Mr. Chambery to be a total,
complete, and ridiculous fabrication without a shred of evidence or
support," and that "there [wa]s nothing in the record which indicate[d]
to [the ALJ] that the actions taken and/or conduct of [DOH] was motivated
by or taken in retaliation for Brook Chambery's exercise of any of his
rights." For the reasons already given, those findings are given
preclusive effect here. In addition, although some of plaintiffs' claims do arise out of events
that took place after the hearing, there is no evidence that defendants
entered into a conspiracy, or that they took retaliatory actions, after
the DOH hearing ended. Defendants' conduct here was objectively
reasonable, and plaintiffs have not provided sufficient evidence to
create an issue of fact about whether defendants acted out of retaliatory
There is some evidence that some of the defendants: made statements
referring to Chambery as "notorious" and "infamous," Plaintiffs' App.
vol. II, at M005417, 005425; expressed their intent not to "give in at
all" with respect to DOH's allegations against Beechwood, id. at
M005002; and, after learning that Beechwood had been terminated from the
Medicare/Medicaid program, sent emails to each other stating, "AMEN &
HALLELUJAH" and similar sentiments, id. at M005450. All of these
statements, though, are entirely consistent with defendants' stated
desire to enforce federal and state statutes and regulations governing
the operation of nursing homes and to ensure that the health and safety
of Beechwood's residents was not being jeopardized. If defendants'
statements at times seem to express frustration with Chambery, it does
not appear to have been because he had exercised his First Amendment
rights, but because defendants perceived him as obstructionist and
uncooperative in their efforts to determine whether there were
deficiencies at Beechwood. See id. at M005417 (email from defendant Rubin
complaining that Chambery "consistently harrasses [sic] our surveillance
staff . . . tries to intimidate them, humiliate them. . . ."
I realize the Court's obligation, on a motion for summary judgment, to
view the record in the light most favorable to the nonmoving parties, and
to draw all inferences in their favor. As the Second Circuit has
observed, however, "[n]ursing homes are a highly regulated industry, and
some tension between operators of homes and regulators is to be
expected. . . . " Blue v. Koren, 72 F.3d 1075, 1085 (2d Cir. 1995). Given DOH's inspections and
investigation of Beechwood, as well as its allegations of deficiencies
there (which were ultimately determined in both state and federal
administrative proceedings to have merit), it is hardly surprising that
there was "some tension" between plaintiffs and defendants, and that
defendants gave voice to that tension on occasion. In my view, that is
not enough to give rise to an issue of fact about defendants' allegedly
3. Equal Protection Claim
Plaintiffs also allege that by singling out plaintiffs for
investigation and revocation of their operator's license, defendants
denied them their constitutional right to equal protection under the
law. In effect, then, this claim is one of selective enforcement or
prosecution.*fn19 The Equal Protection Clause of the Fourteenth Amendment
is "essentially a direction that all persons similarly situated be
treated alike." City of Cleburne v. Cleburne Living Ctr., Inc.,
473 U.S. 432, 439 (1985). "The requirements for a selective-prosecution
claim draw on `ordinary equal protection standards.'" United States v.
Armstrong, 517 U.S. 456, 465 (1996) (quoting Wayte v. United States,
470 U.S. 598, 608 (1985)).
"[M]ere selective enforcement of a law is not unconstitutional. . . ."
Durruthy v. Pastor, 351 F.3d 1080, 1091 (11th Cir. 2003); see also Oyler
v. Boles, 368 U.S. 448, 456 (1962) (conscious exercise of selectivity in enforcement not itself an equal protection
violation unless "selection was deliberately based upon an unjustifiable
standard such as race, religion, or other arbitrary classification");
United States v. Matter, 818 F.2d 653, 655 (8th Cir. 1987) ("The mere
conscious exercise of some selectivity in enforcement does not in itself
create a federal constitutional violation"); United States v.
Lichenstein, 610 F.2d 1272, 1281 (5th Cir.) ("selective enforcement in
and of itself is not a constitutional violation"), cert. denied,
447 U.S. 907 (1980). Rather, "[i]n order to establish a violation of
equal protection based on selective enforcement, the plaintiff must
ordinarily show (1) the person, compared with others similarly situated,
was selectively treated; and (2) that such selective treatment was based
on impermissible considerations such as race, religion, intent to inhibit
or punish the exercise of constitutional rights, or malicious or bad
faith intent to injure a person." Lisa's Party City, Inc. v. Town of
Henrietta, 185 F.3d 12, 16(2d Cir. 1999)(quotes and citations omitted).
"A plaintiff generally must satisfy both elements to establish a claim of
selective enforcement. . . . " LaTrieste Restaurant v. Village of Port
Chester, 188 F.3d 65, 70 (2d Cir. 1999) (citing Zahra v. Town of
Southold, 48 F.3d 674, 684 (2d Cir. 1995), cert. denied,
528 U.S. 1187(2000)).
Plaintiffs have failed to make out either element. First, they have
failed to show that they were treated differently from other similarly
situated individuals. In attempting to make this showing, plaintiffs
argue that Beechwood was in fact one of the best nursing homes in the
state, if not the nation. Regardless of plaintiffs' subjective opinion in
that regard, however, and regardless of what others may have thought of
Beechwood, or what its reputation might have been at a certain time or
among certain people, both the DOH and federal ALJs found, after lengthy
hearings, that there were significant deficiencies at Beechwood.
Likewise, while plaintiffs may be correct in their assertion that Beechwood did not have a lengthy history of above-average
numbers of deficiencies, the actions taken against plaintiffs were not on
account of deficiencies or other problems from many years earlier, but
deficiencies that were found in the 1999 surveys.
Plaintiffs also contend that termination of a facility from the
Medicare/Medicaid program is a harsh, rarely-used sanction, that the DOH
hearing was "unusual and extraordinary," Plaintiffs' Memorandum of Law at
32, and that the DOH administrative proceedings were carried out on an
accelerated time frame. Aside from the fact that these assertions are
based largely on Chambery's own conclusory allegations, the fact that a
particular action or event is relatively rare, without more, is not enough
to satisfy the first prong of a selective enforcement claim. Certain
sanctions may rarely be imposed because there is rarely any reason to
impose them. Again, plaintiffs must show that they were treated
differently from other similarly situated individuals, and they have not
done so.*fn20 See King v. Haas, No. C2-00-1411, slip op. at 39-40
(S.D.Ohio Sept. 4, 2002) (granting summary judgment in favor of defendant
state health official on plaintiffs claim that his nursing homes were
subjected to unusually large and comprehensive surveys in retaliation for
plaintiff's having publicly criticized many proposed regulations of which
defendant was a proponent, where plaintiff presented no evidence that other similarly situated nursing
homes were not subjected to the surveys), aff'd for reasons stated by
district court, 85 Fed. Appx. 480 (6th Cir. 2004).
Plaintiffs also attempt to show that they were treated in a selective
manner when they sought approval for the sale of Beechwood to another
licensed operator in the Summer and Fall of 1999.*fn21 At some point
during the summer, the parties apparently began discussing settlement of
the proceedings against Beechwood, as part of which plaintiffs would
agree to sell the facility to a new owner. Chambery states that he had a
prospective buyer, Robert Chur, who owned a company that operated several
similar facilities in New York State.
DOH indicated to plaintiffs that, subject to certain conditions, it
would agree to settle the matter and temporarily suspend (rather than
revoke) plaintiffs' operating certificate to allow them a "reasonable
opportunity to sell and transfer ownership of the operation and real
property of the Beechwood facility to a new owner and operator duly
established and licensed under the Public Health Law." Plaintiffs'App.
vol. II at M002733. Those conditions were that the Chamberys: (1) agree
never again to take a management or ownership position in the regulated
health care field in New York; (2) surrender their administrator's
licenses; (3) release the DOH defendants from any and all claims relating
to Beechwood; and (4) pay a civil penalty of $54,000. Id. at M002730-37. Again, plaintiffs assert that imposing such conditions on the sale and
transfer of a facility is out of the ordinary and evidence of defendants'
ill will.*fn22 Plaintiffs contend that existing nursing homes are
"routinely" sold to other licensed operators with DOH approval without
such conditions being imposed.
The situation here, though, was anything but "routine." This was not
simply a proposed sale by an owner-operator who was retiring or moving
out of the state, for example. The circumstances here were that DOH had
charged Beechwood with serious deficiencies, which DOH believed were
attributable in large part to the Chamberys themselves, whom DOH
apparently considered to be poor nursing home administrators. It was not
irrational, then, for DOH to seek an agreement that the Chamberys never
again participate in the operation of a nursing facility. In addition,
plaintiffs had filed the Beechwood I action in June 1999, and given what
was by then the poisoned relationship between plaintiffs and defendants,
it was hardly remarkable that, in proposing a "global" settlement,
defendants insist that plaintiffs release them from any claims stemming
from the proceedings against Beechwood.
I find, then, that plaintiffs have failed to make out the second prong
on their equal protection claim as well. In reaching that conclusion, I
am mindful of the "strong presumption that the state actors have properly discharged their official duties. . . . " Stemler
v. City of Florence, 126 F.3d 856, 873 (6th Cir. 1997), cert. denied,
523 U.S. 1118 (1998). "[T]o overcome that presumption the plaintiff must
present clear evidence to the contrary; `the standard is a demanding
one.'" Id. (quoting Armstrong, 517 U.S. at 463. See also Gavlak v. Town
of Somers, 261 F. Supp.2d 214, 225 (D.Conn. 2003) ("Our determination .
. . is tempered by the policy of affording governmental decisions a
strong presumption of validity, which directs us to uphold a governmental
decision if there is `any reasonably conceivable state of facts that
could provide a rational basis for the classification'") (quoting Heller
v. Doe by Doe, 509 U.S. 312, 319 (1993)).
As the Second Circuit stated in Blue, 72 F.3d at 1085, "[t]his was not
a case in which regulatory officials scoured a municipal code to find a
forgotten provision passed during the Mexican-American War to trip up a
gadfly." The record demonstrates that defendants had valid, rational
reasons for their actions, and there is no evidence of any individuals
situated similarly to plaintiffs who were treated differently.
4. Abuse of Governmental Power/Substantive Due Process Claim
Plaintiffs' fourth cause of action is essentially a catch-all or
umbrella claim, alleging that defendants' various acts alleged in the
complaint constituted an "abuse of governmental power" and denied
plaintiffs their right to substantive due process. Complaint ¶ 295. To
some extent, these characterizations of defendants' acts are redundant of
each other, since the abusive use of governmental power is what the
substantive component of the Due Process Clause is designed to prevent.
See Howard v. Grinage, 82 F.3d 1343, 1349 (6th Cir. 1996); Pink v.
Lester, 52 F.3d 73, 75 (4th Cir. 1995); Minney v. Kradas, No. 3:01-CV-1543, 2004 WL 725330,
at *4 (D.Conn. Mar. 31, 2004) (citing County of Sacramento v. Lewis,
523 U.S. 833 (1998)).
"Government conduct may be actionable under section 1983 as a
substantive due process violation if it `shocks the conscience.'" Spear
v. Town of West Hartford, 954 F.2d 63, 68 (2d Cir.) (quoting Rochin v.
California, 342 U.S. 165, 172 (1952), cert. denied, 506 U.S. 819
(1992)). "A substantive due process claim based on allegedly tortious
conduct by a state actor therefore ordinarily requires evidence of
conduct that `can properly be characterized as arbitrary, or
conscience-shocking, in a constitutional sense.'" Interport Pilots
Agency, Inc. v. Sammis, 14 F.3d 133 (2d Cir. 1994) (quoting Collins v.
City of Harker Heights, Texas, 503 U.S. 115, 128(1992);see also
Boyanowski v. Capital Area Intermediate Unit, 215 F.3d 396, 400 (3d Cir.)
(only the "most egregious official conduct can be said to be `arbitrary
in the constitutional sense'"), cert. denied, 531 U.S. 1011 (2000)); Rosa
R. v. Connelly, 889 F.2d 435, 439 (2d Cir. 1989) (requiring evidence that
official action was "arbitrary or irrational or motivated by bad
faith"), cert. denied, 496 U.S. 941 (1990); Chalfy v. Turoff, 804 F.2d 20,
23 (2d Cir. 1986) (requiring proof of "systematic and intentional
harassment" to transform official action causing economic injury into a
constitutional violation) (per curiam).
Defendants are entitled to summary judgment on this claim as well. As
my discussion of their other claims makes clear, I find no basis for
plaintiffs' allegations that defendants' conduct was arbitrary,
malicious, had no legitimate purpose, and so on. Rather, defendants'
conduct was rationally related to the state's legitimate interest in the
regulation of nursing homes, and "it can hardly be doubted that the
interest is of the highest order." Blue, 72 F.3d 1075, 1080(2dCir.
1995). 5. Federal Supremacy Claim
Plaintiffs assert a claim for what they describe as a "denial of
[their] right to federal law supremacy." Complaint ¶ 76. The basis for
this claim is plaintiffs' assertion that DOH should not have conducted a
hearing until plaintiffs had first had a hearing before HCFA. Although
plaintiffs cannot point to any specific statute or regulation prohibiting
state regulatory agencies from conducting revocation hearings prior to
HCFA hearings, they contend that the "premature" DOH hearing interfered
with or tainted the eventual federal administrative proceedings, and that
DOH "intruded into an area reserved for HCFA adjudication. . . ."
Plaintiffs' Memorandum of Law at 41.
An initial problem with this claim is that "the Supremacy Clause, of
its own force, does not create rights enforceable under § 1983. . . .
`S[T]hat clause is not a source of any federal rights'; it "`secure[s]"
federal rights by according them priority whenever they come in conflict
with state law.'" Golden State Transit Corp. v. City of Los Angeles,
493 U.S. 103, 107 (1989) (quoting Chapman v. Houston Welfare Rights
Organization, 441 U.S. 600, 613 (1979)). See also Howard v. Burlingame,
937 F.2d 1376, 1380 (9th Cir. 1991) ("the supremacy clause merely
safeguards federal interests against state infringement, and operates to
preempt state regulatory action without creating individual rights").
The problem here is that plaintiffs are not seeking to "secure" any
federal rights; they are not seeking injunctive relief, but only money
damages. The Court in Golden State did hold that the plaintiff in that
case, who alleged that the defendant city was preempted by the National
Labor Relations Act ("NLRA") from taking certain actions regarding the
plaintiff's taxicab franchise, could seek damages in a § 1983 action.
Although the Supremacy Clause provided the underlying basis for that
preemption, however, the Court made clear that the clause itself was not
the source of the plaintiff's rights enforceable under § 1983. Rather, it was the NLRA
itself that created those rights. See Golden State, 493 U.S. at 108 ("the
fact that a federal statute has preempted certain state action does not
preclude the possibility that the same federal statute may create a
federal right for which § 1983 provides a remedy").
In the case at bar, plaintiffs have pointed to no such federal
statute. Plaintiffs contend that the Medicare Act "may" supply their
basis for standing, see Plaintiffs' Memorandum of Law at 76 and n. 76,
but they have not identified any particular language in that act that
creates the rights alleged to have been violated here. Cf. Concourse
Rehabilitation & Nursing Center, Inc. v. DeBuono, 179 F.3d 38, 44 (2d
Cir. 1999) ("we look in vain to find any specific federal provision that
appellant cites as conflicting with the State [nursing home] audit
practices described above").
Plaintiffs also cite various federal regulations, none of which
expressly proscribe "premature" state administrative enforcement
proceedings, in an effort to show the federal government's primary role
in the Medicare/Medicaid field, but that simply is not enough to give
rise to a right enforceable under § 1983.*fn23 For that matter, I am
not persuaded that enforcement of nursing home standards is, as plaintiffs contend, "an area reserved for
HCF A adjudication by federal law and regulations . . .," Plaintiff's
Memorandum of Law at 41. Although nursing homes must comply with certain
federally created standards in order to participate in the
Medicare/Medicaid program, the states also have significant
responsibilities with respect to establishing and maintaining standards
to ensure adequate levels of resident care, see 42 U.S.C. § 1396a, and
primary responsibility for compliance enforcement, see
42 U.S.C. § 1395i-3(g)(1)(A). Furthermore, leaving aside
Medicare/Medicaid altogether, the state obviously has a strong interest
in seeing to it that nursing homes within its borders provide quality
care for their residents. See Blue, 72 F.3d at 1080 (observing that "it
can hardly be doubted" that "the government interest in the state and
federal regulation of nursing homes . . . is of the highest order")
The case upon which plaintiffs primarily rely, Sperry v. State of
Florida, 373 U.S. 379 (1963), is inapposite. In Sperry, the Court held
that the State of Florida could not enjoin the petitioner, who was
registered to practice before the United States Patent Office, but who
had not been admitted to practice law before the Florida or any other
bar, from performing certain tasks incident to the preparation and
prosecution of patent applications before the Patent Office, on the ground
that he was engaged in the unauthorized practice of law. Noting that a
federal statute expressly permitted the Commissioner of Patents to
authorize practice before the Patent Office by nonlawyers, the Court
stated that "by virtue of the Supremacy Clause, Florida may not deny to
those failing to meet its own qualifications the right to perform the
functions within the scope of the federal authority." Id. at 385.
The situation in Sperry, then, was far different from the one presented
in the case at bar. In Sperry, the Patent Office-an arm of the federal
government-had, pursuant to a federal statute, granted the petitioner the right to appear before that office, and the
state in effect sought to prevent him from doing so, on state law
grounds. In contrast, plaintiffs here, who seek only money damages, have
pointed to no specific federal right or federally-granted benefit or
privilege which was denied them or interfered with by the DOH defendants.
Plaintiffs had a right to a hearing before HCFA, but they were given such
a hearing. Their vague, amorphous theory that DOH somehow interfered with
the federal administrative process, or intruded into an area reserved for
the federal authorities, by holding a "premature" hearing of its own,
finds no support in the applicable statutes, regulations, or case law.
6. Bivens Claims
Plaintiffs' final claim, brought only against defendants Sue Kelly and
Michael Daniel ("the federal defendants"), alleges that they conspired
together and, acting under color of federal law, denied plaintiffs their
rights under federal law and under Article VI and the First and Fifteenth
Amendments of the United States Constitution.
In a so-called Bivens action, the victim of a constitutional violation
may recover damages against federal officials acting under color of
federal law. Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 510
(2d Cir. 1994); see Bivens, 403 U.S. at 389. Despite the absence of any
statute specifically conferring such a cause of action, "federal courts
typically analogize claims under § 1983 with Bivens actions." Tavarez v.
Reno, 54 F.3d 109, 110 (2d Cir. 1995).
Here, the claims asserted against the federal defendants are
essentially the same as some of the claims asserted against the DOH
defendants. Plaintiffs' claims against the federal defendants are
certainly no stronger than those against the DOH defendants; if
anything, they are weaker, since the DOH defendants appear to have been the primary actors here. Although
there is some evidence that the federal defendants supported DOH's
efforts to investigate Beechwood and to bring administrative charges
against it, that is unremarkable, given DOH's and HCFA's mutual
responsibilities and authority in the area of nursing home regulation.
Furthermore, to the extent that plaintiffs assert that the federal
defendants conspired with the DOH defendants to drive plaintiffs out of
business, plaintiffs' claims against the federal defendants are barred by
collateral estoppel. Although the DOH ALJ had no occasion to consider the
actions of any federal officials, his finding that there was no
conspiracy among the relevant DOH officials and employees means that
there was no conspiracy for the federal defendants to join. There is also
no evidence that the two federal defendants conspired with each other to
retaliate against plaintiffs. See Romer v. Morgenthau, 119 F. Supp.2d 346,
363 (S.D.N.Y. 2000) ("plaintiff must provide some factual basis
supporting a `meeting of the minds,' such as that defendants `entered
into an agreement . . . to achieve the unlawful end'") (citation
In addition, to the extent that plaintiffs' claims arise out of HCFA's
June 1999 termination of Beechwood's Medicare and Medicaid provider
agreement, the Medicare Act provides a meaningful remedy, see
42 U.S.C. § 405(g), and therefore aBivens claim would be precluded in any
event. See Schweiker v. Chilicky, 487 U.S. 412, 425-29 (1988) (where
Congress has provided what it considers an adequate remedial mechanism
for constitutional violations, the courts will not create a Bivens
remedy); see, e.g., Assar v. Crescent Counties Foundation For Medical
Care, 13 F.3d 215, 219 (7th Cir.), cert. denied, 513 U.S. 816 (1994);
Hilst v. Bowen, 874 F.2d 725, 727-28 (10th Cir. 1989); Neiman v.
Secretary of Dep't of Health and Human Services of the United States,
722 F. Supp. 950, 953 (E.D.N.Y. 1988). C. Qualified Immunity
Even if any of plaintiffs' claims otherwise had any merit, defendants
would be entitled to summary judgment on the ground of qualified
immunity, since plaintiffs have failed to show an improper motive on
their part. Although, given my findings that plaintiffs' claims are
meritless and barred by collateral estoppel, it is unnecessary to reach
the issue of qualified immunity, I discuss it only to make clear that
defendants are entitled to summary judgment on this ground as well. See
Duamutef v. Hollins, 297 F.3d 108, 113 n. 1 (2d Cir. 2002) ("once we
decide that there is no constitutional violation, there typically is no
need to address whether defendants are also protected by qualified
immunity-although qualified immunity becomes obvious at that point. In
this case, we take the further step of pronouncing the obvious-that
qualified immunity exists-to avail defendants of the Blue standard to
which they are entitled").
Government officials are shielded from civil liability under
42 U.S.C. § 1983 by the doctrine of qualified immunity so long as their
conduct "does not violate clearly established statutory or constitutional
rights of which a reasonable person would have known." Harlow v.
Fitzgerald, 457 U.S. 800, 818 (1982). To be "clearly established," "the
contours of the right must be sufficiently clear that a reasonable
official would understand that what he is doing violates that right."
Anderson v. Creighton, 483 U.S. 635, 640 (1987).
In Blue v. Koren, a case with facts similar to those in the case at
bar, the Court of Appeals for the Second Circuit reversed the district
court's denial of a motion for summary judgment brought by the
defendants, all of whom were current or former DOH employees. The
plaintiff, a nursing home operator, alleged that the defendants had engaged in "oppressive"
surveys of the nursing home in retaliation for DOH's loss in a prior
enforcement action against the nursing home.
In its decision, the Second Circuit held that in order to defeat the
defendants' motion, the plaintiff was required to "offer specific
evidence of improper motivation," and to "proffer particularized evidence
of direct or circumstantial facts . . . supporting the claim of an
improper motive in order to avoid summary judgment." 72 F.3d at 1083-84.
In so holding, the court observed that "[t]he reasonableness of the
[defendants'] conduct is itself substantial evidence in support of the
motion and requires in response a particularized proffer of evidence of
unconstitutional motive." Id. at 1084.
The court found such evidence lacking in Blue, Although there was
evidence of an acrimonious relationship between the nursing home and the
DOH in that case, the Second Circuit noted that
[n]ursing homes are a highly regulated industry, and
some tension between operators of homes and regulators
is to be expected, as are occasional adversary
proceedings. We do not believe that a showing that a
rigorous inspection followed a nursing home's victory
in an administrative proceeding is a sufficiently
particularized showing of improper motive. While such
a temporal sequence may fuel a nursing home operator's
suspicions, it does not suffice to satisfy the
heightened evidentiary standard.*fn24
Id. at 1085. Similarly, plaintiffs in the case at bar have not proffered
particularized evidence of improper intent on the part of defendants to
defeat defendants' well-founded motions for summary judgment. Plaintiffs'
opposition to defendants' assertion of qualified immunity is based largely
on plaintiffs' allegations of defendants' improper and unconstitutional
actions, which I have already found lacking or barred by collateral
In addition, as in Blue, plaintiffs here rely in part on the sequence
of events in support of their claim of improper motivation.
Specifically, plaintiffs contend that the increase in the frequency and
severity of deficiency findings began after Chambery began complaining to
and about DOH and its practices. As the Second Circuit stated in Blue,
this may have fueled Chambery's suspicions, but it is insufficient
evidence of improper motive to defeat a motion for summary judgment.
Furthermore, the DOH ALJ's findings indicate that Chambery's complaints
about DOH were to some extent the result, not the cause, of DOH's
inspections of Beechwood. As he put it, Chambery's usual response to
DOH's deficiency findings was not to correct the problem, but to engage
in "combat" with DOH.*fn25 D. Plaintiffs' Discovery Request
As part of their opposition to defendants' motions, plaintiffs contend
that, although they believe that they have presented sufficient evidence
to defeat defendants' motions, if the Court decides otherwise, then
plaintiffs should be allowed discovery pursuant to Rule 56(f).*fn26 This
request must be denied, for several reasons.
First, in a Case Management Order entered on December 17, 2002 by
then-Magistrate Judge William G. Bauer, upon the filing of any
pre-discovery dispositive motions on or before February 1, 2003,
plaintiffs' counsel was given until February 28, 2003 "to confer with
counsel for the defendants in an effort to reach an agreement regarding
tailored discovery related to plaintiffs' opposition to the motions."
Docket #42, ¶ 3. If the parties were unable to reach such an agreement,
they were directed to contact the Court on or before February 28 to
schedule a conference "to resolve any disagreements concerning the proper
scope of plaintiffs' request for discovery related to their opposition to
the motions." Id. ¶ 4. If the Court determined at that conference "that
a formal Rule 56(f) application was necessary in order to resolve the
discovery scope issue, the Court [would] issue a scheduling order for the
filing of such an application." Id. ¶ 5.
Plaintiffs have ignored this directive. Instead of attempting to reach
an agreement on discovery with defendants, or contacting the Court to
schedule a conference to address that issue, plaintiffs simply contend
that, if the Court finds that they have not proffered enough evidence to overcome defendants' motions, the Court should deny the motions and
allow plaintiffs to proceed with discovery. That is not what Magistrate
Judge Bauer's order directed them to do.
Secondly, plaintiffs have not made a sufficient showing under Rule
56(f), which requires them to submit an affidavit describing: (1) the
information sought and how it will be obtained; (2) how it is reasonably
expected to raise a genuine issue of material fact; (3) prior efforts to
obtain the information; and (4) why those efforts failed. Oneida Indian
Nation v. City of Sherrill, 337 F.3d 139, 167 (2d Cir. 2003), petition,
for cert. filed, 72 U.S.L.W. 3421 (Dec. 11, 2003) (No. 03-85). All that
plaintiffs have submitted in this regard is Chambery's affidavit, in which
he identifies certain individuals whom plaintiffs would seek to depose.
Chambery also cites a number of paragraphs from plaintiffs' Rule 56.1
Statement in which plaintiffs state that they lack knowledge or
information sufficient to admit or deny certain assertions made in
defendants' Rule 56.1 Statements. See Chambery Aff. ¶¶ 194-95.
This is insufficient under Rule 56(f).*fn27 Chambery does not state
exactly what evidence plaintiffs seek, what efforts have been made to
obtain it, or how that evidence can reasonably be expected to raise a
genuine issue of material fact. "While `Rule 56(f) discovery is
specifically designed to enable a plaintiff to fill material evidentiary
gaps in its case . . . it does not permit a plaintiff to engage in a
"fishing expedition.'" Paddington Partners v. Bouchard, 34 F.3d 1132, 1138 (2d Cir. 1994) (quoting Capital Imaging Assoc. v. Mohawk Valley
Medical Assoc., 725 F. Supp. 669, 680 (N.D.N.Y. 1989), aff'd, 996 F.2d 537
(2d Cir.), cert. denied, 510 U.S. 947 (1993)).
Furthermore, although it is technically correct that there has been no
formal discovery in this action, in a broader sense to say that
plaintiffs have not had any discovery is somewhat disingenuous.
Plaintiffs' appendix submitted in connection with the pending motions,
consisting of various affidavits and other documents, is some four inches
thick, and as stated, the parties here have already been through
considerable administrative proceedings. Plaintiffs do not appear to deny
defendants' assertion that, both in the DOH administrative proceedings
and in response to plaintiffs' requests under the New York Freedom of
Information Law ("FOIL"), DOH produced well over 1000 pages of documents
relating to DOH policies and procedures and its surveys of Beechwood.
See Reply Affidavit of Harold J. Rosenthal (Docket #83), ¶ 3.
Many of the facts relating to DOH's production of documents in response
to plaintiffs' FOIL requests are summarized in a decision by state
Supreme Court Justice Evelyn Frazee (Rosenthal Reply Aff. Ex. C), denying
Beechwood's and Chambery's ("petitioners") application for attorney's
fees in connection with their FOIL requests. Justice Frazee stated that
between August 1999 and February 2001, "petitioners submitted 17
different FOIL requests" to DOH, each of which "contained numerous
demands." Id at 2. In response, DOH turned over 600 pages of documents,
as well as another box of unsorted documents.*fn28
In April 2001, petitioners commenced an Article 78 proceeding before
Justice Frazee, alleging that DOH had not been responsive to twelve of
their seventeen requests. In June 2001, DOH produced an additional 350 responsive documents. After further
searching, DOH identified another 392 responsive documents in December
2001. Id. at 3. On June 20, 2002, Justice Frazee denied petitioners'
request for still more documents, finding that certain documents were
exempt and that no further response was required in regard to
Clearly, then, plaintiffs are already in possession of a vast number of
documents relating to the issues in this case. Chambery's conclusory
assertion that "some facts are still exclusively in the control of the
defendants," Chambery Aff. ¶ 193, is not enough to meet plaintiffs'
burden of showing that they need discovery in order to oppose defendants'
motions. See Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d
Cir. 1993) (party seeking a continuance under Rule 56(f) to permit
affidavits to be obtained or discovery to be had "may not rely simply on
conclusory statements"); accord L & L Started Pullets, Inc. v.
Gourdine, 762 F.2d 1, 3-4 (2d Cir. 1985); see also Agency Development,
Inc. v. Med America Ins. Co., ___ F. Supp.2d ___, 2004 WL 614568, at *9
(W.D.N.Y. Mar. 24, 2004) ("plaintiffs conclusory discovery request is not
sufficient to withstand summary judgment"). III. CONCLUSION
Defendants' motions for summary judgment (Docket #43, #49 and #59) are
granted, and the complaint is dismissed.
Plaintiffs' cross-motion for partial summary judgment (Docket #68) is
IT IS SO ORDERED.