whether the action of a regulated entity is "state" action depends on "whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself."
How later courts described this case
- whether the action of a regulated entity is "state" action depends on "whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself."
- affirming dismissal of plaintiff's due process claim because defendant's act of termination did not constitute "state" action
- nursing home decision to discharge or transfer Medicaid patients did not rise to level of state action
Written by the judges who cited it.
The opinion
STATE OF MAINE SUPERIOR COURT
KENNEBEC, ss. CIVIL ACTION
DOCKET NO. AP-01-8
e002.
DEN-KEN~ 5/2
MARY ELLEN GEARY,
Petitioner
Vv. DECISION AND ORDER
STATE OF MAINE,
DEPARTMENT OF BEHAVIORAL DONALD L. ¢
AND DEVELOPMENTAL SERVICES,
Respondent
ee
This matter is before the court on respondent's motion to dismiss the petition for
review of final agency action filed pursuant to M.R. Civ. P. 80C and 5 M.R.S.A. § 11001.
At issue before the court is whether the decision of a private mental health facility may
be considered “final agency action” for the purposes of judicial review. Based on the
rationale discussed below, this court finds that the decision of Spring Harbor hospital
dismissing the petitioner’s grievance is not reviewable by this court as a “final agency
action.”
I. Facts and Procedural History
As this decision is predicated upon the State’s motion to dismiss, the court will
consider the material allegations of the petition as admitted. Bussell v. City of Portland,
1999 ME 103, ¥ 1, 731 A.2d 862. The facts presented in the petition are as follows. In
May, 2001, petitioner Mary Ellen Geary was a psychiatric patient at Spring Harbor
hospital, a private institution in South Portland. She had been involuntarily committed
pursuant to 34-B M.R.S.A. §§ 3861-3871 (Supp. 2001). Geary alleges that while she ©
wasbeing transferred from one area of the hospital to another, she fell and broke her .
knee. She claims Spring Harbor failed to properly respond to her condition and her
knee was not x-rayed until six days after the fall when it was finally discovered to be
broken.
Geary filed a grievance, through counsel, alleging that the medical treatment she
received violated her rights under the Rights of Recipients of Mental Health Services
(RRMHS).! Her Level I grievance was denied by Spring Harbor who maintained that
the level of treatment Geary received was the same as that of other similarly situated
patients. Spring Harbor characterized her complaint as improper under the RRMHS
and suggested it be brought as one for professional negligence under the Maine Health
Security Act, 24 M.R.S.A. §§ 2501-2511. Record, Ex. C.
Geary then filed a Level II grievance by appealing to the chief administrative
officer of the facility pursuant to Sect. VII (G)(9)(a)(v) of the RRMHS. The CEO of
Spring Harbor responded to Geary’s Level II grievance, without hearing, by finding the
grievance was “without apparent merit” and did not properly lie under the RRMHS.
Record, Ex. E.
Section VII (J)(3)(c) of the RRMHS provides that “grievances without apparent
merit may not be appealed administratively beyond Level IJ. This dismissal constitutes
1 The Rights of Recipients of Mental Health Services is a set of rules promulgated pursuant to
the Maine Administrative Procedures Act, 34-B M.R.S.A. § 3003 (1988 & Supp. 2001). The RRMHS
includes a guide for grievance procedures for any recipient who feels their basic rights have been
violated The grievance process follows three sequential levels: Level I requires a grievance be filed
with the supervisor of the unit or program; Level II grievances are addressed by the administrator of
the facility and; Level III grievances are appealed to the Commissioner of the Department of
Behavioral and Developmental Services. RRMHS, Sect. VII(G)(2).
final agency action.” Geary claims she is aggrieved by this denial of a Level III hearing
and relies on language from the RRMHS that provides “if no hearing was held at Level
II, a hearing shall be held at Level III.” RRMHS, Sect. VII(G)(9)\(c)(ii). Based upon the
language from section VII(J)(3)(c) referring to the dismissal of a Level IT grievance as
“final agency action,” Geary has filed a petition for judicial review of that decision
pursuant to MLR. Civ, P. 80C.
The State now moves to dismiss the petition based on the argument that it was
not a party or participant in the matter appealed from and is therefore an improper
respondent in the present appeal.
II. Discussion
The State argues in its motion to dismiss that it cannot be a party to an appeal
where it took no part in the decision below. To further bolster this argument, it points
out that it cannot file a certified record as required for review of agency decisions
pursuant to MLR. Civ. P. 80C(f) and 5 M.R.S.A. § 11005.
Geary argues that Spring Harbor’s decision is attributable to the State because
the rule empowering the CEO of Spring Harbor to dismiss the grievance was
promulgated by the same agency now named as respondent. In response to the State’s
argument concerning the administrative record, Geary contends that the
Administrative Procedures Act provides for just such an occurrence at 5 M.R.S.A. §
1106(1)(D), which states:
In cases where an adjudicatory proceeding prior to final agency action
was not required, and where effective review is precluded by the absence
of a reviewable administrative record, the court may either remand for
such proceedings as are needed to prepare such a record or conduct a
hearing de novo.
Geary asserts the State may certify that they have no record, which would leave her
free to request the relief provided above.
The court is now faced with three options: dismiss for lack of jurisdiction, impute
agency status to Spring Harbor, or find the Department of Behavioral and
Developmental Services responsible for the Spring Harbor decision. The petitioner
argues in support of the latter of these three options and urges the court to cloak the
decision of Spring Harbor with the garb of state action for purposes of this 80C appeal.
As an initial matter, the court looks to the statutes for help in clarifying the
relevant definitions. Under the Maine Administrative Procedures Act, any person who
is aggrieved by final agency action is entitled to judicial review. 5 MRS.A. § 11001(1).
“Final agency action” is defined as “a decision by an agency which affects the legal
rights, duties or privileges of specific persons, which is dispositive of all issues, legal and
factual, and for which no further recourse, appeal or review is provided within the
agency.” 5 M.R.S.A. § 8002(4). “Agency” is defined by statute to mean “any body of
State Government authorized by law to adopt rules, to issue licenses or to take final
action in adjudicatory proceedings, including, but not limited to, every authority, board,
bureau, commission, department or officer of the State Government so authorized... “
5 M.R.S.A § 8002(2). Under the plain meaning of the language laid out above, there is
no indication that the actions of Spring Harbor fit within the parameters of final agency
action under the Maine APA.
While regulations cannot supercede contradictory statutory language, the court
next turns to the language of the RRMHIS itself for guidance. Notwithstanding the
“final agency action” language from section VII of the RRMHS, which was drafted in
1984 when very few psychiatric units existed outside the state-run Bangor Mental
Health Institute and Augusta Mental Health Institute, the only direct reference to state
authority over private entities is contained in Part A, Section I, the Statement of Intent..
It reads, in relevant part, “[p]rocedural mechanisms that exist to ensure enhancement of
these rules include the licensing authority of the Department of Mental Health and
Mental Retardation pursuant to 34-B M.R.S.A § 1203-A, the grievance and complaint
procedures set forth in these rules, and the Department's contracting authority.” It is
reasonable to conclude from this language that, in the absence of a contract between
the State and Spring Harbor, the only avenue left open to the petitioner concerning her
erievance lies with the State’s licensing authority over Spring Harbor. To conclude
otherwise and regard the decision of Spring Harbor as a state action would then lead to
enforcement of the court's remedy by the Commissioner of BDBS, limited by licensing
considerations.
Lastly, the court looks to the common law for an indication of whether Spring
Harbor may be considered a state actor for purposes of judicial review. See, ¢.g.,
Staples v. Bangor-Hydroelectric Co., 561 A.2d 499 (Me. 1989) (affirming dismissal of
plaintiff's due process claim because defendant's act of termination did not constitute
"state" action). See also Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449,
453, 42 L.Ed.2d 477, 484 (1974) (whether the action of a regulated entity is "state" action
depends on "whether there is a sufficiently close nexus between the State and the
challenged action of the regulated entity so that the action of the latter may be fairly
treated as that of the State itself."). The cases are largely premised on due process
violations or § 1983 claims for which the courts have created tests in order to fairly
attribute the actions of a private entity to the State.
Geary urges the court to follow a test laid out by the Supreme Court in Blum v.
Yaretsky? which outlines three areas for the court to consider regarding whether a
private party has committed a state action. In Blum, the Court held that private nursing
home patients receiving Medicaid had failed to show that the nursing homes decisions
regarding discharges and transfers rose to the level of state action for purposes of 14th
_amendment due process protection. The first prong of the Blum test requires a showing
of “sufficiently close nexus” between the State and the challenged action of the
regulated entity. Blum, 457 U.S. at 1004. Geary contends that the RRMHS, by their very
existence and prescribed grievance procedures, provide the nexus required here. The
second prong of Blum requires a showing that the State has exercised such coercive
power or provided such significant encouragement that the decision by the private
entity must “in law be deemed to be that of the State.” Id. Mere approval of or
acquiescence in the private party’s actions is sufficient to meet this prong. Id. Geary
argues that the phrasing of the RRMHS that deems the finding of a grievance without
apparent merit to be a “final agency action” satisfies this prong. The third part of the
test provides that the “required nexus may be present if the private entity has exercised
powers that are ‘traditionally the exclusive prerogative of the State.’ ” Id. (citing Jackson
v. Metropolitan Edison, 419 U.S. 345, 353 (1974). Geary maintains that a decision which
becomes a “final agency action” is an unmistakable exercise of a power that is
traditionally the prerogative of the State. —
The three-prong Blum test is not adequately met here. In Blum the Court focused
on the standards underlying the decisions and found no state action when the
2102 S. Ct. 2777, 73 L. Ed. 2d 534 (1982) (nursing home decision to discharge or transfer Medicaid
patients did not rise to level of state action).
determination turned on judgments “made by private parties according to professional
standards that are not established by the State.” Blum, 457 U.S. at 1008. Similarly to the
facts in Blum, the decision made here by Spring Harbor was by a private party based on
medical judgments and according to common law professional standards that have not
been established by the State. While the RRMHS establishes a framework for the filing
of grievances in both public and private institutions, it cannot be read so broadly as to
insinuate the State into a position where it becomes a “joint participant’ in the process.
See Jackson v. Metropolitan Edison, 419 U.S. at 357-58. The RRMHS Statement of Intent
provides that the rules are intended to “ensure treatment consistent with ethical and
professional standards.” RRMHS, Part A, Sect I. If anything, this is simply a
restatement of the standard regarding the duty of care under most professional
negligence actions. Likewise, the prescribed levels of grievance procedures contained in
the RRMHS should not be construed as an exercise of coercive power as required under
Blum. The Court in Blum noted that extensive regulation and funding mechanisms for
private parties are not enough to transform that party’s decisions into state action.
Blum, 457 U.S. at 1011. The substantive decisions made in the course of those
proceedings are entirely the decisions of the private hospital and cannot be said to be
decisions made under color of state law.
The use of the phrase “final agency action” in section VII (J)(3)(c) of the RRMHS,
by this court’s reading, has selective application; it provides for judicial review of Level
II grievance procedures undertaken by public mental health institutions, but not to
those performed by private actors. The petitioner has exposed a hole in the statutory
patchwork that makes up Maine’s mental health regulation. Unfortunately, it is the
Legislature and not the courts who possess the authority necessary to mend the
problem brought to light by this case.
Ill. Conclusion
Therefore, for all the reasons above, the entry shall be:
State’s Motion to Dismiss is GRANTED; Petition for review of final agency action
is DENIED.
Dated: May 4% _, 2002
Donald H. Marden
Justice, Superior Court
Date Filed__ 11/16/01 Kennebec Docket No. __APO01=80
. County
Action Petition for Review
80C
Mary Ellen Geary VS. State of Maine, Dept. of Behavioral and
Plaintiff’s Attorney Defendant’s Attorney Development Services
Mark C. Joyce, Esq. Christopher C. Taintor, Esq. (Spring Harbor
24 Stone Street 415 Congress Street
P.O. Box 2007 P.O. Box 4600
Augusta, Maine 04338-2007 Portland, Maine 04112-4600
- Katherine Greason, AAG (State of ME)
Department of Attorney General
6 State House Station
Augusta ME 04333-0006
Date of
Entry
11/16/01 Petition for Review, filed. s/Joyce, Esq. (attached exhibits A-E)
Certificate of Service, filed. s/Joyce, Esq.
Application of Plaintiff to Proceed without Payment of Fees, filed.
s/Mary Ellen Geary
Petitioner's Affidavit in Support of Application for Leave to Proceed
in Forma Pauperis, filed. s/Mary Ellen Geary
11/28/01 ORDER ON APPLICATION TO PROCEED WITHOUT FEES, Marden, J. (dated 11/26/01)
Copies mailed to atty of record.
11/30/01 Notice of Appearance, filed. s/Taintor, Esq.
12/31/01 Entry of Appearance of Katherine Greason, AAG on behalf of State of
Maine Department of Behavioral and Developmental Services, filed. s/K.
Greason, AAG.
12/31/01 Motion to Dismiss, filed. s/K. Greason, AAG.
1/22/02 Petitioner's Opposition to Motion to Dismiss and Incorporated Memorandum
of Law, filed. s/Joyce, Esq.
3/7/02 Hearing had on Motion to Dismiss held on 3/6/02 with Hon. Justice Donald
Marden, presiding. Tape #601 Index 1967-3040.
Mark Joyce, Esq. for’ the Plaintiff. Katherine Greason, AAG for the State
and Christopher C. Taintor, Esq. for Defendant Spring Harbor.
Oral arguments made to the court. Court to take matter under advisement.
6/3/02 DECISION AND ORDER, Marden, J. (dated 5/31/02)
State's Motion to Dismiss is GRANTED; Petition for review of final agency
action is DENIED.
Copies mailed to attys of record.
Copies mailed to Deborah Firestone, Garbrecht Library and Goss.
Notice of removal of record mailed to attys.