Opposition Brief — Percy v. Cameo Convalescent Center, Inc.

f Office Supreme Court, US,

rilL2D

No. 84-505 OCT 27 jes

IEGASER i. STEVAS,

CLFRK

In The sill

Supreme Court of the United States

October Term, 1984

5

\)

DONALD E. PERCY, et al.,

Petitioners,

v.

Leah CAMEO CONVALESCENT CENTER, et al.,

Respondents.

t)

U

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

4)

Vv

BRIEF OF RESPONDENTS IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

WITH APPENDIX

ty

Vv

Rosert M. Hessiink, JR.

Attorney for Respondents

P.O. Box 2509

Madison, WI 53701

(608) 255-8891

October 25, 1984

/

COCKLE LAW BRIEF PRINTING CO., (800) 835-7427 Ext. 333

QUESTIONS PRESENTED

1. Is a denial of a right to receive referrals from

state and county agencies, without an opportunity to be

heard, a deprivation without due process, where postde-

privation state tort remedies may be available?

2. Was the trial court’s failure to give a conspiracy

instruction, where otherwise warranted, harmless error,

rather than the prejudicial error as found by the Court

of Appeals?

3. Did the due process clause of the Fourteenth

Amendment entitle the respondent to notice and an op-

portunity to be heard prior to a denial of the right to re-

ceive referrals from state and county agencies?

PARTIES TO THE PROCEEDINGS BELOW

Petitioners, Donald E. Percy, Darla C. Senn, Robert

Durkin, Charles J. Fiss, Jr., Peggy Ann Smelser, Louis

E. Remily, David L. Siegel, Thomas G. Van de Grift, Mil-

ton J. Stearns, Fran Richards, Kathleen Rubin, Nancy

Kaeynski and Janet Zanck.

Respondent, Cameo Convalescent Center, Inc., and in

addition, plaintiffs, Dragomir Kresovie, Borislav Kreso-

vic and Linda Hintz.

ill

TABLE OF CONTENTS

Page

Ce i

Parties to the Proceed imgss Below oe... eeececcecseeeeeeneeeeeeeeeeee ee il

Authorities Cited ...WW........ icine iarabhoiasatieiapatiee iv

A

AEE on 7

RT EES CSI SERS Oe 8

I. THE CIRCUIT COURT’S DECISION IS

NOT IN CONFLICT WITH HUDSON VF.

Il. THE CIRCUIT COURT’S DECISION WAS

NOT INCONSISTENT WITH EITHER

THIS COURT’S RULING OR RULINGS OF

OTHER CIRCUIT COURTS ON THE IS-

SUE OF LIABILITY BASED ON CON-

io i +) th a FE REV aoc Re 12

A. The Cireuit Court’s Ruling Does Not

Conflict With Prior Decisions Of This

ES ELE Teen eee veer Pie RETO 13

B. The Holding Of The Cireuit Court Does

Not Conflict With That Of Other Circuits

I os osiccmelipeclbin 14

Ill. THE CIRCUIT COURT’S DECISION DID

NOT CONFLICT WITH THIS COURT’S

PRIOR DECISIONS ON THE QUESTION

OF WHETHER CAMEO WAS ENTITLED

TO A PREDEPRIVATION HEARING ......... 17

A. The Arguments Advanced By The Peti-

tioners Were Not Previously Raised ......... 18

B. The Circuit Court’s Decision Does Not

Conflict With This Court’s Prior Hold-

ings On Corporate Liberty Interests ..... 19

iv

TABLE OF CONTENTS—Continued

Pages

C. The Petitioners’ Actions Do Not Fall

Within The Emergency Exception To

The Predeprivation Hearing Require-

ment 24

Conclusion 26

Appendix © SE te NORA siesta Al

AUTHORITIES CITED

CasEs:

Adickes v. S.H. Kress & Company, 398 U.S. 144 (1970) 138

Barry v. Barchi, 443 U.S. 55 (1979) . 26

Birnbaum vy. Trussell, 371 F.2d 672 (2nd Cir. 1966) ..15, 16

Boddie v. Connecticut, 401 U.S. 371 (1971) 25

Brown County v. Department of Health and Social

Services, 103 Wis. 2d 37, 807 N.W.2d 247 (1981) .....23, 24

County of Dane v. Department of Health & Social

Services, 79 Wis. 2d 323, 255 N.W.2d 539 (1977) .......... 23

Dennis v. Sparks, 449 U.S. 24 (1980) 13

Ellis v. Dixon, 349 U.S. 458, rehearing denied, 350 U.S.

855 (1955) ean 18

Fact Concerts, Inc. v. City of Newport, 626 F.2d 1060,

1063 (1st Cir. 1980) ‘ 19

Fahey v. Mallonee, 332 U.S. 245 (1947) 8, 24

First National Bank of Boston v. Bellotti, 485 U.S.

765 (1978) . Puce Pae wm NN ae |

Gallick v. Baltimore & Ohio Railway Company. 372

U.S. 108 (1963) 17

Hodel v. Virginia Surface Mining and Reclamation

Association, 452 U.S. 264 (1981) . 8, 24

Vv

AUTHORITIES CITED—Continued

Pages

Hostrop v. Board of Junior College District No. 515,

523 F.2d 569, cert. denied, 425 U.S. 693 (7th Cir.

ime) 14

Hudson v. Palmer, 468 U.S. —, 82 L.Ed. 2d 393

(1984) 10, 11, 12

Logan v. Zimmerman Brush Company, 455 U.S. 422

(1982) ..... 1, 11, 25, 26

Marrero v. City of Hialeah, 625 F.2d 499 (Sth Cir.

1980)... ‘ 20

Mathews v. Eldridge, 424 U.S. 319. (1976) 8, 26

Monell v. Department of Social Services, 436 U.S. 658

(1978) aes i eed . B

Newport v. Fact Concerts, Inc., 453 U.S. 247 (1981) ..... 19

Northwestern National Life Insurance Company v.

Riggs, 203 U.S. 248, 255 (1906) ............... 19, 20, 21, 22, 23, 24

Parratt v. Taylor, 451 U.S. 527 (1981) 0... 7, 10, 11, 12

Phillips v. Trello, 502 F.2d 1000 (8rd Cir. 1974) 2000... 15

Rizzo v. Goode, 423 U.S. 362 (1976) 13

Stoehr v. Wallace, 255 U.S. 239, 246-247 (1921) —WWW.... 26

Western Turf Association v. Greenberg, 204 U.S. 359,

363 (1907) —..... 19, 21, 22, 24

STATUTES:

42 U.S.C. § 1983 13, 14, 15, 16, 17

Wis. Stat. $50.04 ey

OrHEK AUTHORITIES :

Supreme Court Rule 17 7, 8, 9,12, 18

Supreme Court Rule 28.1 1

United States Constitution, First Amendment ........6, 20

Vl

AUTHORITIES CITED—Continued

Pages

United States Constitution, Fourteenth Amendment

..0, 8, 9, 20, 22

_——

United States Constitution, Ninth Amendment ................. 6

No. 84-505

">

Vv

In The

Supreme Court of the United States

October Term, 1984

— —0o

DONALD KE. PERCY, et al.,

Petitioners,

V.

CAMEO CONVALESCENT CENTER, et al.,

Respondents.

a -O—

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

ray

Vv

PRIEF OF RESPONDENTS IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

WITH .PPENDIX

STATEMENT OF THE CASE

Cameo Convalescent Center, Inc. (Cameo) is a family

held corporation in Milwaukee, Wisconsin, whose primary

business is operating a licensed nursing home.' Nursing

: Pursuant to Rule 28.1, Cameo asserts that it has no parent

company, subsidiaries or affiliates.

1

2

homes are subject to extensive federal and state regulation

and, in Wisconsin, the Wisconsin Department of Health

and Social Services (WDHSS) monitors the compliance

of nursing homes with these federal and state regulations.

This action arose by virtue of certain enforcement actions

taken by the WDHSS in 1978 and 1979.

On September 19, 1978, Darla Senn, a nurse-surveyor

and employee of the WDHSS, together with another state

surveyor, Nancy Kacynski, served thirty-four notices of

violation (NOV’s) upon Cameo, (Exs. 22 and 23) On Octo-

ber 17, 1978, the WDHSS imposed a plan af correction

upon Cameo requiring that all these deficiencies be cor-

rected within one day. (x. 47) Despite a timely appeal

of both the NOV’s and tue imposed plans of correction,

Cameo never received a hearing within the thirty-day

period required under Wisconsin law (Exs. 36 and 54A)

In fact, no hearing had been held prior to the time that

Cameo was placed on the suspension of referrals list, as

will later be discussed. (Resp. App. 12A)

On October 26, 1978, Kacynski conducted a verifica-

tion visit to determine if Cameo had complied with the

plans of correction for the three social services notices of

violations. Kacynski found that all three of the alleged

violations in the social services area had been corrected.

(Ex. 54) ~~

On January 2, 1979, another verification visit was con-

ducted. Of the thirty-one violations alleged by Senn,

twenty-four were found to have been corrected, acceptable

progress was found to have heen made with respect to

four, and only three remained uncorrected. (L. 7-9)

From thesoutset Cameo had strongly opposed the is-

suance of the NOV’s, contending that they were withont

merit. (Exs. 36, 54A, 68, 96, 108 and 115) Cameo suggested

that the NOV’s had been issued in retaliation for com-

ments Cameo had made to Wisconsin government repre-

sentatives concerning what Cameo alleged to be the poor

quality and biased nature of the annual nursing home sur-

veys which the WDHSS conducted. (Ex. 108) At trial,

Cameo proffered evidence that Senn, shortly after issuing

the NOV’s, told another surveyor ‘‘You know, I intend to

screw them [Cameo].’’ (Ex. 327)

Other evidence which Cameo produced at trial showed

that the other WDHSS defendants became increasingly

aware that many of the NOV’s issued by Senn were merit-

less, but the WDHSS continued to pursue them nonethe-

less. (Resp. App. 7A-9A) In a series of memos, one of the

attorneys for WDHSS detailed the legal and factual de-

ficiencies of these NOV’s. (Resp. App. 1A-7A)

On March 21, 1979, Cameo was notified that it was

being placed on the WDHSS’ Suspension of Referrals

list. (Resp. App. i0A-12A) The legal effect of placements

of a home upon the SOR list is to preclude state and coun-

ty social service agencies and departments froin referring

nursing home patients to that home. The SOR list is, in

effect, a legally enforceable blacklist.

The Suspension of Referrals list (SOR list) was com-

piled by the WDHSS monthly and consisted of nursing

homes with at least five outstanding uncorrected viola-

tions of the type served on Car As of the time of the

verification visit, Cameo was all-ged to have had only

three outstanding uncorrected NOV’s. (Resp. App. 2A-3A)

Cameo’s notice alleged that seven outstanding and un-

corrected NOV’s supported Cameo’s placement on the list.

+

Fuily five of the seven NOV’s which were ostensibly re-

sponsible for Cameo’s placement on the SOR list were

identified as without reasonable merit by Siegel in his

May 9, 1979 memo.’ This information had been orally re-

layed to various other defendants responsible for com-

piling that list as early as late 1978 or early 1979. (Resp.

App. 7A-9A)

Subsequently Cameo was also notified that it was

being placed on the Suspension of Admissions list. (Ex.

160) The legal effect of being placed on the Suspension

of Admissions list is to preclude the home from admitting -

any new patients whatsoever. That notification of place-

ment on the Suspension of Admissions list was based

upon a change in three findings from “corrected” to ‘‘un-

corrected” by the original verification visit surveyor, Jane

Preston, more than four months after the verification

visit had taken place. (Ex. 135) Ms. Preston indicated

that she was writing the memo to change her findings,

‘‘as instructed by D. Siegel.”

All three of the NOV’s, regarding which Jane Pres-

ton was instructed to change her findings, and which then

formed the basis for Cameo being notified of its place-

ment on the Suspension of Admissions list, were also iden-

tified by Siegel as without merit in that same memo.’ In

short, none of the defendants took action to dismiss the

NOV’s which were responsible for the sanctions imposed

2 Resp. App. 4A-7A. The five NOV’s were nos. 111810,

111811, 111802, 111807 and 111809.

5 Ex. 131, Resp. App. 4A-7A. These three NOV’s were nos.

111805, 111806 and 111829. Of 111805 and 111806, Siegel

says, “This citation is 100% unsupportable because of wholly

inadequate investigation and flaky conclusions of iaw.” Of

111829, he says, “So what?”

5

upon Cameo, even though it was known at an early date

that they were without merit.

Wisconsin law provided that no nursing home could

be placed on the SOR list unless it has been afforded the

opportunity for a hearing prior to its placement on the

list. Despite a timely appeal by Cameo of its placement

on the list, no hearing was ever held. Cameo’s name ap-

peared upon the April SOR list which was forwarded to

over 600 social service departments and agencies. No copy

of that SOR list, however, was ever sent to Cameo by

WODHSS. (Exs. 308-310)

Subsequent to the publication of Cameo’s name on

the SOR list, one of the defendants sent an unsigned

“memorandum” to at least one of the recipients of the

SOR list indicating that Cameo had been placed on the

SOR list ‘‘in error.’’ (Pet. App. p. 104) Cameo intro-

duced evidence tending to show that it was unlikely that at

least certain of the defendants would have been unaware

at the time the list was published that Cameo had ap-

pealed. (Resp. App. 16A-17A)

The statute, as well as the language of the list itself,

however, provided that, once a facility was placed on the

list, no referrals could be made to that facility until a sub-

sequent list had been published and that facility had been

listed in the “removal of restrictions” section. (Resp. App.

‘ Petitioner contends that Cameo “was given the benefit

of the doubt as to timeliness.” (Petition for Writ at p. 16) In

ste there was never any doubt as to timeliness. Cameo had

ten days after receipt of the notification of placement to file

its appeal. It received the notice on March 21, 1979. (Resp.

App. 10A-12A) On March 30, the ninth day after receipt, Cameo

had hand-carried its appeal to the Depariment, filed it with

the proper person, and had that person sign to acknowledge

be Phy the document. (Pet. App. 71-73 and Resp. App.

= Be Fr. & FWP OS QS SS

. .

6

18A-20A) When the May SOR list was published, how-

ever, Cameo’s name was not included in the “removal of

restrictions” section. (Resp. App. 21A-22A) In fact, no

official notification was ever given to the recipients of the

list that Cameo had had its SOR restrictions removed.°

Ultimately, the NOV’s issued by Senn were the subject

of a stipulated settlement between Cameo and the WDHSS.

(Ex. 256) Prior to that stipulation, however, Cameo had

been required to defend itself in 18 days of administrative

hearings. (R. 219, Tr. Vol. 1, p. 75) That stipulation pro-

vided for a dismissal of almost all of the NOV’s and re-

strictions on the egal effect which could be given the re-

mainder.

In 1979, other defendant surveyors issued additional

NOV’s against Cameo and WDHSS again imposed plans

of correction. After Cameo appealed, and additional hear-

ings were held, these NOV’s were disposed of by stipula-

tion in essentially the same fashion as those issued in 1978.

(Ex. 275)

The Respondent and other plaintiffs filed this action

alleging that, as a result of defendants’ actions, they suf-

fered substantial and direct economic losses, loss of busi-

ness reputation and deprivations of their constitutional

—rights under the First, Ninth and Fourteenth Amendments

of the Constitution. A bifurcated jury trial was held. At

the conclusion of the liability phase of the trial, the jury

found that Senn had acted with malice in preparing and

prosecuting the NOV’s against Cameo, and that the NOV’s

were prepared and prosecuted against Cameo for ulterior

or improper motives. No other defendant was found liable.

s The only recipient of the April SOR list whom the defend-

ant established at trial had received even the unsigned mem-

orandum of “‘retraction’’ was the Milwaukee County Depart-

ment of Social Services.

a ae SN i ‘~~’ Eo Ve _% _ “4 » ™ a 2 % a

7

The jury awarded Cameo compensatory damages of $65,000

and punitive damages of $10,000. Both Cameo and Senn

appealed the trial court’s subsequent judgment confirm-

ing the jury verdicts.

In its appeal, Cameo contended that the district court

had made three errors which are relevant to the questions

presented in this petition. First, Cameo contended that

the trial court erred in refusing to provide the jury with

Cameo’s proffered instructions on conspiracy. The cir-

cuit court agreed. Secondly, Cameo contended that the

district court erred in refusing to instruct the jury, as

Cameo had requested, that Cameo was entitled to a due

process hearing prior to its being placed on the SOR list.

The cireuit court agreed with this contention as well. Fi-

nally, Cameo argued that it was entitled to its proffered

jury instruction that its rights would have been violated

by reckless, as well as by intentional, conduct of the de-

fendants. The circuit court also agreed with this conten-

tion. That court then remanded the case to the district

court for a new trial with proper jury instructions on the

plaintiff’s theory of its case.

SUMMARY OF ARGUMENT

Certiorari should not be granted in this case because

the reasons stated in the petition do not meet the standards

set forth in Supreme Court Rule 17.

This Court’s prior decision in Logan v. Zimmerman

Brush Company, 455 U.S. 422 (1982) clearly held that the

Parratt v. Taylor, 451 U.S. 527 (1981) exeeption to the

predeprivation hearing is not applicable where, as here,

the deprivation occurs during the course of a state pro-

cedure, rather than as a result of a random unauthorized

tort by a state employee. Thus, the circuit court’s decision

was not in conflict with the decisions of this Court.

8

There is also no inconsistency among the circuit courts

on how liability may be assessed on the basis of conspiracy.

All circuits have held that conspiracy serves as a basis for

assigning liability for a deprivation, it does not constitute

a deprivation in and of itself. The circuit court so held in

this ease, and this Court need not exercise its discretion

to grant the writ in order to resolve a conflict among the

circuits.

It would also be inappropriate for this Court to grant

the writ in order to address the petitioners’ arguments that

a corporation does not have a protected liberty interest

under the Fourteenth Amendment, or that a predepriva-

tion hearing was not constitutionally required, since neither

of those arguments were raised prior to the filing of the

petition.

Even if the Court were to look beyond the petition-

ers’ prior waiver of these arguments, the petition shows no

reason why these issues are significant federal questions

requi.ing resolution by this Court. This Court has pre-

viously addressed the corporate liberty interest argument

in First National Bank of Boston v. Bellotti, 435 U.S. 765

(1978) and resolved it in a manner consistent with the eir-

cuit court here. Similarly, the Hodel v. Virginia Surface

Mining and Reclamation Association, 452 U.S. 264 (1981),

Fahey v. Mallonee, 332 U.S. 245 (1947) and Mathews v.

Eldridge, 424 U.S. 319 (1976) decisions, upon which the

petitioner relies, are clearly distinguishable from the pres-

ent case.

ARGUMENT

The factors which this Court will consider in deter-

mining whether to grant a petition for certiorari are con-

tained in Rule 17. That section provides, in relevant part,

that the Court will consider a petition for certiorari in the

following circumstances:

9

“RULE 17. Considerations governing review on cer-

tiorari

. 7 7 _

(a) When a federal court of appeals has ren-

dered a decision in conflict with the decision of an-

other federal court of appeals on the same matter;

or has decided a federal question in a way in conflict

with a state court of last resort; or has so far de-

parted from the accepted and usual course of judicial

proceedings, or so far sanctioned such a departure by

a lower court, as to call for an exercise of this Court’s

power of supervision.

(c) When a state court or a federal court of

appeals has decided an important question of federal

law which has not been, but should be, settled by this

Court, or has decided a federal question in a way in

conflict with applicable decisions of this Court.”

The petiticner proposes three issues for review by

this Court. First, the petitioner argues that Cameo’s denial

of the right to receive referrals from state and county

agencies without an opportunity to be heard, was not an un-

constitutional deprivation since there were adequate state

remedies available. Second, the petitioners argue that the

trial court’s failure to give a conspiracy instruction was

only “harmless error.” Finally, petitioners argue that the

Fourteenth Amendment did not entitle Cameo to an ad-

versary hearing prior to the denial of its right to receive

referrals.

Petitioners do not argue that the circuit court’s de-

cision on these points conflicted with any decision of any

other court of appeals or state court of last resort on a

general principle of federal law. Nor does the petition

argue that there are important questions of federal law

presented which have not heretofore been decided.

10

While acknowledging that the failure to instruct on

conspiracy was error, the petitioners argue that the spe-

cific facts of this case, as viewed by the petitioners, render

that error “harmless.” This is hardly the type of issue

towards which this Court should direct its limited re-

sources.

Thus, the sole questions presented for possible review

by the petitioners is whether the cireuit court’s decision

represents such departure from the accepted and usual

eourse of judicial proceedings so as to call for an exer-

cise of this Court’s power of supervision or whether the

petition is from a decision, on a federal question, which

is in conflict with the applicable decisions of this Court.

We contend that the proceedings before the cireuit court

on the questions presented in the petition neither repre-

sent a departure from accepted practice nor are in conflict

with any decision of this Court. It follows that the grant-

ing of a petition for certiorari to review these questions

would be inappropriate.

I. THE CIRCUIT COURT’S DECISION IS NOT IN

CONFLICT WITH HUDSON V. PALMER.

Petitioner argues that the cireuit court’s opinion di-

rectly conflicts with this Court’s ruling in Hudson v.

Palmer, 468 U.S. —, 82 L.Ed. 2d 393 (1984), a decision ren-

dered subsequent to the opinion of the court of appeals

in this case.

In Hudson, this Court extended Parratt v. Taylor, 451

U.S. 527 (1981) to eases involving intentional, as well as

negligent, deprivations of protected interests. Thus, in

certain circumstances, a postdeprivation remedy may not

violate the due process clause, even if the deprivation is

the result of intentional misconduct. However, this Court

spectically acknowledged in Hudson that a postdepriva-

¢

11

tion state remedy does not satisfy due process where the

deprivation is effected pursuant to an established state

procedure, as opposed to a random, unauthorized tort not

related to an established state procedure. 82 L.Id. 2d at p.

407.

In distinguishing between the two types of depriva-

tions, the Court relied heavily upon its prior decision in

Logan v. Zimmerman Brush Company, 455 U.S. 422

(1982). In Logan, this Court declined to extend the Par-

ratt v. Taylar rationale to a situation where the interest

involved was deprived pursuant to a state procedure. In

so finding, this Court specifically held that:

“This argument misses Parratt’s point. In Parratt,

the Court emphasized that it was dealing with ‘a tor-

tious loss of . . . property as a result of a random

and unauthorized act by a state employee ... nota

result of some established state procedure.’ 451 U.S.,

at 541, 68 L.Ed. 2d 420, 101 S. Ct. 1908. Here, in con-

trast, it is the state system itself that destroys a com-

plainant’s property interest, by operation of law. Par-

ratt was not designed to reach such a situation.” 455

U.S. at pp. 485-436.

The petitioner pointedly omits any reference to the

Logan decision, even though that decision, and the reason-

ing of that decision, were specifically referred to and in-

corporated in Hudson on more than one occasion. The

language of Hudson itself, for example, specifically notes

that “postdeprivation remedies do not satisfy due process

where a deprivation of property is caused by conduct pur-

suant to established state procedure, rather than random

and unauthorized action.” 82 L.Ed. 2d at p. 407.

In the instant case, Cameo was not deprived of its

protected interests through an unauthorized and random

action by a miscreant state employee. Rather, Cameo’s

name was placed on the SOR list, a blacklist of nursing

12

homes, as part of an officially sanctioned enforcement pro-

eedure. This whole enforcement scheme was established

by state statute. See, Wis. Stat. $50.04. Thus, the nar-

row exception created in Parratt and Hudson are simply

inapplicable to this case. It follows that the cireuit court’s

decision, not being in conflict with those cases, is not in

need of review.

Even assuming arguendo that a good faith Hudson v.

Palmer, or Parratt argument could be advanced, and we

do not think that one could be, the factual question of

whether the acts at issue in this proceeding were “random

and unauthorized” has never been decided. Indeed, the

petitioner never requested that such questions be sub-

mitted to the jury. Thus, this type of question seems more

appropriately addressed to the jury on remand, than to

this Court.

It logically follows that, since the circuit court’s opin-

ion was not in conflict with this Court’s holdings, Rule 17

does not support the granting of certiorari on this basis.

II. THE CIRCUIT COURT’S DECISION WAS NOT

INCONSISTENT WITH EITHER THIS COURT’S

RULINGS OR RULINGS OF OTHER CIRCUIT

COURTS ON THE ISSUE OF LIABILITY BASED

ON CONSPIRACY.

The petition for certiorari appears to contend that

this Court should grant certiorari because the circuit

court’s ruling, that the failure to give the conspiracy in-

struction was reversible error, conflicts with other deci-

sions of both this Court and other circuit courts of ap-

peal. For the reasons which follow, neither this Court’s

prior opinions nor opinions of other circuit courts are in

conflict with the circuit court’s holding in this case.

13

A. The Circuit Court’s Ruling Does Not Conflict

With Prior Decisions Of This Court.

The petitioner apparently argues that, because liabil-

ity under 42 U.S.C. § 1983 is direet and personal, as op-

posed to vicarious, that no defendant could be found liable

for the violation of Cameo’s rights under a conspiracy

theory, citing Monell v Department of Social Services, 436

U.S. 658 (1978) and Rizzo v. Goode, 423 U.S. 362 (1976).

Those eases, however, relate solely to whether a munici-

pality, or a supervisor, can be liable for the acts of an

employee or subordinate where the municipality or the

supervisor have had no involvement in, nor knowledge and

approval of, the conduct of those employees or subordi-

nates. Where the complaint alleges, or the facts show,

that such a conspiracy existed, this Court has not hesi-

tated to find such liability. See, for example, Adickes v.

S.H. Kress € Company, 398 U.S. 144 (1970) and Dennis

v. Sparks, 449 U.S. 24 (1980).

In Dennis, the plaintiff sought relief from a private

individual who had allegedly conspired with a judge,

through bribery and other corrupt means, to obtain an in-

junction which deprived the plaintiff of a property inter-

est. While the Court found the judge to be absolutely im-

mune from suit, it also found that an action could be main-

tained against the co-conspirators even though they had

not themselves issued the injunction which caused the in-

jury. Thus, the prior rulings of this Court are consistent

with the cireuit court’s holding that liability will lie un-

der a conspiracy theory, even when the individual defend-

ant did not personally take the action which caused the

legal harm to the plaintiff.

Thus, the circuit court’s holding that the petitioners

ean be held liable for a deprivation of Cameo’s protected

CC

14

interest under a theory of conspiracy does not conflict

with any prior holdings of this Court.

B. The Holding Of The Circuit Court Does Not Con-

flict With That Of Other Circuits On The Same

Issue.

The petition contends that there is a division among

the circuits on the question of whether a conspiracy, in

and of itsell, is sufficient to state a claim under 42 U.S.C.

§ 1983. It also contends that the cireuit court below held

conspiracy to constitute a separate actionable claim. Not

only did the cireuit court in this case not make such a find-

ing, but there is no dispute on this issue among the cir-

cuits.

It is well settled that to give rise to a cause of action,

a conspiracy must result in an overt illegal act. However,

individual liability of the participants in that conspiracy

arises from their participation or acquiesce in the common

illegal scheme. Each individual participant in an unlawful

conspiracy need not engage in the overt acts causing the

injury in order to be liable. The circuit court below made

explicit in Hostrop v. Board of Junior College District

No. 515, 523 F.2d 569, cert. denied 425 U.S. 693 (7th Cir.

1975), that conspiracy extends liability to persons other

than the actual wrongdoer.

‘‘The doctrine of civil conspiracy extends liability for

a tort, here the deprivation of constitutional rights,

to persons other than the actual wrongdoer... . ‘The

charge of conspiracy in a civil action is merely the

string whereby the plaintiff seeks to tie together

those who, acting in concert, may be held responsible

for any overt act or acts.’

‘[A] conspiracy may be used as the legal mechanism

through which to impose liability on each and all the

defendants without regard to the person doing the

particular act.’’’ 523 F.2d at p. 576. (Emphasis

added)

15

But that circuit court has never held, and it did not

hold in this case, that a conspiracy, without any other de-

privation, is actionable under § 1983.

The petition cites two circuit court cases which, it con-

tends, adhere to the view that conspiracy is actionable in

and of itself. Phillips v. Trello, 502 F.2d 1000 (3rd Cir.

1974) and Birnbaum v. Trussell, 371 F.2d 672 (2nd Cir.

1966). In reality, neither of those two decisions have rec-

ognized such an independent actionable claim for con-

spiracy.

In Phillips, the circuit court reversed an order of the

district court which dismissed the complaint of the plain-

tiffs for failure to state a cause of action under 42 U.S.C.

§ 1983. That complaint alleged, among other things, that

the plaintiff had been ‘‘struck with a blackjack,” was

‘*taken to the police station, booked, placed in cells and

held’? and subjected to unreasonable searches of their res-

idences. Phillips v. Trello, supra, at n. 2. The cireuit

court reversed the dismissal of the complaint, but in doing

so, specifically based its decision on the fact that the com-

plaint alleged a specific deprivation in addition to the

allegation of conspiracy, stating that:

‘*An action based upon § 1983 involves two distinct

elements. First, the plaintiff must assert a depriva-

tion of rights, privileges and immunities secured by

_the Constitution and laws.’? 502 F.2d at p. 1004.

(Emphasis added)

At no point did that court state or infer that a con-

spiracy, without more, was actionable.

Similarly, in the Birnbaum case, the Second Circuit

Court of Appeals reviewed a decision of the district court

which dismissed a complaint which alleged that the de-

fendant had conspired to have the plaintiff discharged

from his position as an attending physician at a municipal

Se a eS ee ae ee

16

hospital. The court, in reversing that decision spe-

cifically held that ‘‘liability under the section must be

based upon the ‘deprivation of any rights, privileges or

immunities secured by the Constitution and laws... .’ ”

371 F.2d at p. 676. It did not hold that a conspiracy, in

and of itself, without any deprivation, would constitute an

actionable claim under 42 U.S.C. § 1983.

Thus, the first prong of the petitioners’ argument,

that there is a conflict between the circuits on the appli-

cable law as it relates to the liability creat’ 1 by conspir-

acy, is simply unfounded.

Moreover, the second prong of the petitioners’ argu-

ment is equally ill-founded. For, the circuit court’s opin-

ion specifically recognizes that the plaintiffs, in order to

prevail, will need to establish that the conspiracy actually

resulted in the deprivation of a constitutionally protected

interest, stating that:

‘“‘The main thrust of plaintiffs’ case was that the

defendants had acted in concert to deprive the plain-

tiffs of constitutionally protected rights.” (Pet. App

at p. 18) (Emphasis added)

In a subsequent portion of its opinion, the circuit

court again emphasized that it was not basing its decision

solely on the evidence of the existence of a conspiracy.

Rather, in explaining its finding that the trial court’s in-

struction on the due process rights of the plaintiff were

erroneous, the court stated:

*‘Cameo properly asserts a cognizable due process

claim because Cameo’s placement upon the SOR [Sus-

pension of Referrals] list without the requisite hear-

ing not only damaged Cameo’s reputation but also

altered Cameo’s legal status. Cameo’s placement

upon the SOR list, like the individual placed on the

list of known drunks in Davis, deprived Cameo of a

right under state law: the right to receive referrals

17

from state social service departments and agencies.”

Pet. App. at pp. 31-32) (Emphasis added)

What the petitioners appear to contend is that since

the jury could not identify the defendant(s) who was

‘*personally and directly responsible for the placement of

Cameo on the suspension of referrals list and acted with

intentional or reckless disregard of Cameo’s right to ap-

peal [as opposed to Cameo’s right to a hearing prior to]

such placement,’’ that therefore Cameo must not have been

deprived of a protected interest. However, it is undis-

puted that Cameo was placed on the SOR list without a

hearmg. The jury did not find, because it was not asked

to find, that there was no conspiracy which, as a result of

the combined actions of the defendants, resulted in

Cameo’s wrongtul placement on the suspension oi refer-

rals list. This Court has previousiy cautioned against

courts of appeal imposing their own views on the meaning

of ambiguous jury responses to special verdict questions

so as to extinguish causes of action. Gallick v. Baltimore

& Ohio Railway Company, 372 U.S. 108, 119-120 (1963).

Thus, since the cireuit court did not hold that conspir-

acy alone is suificient to establish lability under § 1983,

there is simply no basis for this Court to exercise its dis-

cretion by certiorari on this basis.

III. THE CIRCUIT COURT’S DECISION DID NOT

CONFLICT WITH THIS COURT'S PRIOR DECI-

SIONS ON THE QUESTION OF WHETHER CAM-

EO WAS ENTITLED TO A PREDEPRIVATION

HEARING.

The petition for certiorari argues that the decision of

the circuit court is in conflict with prior decisions of this

Court on the question of whether or not Cameo was en-

titled to a predeprivation hearing before it was placed on

the suspension of referrals list. The petition advances

two independent arguments in support of this position.

18

First, the petition argues that a corporation does not

have a recognizable liberty interest so as to trigger the

constitutional right of due process. Secondly, the petition

argues that the State’s inter: * in the publication of the

suspension of referrals list outweighed Cameo’s interest in

not being placed erroneously on the SOR list, and thus a

predeprivation hearing was not required.

A. The Arguments Advanced By The Petitioners

Were Not Previously Raised.

Both of the petitioners’ above arguments do have one

thing in common. Neither of them was raised by the peti-

tioner prior to the filing of the petition for certiorari in

this Court. In fact, in arguing that there was no rever-

sible error in the district court’s refusal to instruct the

jury that Cameo was entitled to a predeprivation hearing,

petitioner affirmatively contended before the court of ap-

peals that such an instruction was unnecessary because it

was undisputed that Cameo had not recewed the hearing

to which it was entitled. (Pet. App. pp. 33-34)

Under this Court’s prior holding in Ellis v. Dixon, 349

U.S. 458, rehearing denied 350 U.S. 855 (1955), issues not

previously raised are not properly reviewa’ ie by cer-

tiorari. This holding is clearly consistent with the lan-

guage of Rule 17. For, if the issue was never presented

below, there cannot be a circuit court’s decision on that

issue which would be in conflict with other applicable

court rulings.

The petitioners’ belated advancement of its ‘‘liberty

interest” argument is a particularly egregious violation of

the Ellis rule. For, not only have petitioners not pre-

viously raised that issue, but their own proposed jury in-

structions on the due process question would have allowed

the jury to find liability on the basis of the infringement

19

of Cameo’s liberty interest. (Resp. App. 22A-25A) Sim-

ilarly, the petitioners never requested any jury instruc-.

tion, nor introduced any evidence, which would have al-

lowed the jury to infer that the State’s interest in publi-

cation of the SOR list was of such magnitude so as to trig-

ger an exception to the normal predeprivation hearing re-

quirement. Therefore, we believe that it would be inap-

propriate for the Court to consider these issues for the

first time by petition for certiorari.

B. The Circuit Court’s Decision Does Not Conflict

With This Court’s Prior Holdings On Corporate

Liberty Interests.

The petition argues that the Seventh Circuit Court of

Appeals should have dismissed the complaint, on its own

motion, because a corporation does not have a liberty in-

terest protectable by the due process clause, citing two

substantive due process cases, Western Turf Association

v. Greenberg, 204 U.S. 359, 363 (1907) and Northwestern

National Life Insurance Company v. Riggs, 203 U.S. 243,

255 (1906). The petition fails to cite, however, this

Court’s much more recent opinion in First National Bank

of Boston v. Bellotti, 435 U.S. 765 (1978). See also, New

port v. Fact Concerts, Inc., 453 U.S. 247 (1981) in which

this Court set aside a punitive damage award against a

municipality, but left otherwise standing the judgment in

favor of a corporation on the basis that its similar liberty

interests had been deprived. Fact Concerts, Inc. v. City

of Newport, 626 F.2d 1060, 1063 (1st Cir. 1980).

Even assuming that petitioners’ liberty interest ques-

tion was properly presented, the circuit court’s decision

is not in conflict with applicable rulings of this Court. In

order to have a viable argument, petitioners would need

to establish two points, that the interest asserted by Cameo

is strictly a liberty interest and that the Western Turf and

20

Northwestern National Life cases govern the facts of this

case. Petitioners cite no holdings of this Court which lim-

it Cameo’s interest involved solely to the concept of a

‘‘liberty interest.” See, for example, Marrero v. City of

Hialeah, 625 F.2d 499 (5th Cir. 1980), holding that busi-

ness goodwill is a property interest recognizable under

the due process clause. Thus, the petition fails to meet

even the first prong of the test. The district court in this

case specifically found that Cameo’s interest in receiving

patients was a property, not a liberty, interest under Wis-

consin law. (Cross-Pet. App. 2A)

In the Bellotti case, this Court held that a corporation

had a recognizable liberty interest, under the First and

Fourteenth Amendments to the U.S. Constitution, to con-

tribute corporate funds to political campaigns. The Su-

preme Judicial Court of Massachusetts had upheld a stat-

ute barring such contributions in certain circumstances

on the grounds that corporations have more limited liberty

interests under the Fourteenth Amendment than do nat-

ural persons. In reversing that decision, this Court made

it clear that it was doing so on the basis of its view of

an expanded corporate liberty interest under the Four-

teenth Amendment, stating that:

“Freedom of speech and the other freedoms encom-

passed by the First Amendment always have been

viewed as fundamental components of the liberty safe-

guarded by the Due Process Clause, ... [a]nd the

Court has not identified a separate source for the

right when it has been asserted by corporations.” 435

U.S. at p. 780. (Emphasis added)

In a subsequent footnote, the Court clearly notes that:

“Tt has been settled for almost a century that corpora-

tions are persons within the meaning of the Four-

teenth Amendment. Santa Clara County v. Southern

Pacific R. Co., 118 U.S. 394, 30 L.Ed. 118, 6 S. Ct.

21

1132 (1886); see Covington & Lexington Turnpike R.

Co. v. Sandford, 164 U.S. 578, 41 L.Ed. 560, 17 S. Ct

198 (1896).” 435 U.S. at p. 720 n. 15.

Thus, even assuming arguendo the applicability of the

Northwestern National Life and Western Turf Associa-

tion decisions to a procedural due process claim, the force

of those decisions has been seriously eroded by this Court’s

more recent opinion in First National Bank of Boston v.

Bellotti, 435 U.S. 765 (1978).

Justice Rehnquist, in his dissent in Bellotti, clearly

recognized the effect of that decision on the Northwestern

National Life line of cases. 435 U.S. at p. 822. However,

even under the test proposed by Justice Rehnquist, Cam-

eo’s interest in not having referrals suspended is a pro-

tected interest under the duc process clause.

That proposed test in a functional analysis in which

the Court determines which liberty interests are “inei-

dental to the corporations existence,” and then affords

protection to only those interests. 435 U.S. at pp. 823-824.

Here, of course, the right to receive referrals of nursing

home patients can hardly be said not to be an interest in-

cidental to a corporation which is chartered and licensed

to operate as a nursing home. Thus, Cameo would have

a protected liberty interest in remaining off of the SOR

list even under the [functional-analysis test.

Thus, under the existing state of the law as enumer-

ated by this Court in Bellotti, corporations do retain lib-

erty interests protected by the due process clause and

Cameo’s asserted interest was protected by the due process

clause.

Even assuming arguendo, however, the continued and

undiminished vitality of Northwestern National Life and

22

Western Turf Association, those early decisions do not

justify a review of the decision rendered by the Seventh

Circuit Court of Appeals in this case. First of all, those

decisions were both based upon substantive due process

claims which challenged the general regulation of certain

business practices by state legislatures. This case, on the

other hand, alleges a procedural due process claim chal-

lenging individualized action by state officials against a

specific business corporation. Because of the original rea-

soning upon which the Supreme Court decided Northwes-

tern National Life, the seminal case, this distinction is

clearly a determinative one.

In Northwestern National Life, an insurance com-

pany challenged a Missouri statute of general applicabil-

ity which precluded insurance companies from raising a

specific affirmative defense in defense of a life insurance

policy claim. The company alleged, in part, that its right

to raise this defense was a liberty interest protected by

the Fourteenth Amendment. Justice Harlan, in writing

for the majority, analyzed the relationship of the cor-

poration to the state legislature which had adopted the

statute. He reasoned that, since the state had created the

corporation, and could abolish it altogether, “the state

could make such a regulation in relation to its own cor-

porations; for a corporation cannot exert any power, nor

make any contract, forbidden by the law of its being.”

203 U.S. at p. 254.

In short, the Court based its finding on its perception

that, since the corporation only existed by virtue of state

law, it could not challenge the will of the state legislature,

which was solely responsible for its very existence. The

Western Turf Association v. Greenber ; case, also authored

23

by Justice Harlan, merely adopted, without comment, the

holding in Northwestern National Life.

The present case, on the other hanc, is clexrly dis-

tinguishable from-these two cases. “Wi: asi. law, the

applicable body of law to determine the corpo:cte ex’ i-

ence and status here, recognizes a clear distinction be-

tween the ability of a “creature of the legislature” to

challenge legislative action, and its ability to challenge

actions by state officials which are in excess of their stat-

utory authority. Thus, entities created by the legislature

are precluded from challenging the constitutionality of a

state statute, but they may challenge agency action in ex-

cess of the agency’s authority. See, for example, Brown

County v. Department of Health and Social Services, 103

Wis. 2d 37, 307 N.W.2d 247 (1981) and County of Dane v.

Department of Health & Social Services, 79 Wis. 2d 323,

255 N.W.2d 539 (1977).

Both of those state cases involved a determination

of whether or not a county, a municipal corporation which

is clearly a creature of the state, and therefore lacking

standing to challenge the validity of any state statute,

had standing to challenge agency actions which were al-

leged to be in excess of its authority.

In analyzing the questions presented, the Wisconsin

Supreme Court clearly distinguished between those in-

stances where the creature of the state challenged the

will of the legislature, and those situations where the

claim was not made against the ‘‘creator” of the entity

involved. In concluding that counties were not precluded

from initiating court action to challenge the validity of

24

state agency action in excess of agency authority, the

court concluded that:

“Tf administrative agencies may legitimately act only

within the bounds of their delegated authority, then

to charge an agency with exceeding that authority is

not to question the propriety of legislative action but,

as we said in Dane County, ‘to vindicat[e] legislative

requirements.’ 79 Wis. 2d at 332, 255 N.W.2d, at

539.” Brown County v. Department of Health and

Social Services, 307 N.W.2d at p. 251.

These two earlier decisions by this Court have no

applicability to the action here, which challenges agency

and official conduct not authorized by the state legisla-

ture, rather than challenging the validity of state stat-

utes. Therefore, because the Northwestern National Life

Insurance Company and Western Turf Association cases

are clearly distinguishable, and because they have been

subsequently modified by _ Bellottt case, the circuit

let with the holdings of this

Court. It follows that certiorari would be inappropriate

ecourt’s decision is not in econ

on this basis as well.

C. The Petitioners’ Actions Do Not Fall Within The

Emergency Exception To The Predeprivation

Hearing Requirement.

The petitioners’ assertion that a predeprivation hear-

ing was not required, even if that argument had been time-

ly made, would not justify the exercise of certiorari for at

least two reasons. First of all, two of the cases of this

Court upon which the petitioners primarily rely, Hodel v.

Virginia Surface Mining and Reclamation Association,

452 U.S. 264 (1981) and Fahey v. Mallonee, 332 U.S. 245

(1947), both involved challenges to statutory regulatory

schemes on the grounds that these enactments violated

25

due process on their face. In both cases the legislation

challenged provided for temporary summary action if cer-

tain standards were met. Prompt postdeprivation hear-

ings were specifically required to be provided within a

short time thereafter.

Because both challengeswere to statutory enactments,

the Court in each case was able to point to a specific legis-

lative determination that the action to be taken was re-

quired to be done immediately in order to adequately pro-

tect public health or safety. The Court was thus able to

review that legislative determination to see if it was ra-

tionally supported. The Court determined, in both of those

cases, that the legislative concern was rationally based

and upheld the facial constitutionality of the laws.

In the present case, on the other hand, the state legis-

lature has made no such determination. In fact, to the

extent that the state legislature has made a determination

on the need for swift action at all, it makes that determina-

tion contrary to the position the petitioners’ assert. For,

the state statute at issue here clearly provides that parties

are not‘to be placed on the suspension of referrals list

until after they have received an evidentiary hearing on

the propriety of such placement. Thus, there is simply no

finding, legislative or otherwise, that a public interest in

health or safety existed, and which would have justified

departure from the usual rule that a due process hearing

is to be accorded before the deprivation occurs. See, Bod-

die v. Connecticut, 401 U.S. 371 (1971) and Logan v. Zim-

merman Brush Company, supra.

This Court has upheld summary deprivations in in-

dividual cases only in those special circumstances in which

26

the statute involved provided for a prompt postdepriva-

tion hearing and where that hearing would provide ade-

quate compensation to the aggrieved party for an errone-

ous deprivation. Barry v. Barchi, 443 U.S. 55 (1979) and

Stoehr v. Wallace, 255 U.S. 239, 246-247 (1921). Here, of

course, the statute provides only for a predeprivation hear-

ing, it does not provide for a postdeprivation hearing at

all. No time limits are specified for a postdeprivation

hearing on an erroneous placement, and there is no ad-

ministrative procedure by which the interests destroyed

by publication on the SOR list will be adequately compen-

sated. Nor does the availability of state tort remedies

satisfy this requirement, Logan v. Zimmerman Brush

Company, supra. Thus, petitioner’s reliance upon the bal-

ancing test set forth in Mathews v. Eldridge, 424 U.S. 319

(1976) is also misplaced.

The petition therefore fails to state a valid reason

for review on this basis as well.

CONCLUSION

For the above reasons, we respectfully submit that

the petition for certiorari should be denied.

Dated this 25th day of October, 1984.

Respectfully submitted,

Rosert M. Hessiin«, JR.

Attorney for Respondent

121 South Pinckney Street

P.O. Box 2509

Madison, WI 53701

(608) 255-8891

ee —_—

APPENDIX

TABLE OF CONTENTS

Memorandum from David Siegel to File

re Cameo-Senn, April 18, 1979

(Exhibit 138)

Testimony of Borislav Kresovie,

September 13, 1982 (R. 219, pp. 56-57)

Memorandum from David Siegel to File

re Session with Senn and Richards,

April 18, 1979 (Exhibit 137)

Memorandum from David Siegel to File,

May 9, 1979 (Exhibit 150)

Testimony of Thomas Van de Grift,

August 2, 1982 (R. 214, pp. 45-47, 52)

Testimony of Louis E. Remily,

August 5, 1982 (R. 215, p. 260)

Notice of Placement On The Suspension Of.

Referrals List, March 19, 1979 (Exhibit 104) ............

Testimony of Borislav Kresovie,

September 13, 1982 (R. 219, p. 65)

Notice of Appeal, Request for Fair

Hearing, and Petition for Declaratory

Ruling, March 30, 1979 (Exhibit 111)

Bureau of Quality Compliance, Weekly Meeting

Minutes, March 30, 1979 (Exhibit 114)

Testimony of Margaret Eiseman,

September 17, 1982 (R. 216, pp. 62-63)

Testimony of Peg Smelser,

June 17 and 21, 1982 (R. 215, pp. 307-308) .................

April, 1yi¥ Suspension of Referrals

List, April 4, 1979 (Exhibit 121)

18A

Correspondence from Charles J. Fiss, Jr.

to Dragomir Kreseviec, February 26, 1979

(Exhibit 82)

20A

APPENDIX

TABLE OF CONTENTS—Continued

Suspension of Referrals List, May 2, 1979

GON C) 21A

Defendants’ Proposed Jury Instruction

No. 22 (Liberty; Due Process) (R. 147, pp. 26-27) . 22A

Defendants’ Proposed Jury Instruction

No. 23 (Liberty; Reputation) (R. 147, p. 28) ~...-. 24A

Defendants’ Proposed Jury Instruction

No. 25 (Property) (BR. 147, por SL) nnnnnccecncceccecvceseeenenenneem 24A

Defendants’ Proposed Jury Instruction

No. 35 (Definition of Proximate Cause)

(BR. 147, po, 48) nanan enna ene 25A

1A

APPENDIX

[Date:] April 18, 1979

[To:] File

[From:] David Siegel

Attorney

Bureau of Quality Compliance

[Subject :] Cameo Convalescent Center—Darla Senn

The Cameo debacle has taken place in the following se-

quence of events:

1,

On September 22, 1978, Robert Hesslink, Attorney for

Cameo demanded Darla Senn’s survey notes. Mrs.

Senn refused to produce those notes.

By telephone, I requested that Darla Senn send me

the Notices of Violation and a list of all her evidence

for each NOV. She sent the NOV’s, but refused to

send the evidentiary material. Repeated requests to

Darla for her information was to no avail.

Only upon written directive from Charles Fiss, did

Mrs. Senn reluctantly respond with the materials.

On October 31, 1978, Mrs. Senn protested our release

of her notes and requested “participative withdrawal”

from the case. As best as I can tell, “participative

withdrawa!” is a Roman Catholic birth control tech-

nique. Although I didn’t know that Mrs. Senn was

Catholic, she of course may use whatever method that

she feels appropriate.

Mrs. Senn continued to be uncooperative and difficult

until she was served with a subpoena to produce a

tape recording on or about March 1, 1979.

Although Mrs. Senn is now cooperative to the extent

of preparing the case, she is insistent on trying this

case in her own way, and is most difficult to deal with.

Her evidence is often flaky and her investigation has

proven to be highly inadequate. For example, she

asked that I subpoena certain materials to the hear-

2A

ing so that she could find information. It is obvious

that the hearing is no time to conduct a survey in-

vestigation.

Jane Preston, who conducted the verification visit,

has considerable disagreement with Mrs. Senn’s sur-

vey findings, although she is somewhat reluctant to

directly contradict her.

DS :kk 754906

ec: Fran Richards

Darla Senn

~s

(Exhibit 138)

TESTIMONY OF BORISLAV KRESOVIC—-DIRECT

IXAMINATION BY MR. HANDZEL:

Q. Did you have a conference with Miss Preston regard-

ing the results of her findings during the verification

visit?

A. Yes, I did. I had a meeting with her.

Q. Who was present during that conference?

A. For most of the time Mrs. MacDonald was present

when she conveyed to us that she found everything

corrected except four NOVs that had substantially or

acceptable progress of correction and three she marked

as uncorrected. She conveyed this to me. I asked

her if I may have a copy of her half portion sheet of

her verification visit with her comments so that I

could convey it to the administrator as to what is not

corrected, and Mrs. MacDonald took notes for the

other corrected ones or acceptable progress ones.

There were a total of seven that she found. Four

she marked acceptable progress being made. Three

3A

she marked as uncorrected. The rest were marked as

all corrected.

Q. What is your understanding as to what a rating of

acceptable progress means?

A. My understanding is that you have almost corrected

it or it should be considered a corrected deficiency

or NOV.

Q. In addition to advising you of the status of violations

during that verification visit, did Mrs. Preston say

anything else?

A. Yes.

What did she say?

A. She looked at the NOVs and she said, “Why did she

do this to you?”

R. 219, pp. 56-57.

©

[Date:] April 18, 1979

[To:j File

[From:] David L. Siegel

Attorney

Bureau of Quality Compliance

[Subject:] Session with Darla Senn and Fran Richards

Regarding Cameo Hearing.

On April 16, 1979, Delores Kester and I met with Darla

Senn to prepare for the Cameo hearing. The session was

once again exasperating because of the difficulty in com-

municating with Mrs. Senn about the inadequacy of many

of her citations.

- . 7 7

Tickets for this hearing are now available at my desk.

Groups of ten or more will receive a 15% discount. Mail

4A

orders will be aecepted with a stamped, self-addressed en-

velope. Tickets will sell for $2.50 per day or $15.00 for

the entire hearing. Door prizes will be given to the most

imaginative costume worn to hearing. In addition, wager

will be taken as to who gets murdered first, on what day,

and at what time of day. All are weleome! It should be

a gala event!

DLS: to 137267

(Exhibit 137)

ral

Vv

CORRESPONDENCE/MEMORANDUM

STATE OF WISCONSIN

Date: May 9, 1979

To: File

From: David L. Siegel

Attorney

Bureau of Quality Compliance

Subject: Cameo Convalescent Center Hearing

The following is a summary and critique of the Notices of

Violation drafted and served by Darla Senn on Cameo

Convalescent Center, Inc.

NOV #111728: (Poliey on medical direction)—This cita-

tion is hased on a rather “liberal” interpretation of a ra-

ther vague H 32 rule. Since the facility has a book of var-

ious policies, it is rather doubtful that we can substanti-

ate that a “policy” on medical direction is explicitily re-

quired.

NOV #111729: (Discharge summaries)—If the facility

does not bring forth evidence that the missing discharge

summaries in fact were in the files, this NOV is rather

clear.

NOV #111730: (Thirty days doctor visits)-—-This citation

is well -ubstantiated.

NOV #111801: (Levels of care)—This citation is based

on Darla’s findings that the level of care box on the PPOC

5A

form had not always been checked. The boxes are present-

ly checked, but they may have been filled in later. Darla

did not follow-up with interviews of staff at Cameo.

NOV #111802: (Podiatry documentation)—Although the

podiatrist is not charting very well, the selection of rules

cited here are inappropriate.

NOV #111804: (Nurses meetings)—I am not sure what

we've got here.

NOV #111805: (Staffing deficiency)—Although the fa-

cility meets minimum staffing, Darla cited them for in-

sufficient staff because they don’t meet their “master

staffing plan,” which was provided orally to Darla by the

Director of Nursing. Darla also contends that the insuf-

ficient staff is proven by such “examples” as a nurse call

cord which was out of place. This citation is 100% un-

supportable because of a wholly inadequate investigation

and flaky conclusions of law.

NOV #111806: See 111805.

~ NOV #111807: (Procedure Manual)—Again, this H 32

rule is vague, and does not specify exactly what must be

* provided in the way of procedures. I doubt whether a pro-

cedure “on proper apparel and dressing a resident” is re-

quired as Darla indicates.

NOV #111810: (Rehabilitative nursing—Class “B”)--—

Darla concluded that Cameo lacked a rehabilitative nurs-

ing program because of three observations: (1) The fact

that approximately one third of the residents in Cameo

had a Foley catheter installed; without investigating the

specific needs of each of those patients, Darla jumped to

the conclusion that not enough was being done to remove

these people from catheters; (2) the fact that several

patients had been observed as not being turned according

to the posted schedules—again Darla did not follow-up

her observation to find out any good reason for the posi-

tioning of the patients; (3) the fact that several female

patieyts were dressed in clothing that was put on back-

6A

wards. In general, this citation represents a leap of the

imagination based on information that warranted further

investigation. Unfortunately no further investigation had

been conducted.

NOV #111811: (Bed rest without order—Class “B”)—

Chart review revealed several patients who had been in

bed for entire shifts without a doctor’s order. I believe

this finding warranted further investigation to discover

whether there had heen good reason for this bed rest. No

such investigation had heen conducted.

NOV #111817: (Medicine room temperature)—Darla en-

tered the medication room, asked the Director of Nursing

what the temperature was, and noted down what the DON

told her. At no time did Darla measure the temperature

herself. This method of investigation is amateurish and

unacceptable, based entirely on heresay [sic] and no sub-

stantiation of the accuracy of the thermometer.

NOV +111823: (Inadequate supply of restraints)—Darla

observed several residents were restrained with bed linen,

rather than commercially manufactured restraints. She

then jumped to the conelnsion that the facility had an in-

adequate supply of restraints. It now appears that, in

fact, Cameo had plenty of commercial restraints. They

simply chose to use bed linen in some instances. Whether

use of hed linen as restraints is acceptable or not, citing

the facilitv for an inadequate supply of restraints in [sic]

nonsensieal.

NOV +#111829: (ID sheet lacking minister’s name)—Cam-

eo was cited hecause several patients did not have the

name of a clergyman noted on their ID sheets, but only

had the name and number of a church. So what?

NOV #111813, 111819, 111820: (Handling of drug orders

and profiles by the pharmacist)—Darla telephoned the

contracted pharmacy from Cameo and spoke to an uniden-

tified female voice at the pharmacy. Based on her conver-

sation with this anonymous voice, Darla cited several vio-

lations. It is bad enough that she did not observe these

problems herself. It is wholly incredible that she did not

_even ask this person what her name was. This ‘‘method”

_ of investigation is again amateurish and ludicrous.

eo

7A

The rest of the Notices of violation appear to be more

sustainable, as they are based on documented clinical

charts maintained by Cameo. However, I fully expect to

be surprised by information brought forth at hearing that

should have been exchanged at the exit interview or be-

fore. Why all this time has to be wasted to do what shouid

have been done six months ago is beyond me.

DLS/jh 651108 (Exhibit 150)

fay

Vv

TESTIMONY OF DEPOSITION OF THOMAS VAN DE

GRIFT TAKEN AUGUST 2, 1982—MR. HANDZEL

READING FROM QUESTIONS POSTED BY MR.

HESSLINK:

* * * *

Q. And, Mr. Siegel ever communicated to you in anyway

his belief that a significant number of the Notices of

Violation which were issued by Darla Senn in 1978

could not be substantiated?

A. He communicated to me on several occasions that a

number—I wouldn’t use the word ‘‘significant’’ but a

number of the Notices of Violation he had some evi-

dentiary problems with.

Q. When is the first time he communicated to you that

there was some problem with the Notices of Violation?

A. Iam not certain of the date. it would have to be the

end—somewhere around the end of 1978, early part

of 1979.

* ” * *

Q. Was this one of the things in 1978 or ’79 he expressed

some concern which would have been consistent with

his statement here, ‘‘This citation is a hundred per-

cent unsupportable because of a wholly inadequate in-

vestigation and flakey conclusions of law” closed

quote?

ee

©

8A

Yes.

He expressed that fairly early on in 1979?

Yes.

W ould it be fair to say that Exhibit No. 150, although

you may not have seen that document, is a record of

statements, a memo for the file of statements which

he probably had properly made to you and others re-

garding these Notices of Violation?

Yes.

What authority did you have at the end of 1978, early

part of 1979, when Mr. Siegel was informing as to

the problems about a number of these NOVs, what

authority did you have yourself to make a decision, to

dismiss particular Notices of Violation?

None.

Who had the authority to make that decision?

Chuck Fiss, or up the ladder up the ladder.

™ * * *

a

Well, did you express a belief in these conversations

that one or more of these Notices of Violations were

invalid?

What I expressed, the nature of our problem with the

NOVs that Darla had done an inadequate job of in-

vestigating. She had poor investigative techniques

and that the fact that she had did not support the

violation.

In other words, that there was insufficient evidence

to support the violation?

Correct.

A.

_ 214, pp. 45-47, 52.

R

9A

Did you relay that information to other persons with-

in the Bureau of Quality Compliance prior to June

11, 1979?

Yes.

And, you would have relayed information to Mr. Fiss?

At some point, yes.

fa’

Vv

TESTIMONY FROM DEPOSITION OF LOUIS E.

REMILY TAKEN AUGUST 5, 1582 BY MR. HANDZEL:

Q.

A.

a

Ye, @ +. =

Were you ever advised that many of the violations,

Notices of Violation were unsupportable?

Yes.

By whom?

One of the exhibits was a memorandum from David

Siegel to the file which indicated lack of support for

a number of violations.

You had seen that memo previously?

Yes.

Prior to today?

Yes.

When?

I would assume shortly after it was written.

. 215, p. 260.

o

10A

NOTICE OF PLACEMENT

ON THE

SUSPENSION OF REFERRALS LIST

March 19, 1979

IMPORTANT NOTICE:

Administrator READ CAREFULLY

Conan Camahennent Canter Please note that if you wish

5790 South 27th Street to contest placement of

Milwaukee, WI 53221 your facility on the list by

: the Department, you must

send a hearing request to

the Department within the

10-day limit, even if you

have already requested a

hearing on other issues,

such as the violation itself.

Dragomir Kresovie,

Dear Mr. Kresoviec:

This is to inform you that, beginning in April, 1979,

your nursing home will appear on the Suspension of Re-

ferrals List, pursuant to § 50.04(4)(d), Wisconsin Stat-

utes. Your facility’s placement on the Suspension of Re-

ferrals List is based on the existing violations, enumer-

ated by Notice of Violation serial number, which are .isted

on page two of this letter.

While your facility is on the Suspension of Referrals

List, county agencies are prohibited by law from making

referrals to you, under § 50.04(4)(d)(1), Wisconsin Stat-

utes. This restriction takes effect upon publication of the

list, and will continue until the department notifies your

facility and the county agencies in writing that your facil-

ity has been removed from the Suspension of Referrals

List.

Your facility is entitiled to contest placement on the

fist. If you wish to contest this action, as provided in

§ 50.04(4)(d), you must request a hearing in writing

11A

within ten days of receipt of this notice, by a letter sent

to:

Enforcement Section—A ppeals

1 West Wilson Street, room 421

Madison, Wisconsin 53702

For your own protection, any such appeal should be sent

by certified mail.

If you have questions concerning this action by the

Department, you may call Enforcement Administration at

(608) 266-1258.

Sincerely yours,

/s/ Charles J. Fiss, Jr., Director

Bureau of Quality Compliance

Envelope Postmarked

March 20, 1979

Certified Mail PO 24470016

RECEIVED

March 21, 1979

Cameo Conv. Ctr., Ine.

NOTICE OF PLACEMENT ON THE SUSPENSION OF

REFERRAL LIST

Cameo Convalescent Center #2230

March 19, 1979 Page 2

. The placement of your facility on the Suspension of

Referrals List is based on the following existing viola-

tions, enumerated by Notice of Violation serial number:

12A

Violation # Class Reason* Violation # Class Reason*

111730 B 2 111807 C 2

111810 B 2 111809 C 3

111811 B 2 111822 C 3

111802 C 3

*KEY: REASONS FOR COUNTING LISTED

VIOLATIONS

1. The plan of correction for this violation has not been

timely submitted to the Department.

2. The plan of correction for this violation has been

disapproved.

3. The approved (or imposed) plan of correction for

this violation has not been carried out.

(Exhibit 104)

ray

Vv

TESTIMONY OF BORISLAV KRESOVIC—DIRECT

EXAMINATION BY MR. HANDZEL:

Q. Up to that point in time, April 30, 1979, had you had a

hearing on your appeal of the plans of correction?

No, sir.

Q. Had you had a hearing on your appeal of the notices

of violation?

A. No, sir.

R. 219, p. 65.

°

13A

STATE OF WISCONSIN

BEFORE THE WISCONSIN DEPARTMENT OF

HEALTH AND SOCIAL SERVICES

In the Matter of the Peti-

tion of CAMEO CONVAL-

ESCENT CENTER, INC. NOTICE OF APPEAL,

Requesting a Fair Hearing REQUEST FOR FAIR

Pursuant to §50.04(4) (e), HEARING, AND

Wis. Stats., and §§ 227.06 *PBFITION FOR

and 227.075, Wis. Stats., DECLARATORY

Involving a Dispute Be- RULING

tween Said Petitioner and

the Bureau of Quality Com- Case No. DOHE-160-78

pliance, Department of

Health and Social Services.

The Petitioner, through its attorneys, DeWitt, McAn-

drews & Sundby, S.C. and Robert M. Hesslink, Jr., by

and for its Notice of Appeal, Request for Fair Hearing,

and Petition for Declaratory Ruling, alleges as follows:

(1) Petitioner is a corporation organized under the

laws of the State of Wisconsin and its principal place of

business is 5790 South 27th Street, Milwaukee, Wisconsin

53221, whose principal business is providing shelter and

care to the elderly citizens in the general Milwaukee area,

and is a nursing home within the meaning of § 50.01(3),

Wis. Stats.

(2) The Respondent, Bureau of Quality Compliance,

Department of Health and Social Services, is a State

agency within the meaning of § 227.01(1), Wis. Stats., and

is charged with the authority and responsibility to regu-

late and inspect nursing homes in accordinance [sic] with

Chapter 50, Wis. Stats., and to determine whether or not a

14A

nursing home is to be placed on a suspension of referrals

list in accordance with § 50.04(4)(d), Wis. Stats.

(3) On Wednesday, March 21, 1978, the Petitioner

was served with a Notice of Placement on the Suspension

of Referrals List, by certified mail, and said document

was signed by Charles J. Fiss, Jr., Director of the Bureau

of Quality Compliance. That notice alleged that Cameo

Convalescent Center, Inc. would be placed on the monthly

Suspension of Referrals List commencing on April 1, 1979,

unless said Petitioner appealed that decision to the En-

forcement Section-Appeals, One West Wilson Street,

Room 421, Madison, Wisconsin 53702 within ten days of

the receipt of said notice. And,

(4) The placement of the Petitioner on the Suspen-

sion of Referral List would be illegal, improper and an

abuse of discretion.

WHEREFORE, the Petitioner requests the Depart-

ment to:

(1) Conduct an administrative hearing, as a Class 2

proceeding.

(2) Adjudge the Notice to Place on Suspension of

Referral List as illegal, invalid and an abuse of discretion.

(3) Remove any and all traces of said Notice of

Placement on Suspension of Referral List on any and all

files relating to the Petitioner within the Department or

from files of others acting in concert with the Department,

and return all copies of the Notice of Placement on Sus-

pension of Referral List to the Petitioner for destruction.

And,

(4) Enter an order requesting the Claims Board of

the State of Wisconsin to provide payment for any and all

SK

15A

costs, disbursements and reasonble [sic] attorney fees in

the necessary and proper defense of this Notice of Place-

ment on Suspension of Referral List and requesting the

Board to introduce the necessary legislation to pay said

claim.

Respectfully submitted,

DeWirr, McAnprews & Sunppy, S.C.

/s/ Robert M. Hesslink, Jr.

Attorneys for Petitioner

VERIFICATION

STATE OF WISCONSIN )

) ss.

County of Dane )

Personally came before me this — day of March, 1979,

Robert M. Hesslink, Jr., and stated under oath that he is

the attorney for the Petitioner in this action, that he has

read the foregoing petition, and that he is personally

aware of the facts alleged therein, and that the same is

true to the best of his knowledge and belief, except as to

matters alleged on information and belief as to which he

believes these to be true.

Notary Public, State of Wisconsin

My Commission

Received

Bur. of Quality Compliance

Enforcement Section

Nadene R. Dreher 3/30/79

(Handwritten Notation)

(Exhibit 111)

°

16A

BUREAU OF QUALITY COMPLIANCE

WEEKLY MEETING MINUTES

March 30, 1979

PRESENT: Chuck Fiss, Tom Van de Grift, Louis Remily,

Jan Richardson, Peg Smelser, Milt Stearns,

Diane Evensen

PEG SMELSER

Suspension of Referrals List

Of the 19 facilities on the list, 6 have not appealed to date.

(Exhibit 114)

°

TESTIMONY OF MARGARET EISEMAN — DIRECT

EXAMINATION BY MR. HESSLINK:

Q. Did you have occasions to observe people checking

with Nadene Dreher as to the status of appeals during

that first Suspension of Referrals List?

Yes.

“

Did you have occasion to observe Peg Smelser check-

ing on the status of appeals?

Yes.

How frequently would she do that that you observed?

That I observed personally?

Yes.

> ob Oo >

I—I don’t know, at least every other day.

ou le se

a ,

le AN pTeaden

17A

Q. And did you have occasion to observe David Siegel

checking the status of appeals that had been filed for

that first Suspension of Referra!s List?

A. Yes.

Q. How often did you observe Mr. Siegel checking on

the status of such appeals?

A. I can’t tell you how often. It was of great interest

to the staff in the Department and of one—TI believe

that there was a general and specific knowledge there.

Q. Did you have occasion to observe Mr. Vande Grift

checking on the status of appeals?

A. Yes.

Q. And how frequently did you observe him checking on

that status?

A. Again, often.

R. 216, pp. 62-63.

°

TESTIMONY FROM DEPOSITION OF PEG SMEL-

SER TAKEN JUNE 17 AND 21, 1982—MR. HANDZEL

READING QUESTIONS POSED BY MR. HESSLINK:

Q. What other responsibilities, if any, did you have with

respect to that list [Suspension of Referrals List]?

A. I would be responsible for the accuracy of the List,

for seeing that it was printed and distributed in a

timely fashion.

R. 215, pp. 307-308.

°

18A

April 4, 1979

April, 1979

SUSPENSION OF REFERRALS LIST

Attached is the April, 1979 Wisconsin nursing home Sus-

pension of Referrals List, published by the Department

of Health & Social Services, pursuant to $50.04(4)(d),

Wisconsin Statutes. This list remains in effect until the

publication of next month’s list.

The list is divided into three parts:

I. SUSPENSION OF ADMISSIONS. Facilities on

this list have outstanding serious or life-threaten-

ing violations. These facilities are forbidden, by

law, to admit any residents until removed from this

list by written notice from the department. In ad-

dition, their referral privileges are are [sic] re-

stricted as in #2, below.

Il. SUSPENSION OF REFERRALS. Facilities on

this list have excessive outstanding violations of

state codes and/or statutes. County 51.42 Boards,

51.437 Boards, and other county social service agen-

cies are forbidden, by law, to refer anyone to facili-

ties which are on this list. Other referral groups

and agencies are strongly urged to use this list in

making choices of facilities for referrals.

Til. REMOVAL OF RESTRICTIONS. Facilities on

this list appeared on List #1 or #2 during the pre-

vious month. By correcting violations, they either

a) have their admissions privileges reinstated, but

continue to have referrals restricted; or

b) have had all restrictions removed.

In each section of the list, facilities are listed in alpha-

betical order by county, for the ease of those using the

list.

In the event that a facility is removed from the Suspen-

sion of Admissions list during the effective period of this

.

i RR ee

19A

list, it will receive written notice to that effect from the

department.

If you do not wish to continue receiving this list monthly,

or if you know of some person or agency who should be

receiving this list but is not, please use the form on the

back of this letter to notify me. If you have any ques-

tions about this list or its use, please contact the Enforce-

ment Administration Section at (608) 266-8847.

Sincerely,

/s/ Charles J. Fiss, Jr., Director

Bureau of Quality Compliance (Emphasis in original)

—_———

WISCONSIN DEPARTMENT OF HEALTH &

SOCIAL SERVICES SUSPENSIONS LIST

APRIL, 1979

I. SUSPENSION OF ADMISSIONS LIST

Five facilities have appealed placement on the Suspension

of Admissions List.

IT. SUSPENSION OF REFERRALS LIST

Facilities on this list are prohibited by law from receiving

referrals from county social service boards, 51.42 Boards,

or 51.437 Boards, until those facilities appear on list ITI

below, the Removal of Restrictions List.

Twelve facilities have appealed placement on the Suspen-

sion of Referrals List.

CO./FAC. NAME CTY./TOWN LIC# LIC. NAME

Dane County

Brieckson’s Nursing Home Stoughton 2047 Duane Brickson

Door County

Door County Mem. Hosp.

ECF & N.H. Sturgeon Bay 2196 Door County

Memorial Hosp.

Corporation

20A

Milwaukee County

Cameo Convalescent Milwaukee 2230 Cameo

Center Convalescent

Center, Inc.

Ill. REMOVAL OF RESTRICTIONS LIST

Because this is the first publieation of the Suspension of

Referrals List, there are no removals from the list to re-

port. However, in future months, facilities listed in this

area will be those which appeared on the previous month’s

suspensions lists and have been removed from one and/or

the other of the lists. Those which are designated with an

asterick (*) will be those which have had their admissions

privileges reinstated, but remain on the Suspension of

Referrals List.

(Exhibit 121)

°

February 26, 1979

Dr. Dragomir Kresovic, Administrator

Cameo Convalescent Center

5790 South 27th Street

Milwaukee, Wisconsin 53221

Dear Mr. Kresovie:

” > a a

When a facility receives notice that it has been removed

from the Suspension of Admissions List, it may begin ad-

mitting new residents that day. The Suspension of Re-

ferrals List, however, will be in force from the publication

date until publication of the next list, and referral agen-

cies may resume referrals to a facility only when they

have received a list indicating that the facility has been

removed from the Suspension of Referrals List.

—

Sincerely yours,

/s/ Charles J. Fiss, Jr., Director

Buregu of Quality Compliance

(Exhibit 82)

ny

Vw

21A

May 2, 1979

SUSPENSION OF REFERRALS LIST

Attached is the May, 1979 Wisconsin Nursing Home Sus-

pension of Referrals List, published by the Department of

Health and Social Services, pursuant to §50.04(4)(d), Wis-

consin Statutes. This list remains in effect until the publi-

cation of next month’s list.

The list is divided into three parts:

I. Suspension of Admissions. Facilities on this list

have outstanding serious or life-threatening viola-

tions. These facilities are forbidden, by law, to ad-

mit any residents until removed from this list by

written notice from the department. In addition,

their referral privileges are restricted as in #2, be-

low.

II. Suspension of Referrals. Facilities on this list have

excessive outstanding violations of state codes and/.,

or statutes. County 51.42 Boards, 51.437 Boards, and

other county social service agencies are forbidden,

by law, to refer anyone to facilities which are on this

list. Other referral groups and agencies are strongly

urged to use this list in making choices of facilities

for referrals.

Ill. Removal of Restrictions. Facilities on this list ap-

peared on list #1 or #2 during the previous month.

By correcting violations, they either:

a) have their admissions privileges reinstated, but

continue to have referrals restricted; or

b) have had all restrictions removed.

In each section of the list, facilities are listed in alphabeti-

cal order by county, for the ease of those using the list.

In the event that a facility is removed from the Suspension

of Admissions list during the effective period of this list,

it will receive written notice to that effect from the depart-

ment.

22A

If you do not wish to continue receiving this list monthly,

or if you know of some person or agency who should be

receiving this list but is not, please use the form on the

back of this letter to notify me. If you have any questions

about tliis list or its use, please contact the Enforcement

Administration Section at (608) 266-8847.

Sincerely,

/s/ Charles J. Fiss, Jr.

Director

Bureau of Quality Compliance (Emphasis in original)

WISCONSIN DEPARTMENT OF HEALTH &

SOCIAL SERVICES SUSPENSIONS LISTS

MAY, 1979

III. REMOVAL OF RESTRICTIONS LIST

There are no removals from the list to report. Facilities

listed in this area are those which have appeared on the

previous month’s suspensions list and have been removed

from one and/or the other of the lists. Those which are

designated with an asterisk (*) are those which have had

their admissions privileges reinstated, but remain on the

Suspension of Referrals List.

(Exhibit 148)

ty

Vv

—_

DEFENDANTS’ PROPOSED JURY INSTRUCTION

NO. 22 (LIBERTY; DUE PROCESS)

[As stated before,] The Fourteenth Amendment to the

Federal Constitution provides that no State shall deprive

any person of his liberty without due process of law. The

—e eo Ss

23A

“liberty” of the individual, which the Federal Constitution

thus secures and protects, is not an absolute and unquali-

fied freedom or privilege to do as one pleases at all times

and under all circumstances; but is always subject to rea-

sonable restraints, including of course such restraints as

are imposed by law.

The plaintiff in this case, in common with the defend-

ants and all other persons living under the protection of

our Constitution, had the legal right at all times not to

be deprived, without due process of law, of any liberty

secured or protected to him by the Constitution or laws

of the United States.

To be deprived of liberty “without due process of law”

means to be deprived of liberty without authority of the

law. Before the jury can determine, then, whether or not

the plaintiff was deprived by the defendants of any of his

liberty under the Federal Constitution, “without due proe-

ess of law”, the jury must first determine, from a prepon-

derance of the evidence in the case, whether the defendants

knowingly did the acts alleged and, if so, whether, under

the circumstances shown by the evidence in the ease, the

defendants acted within or without the bounds of their

lawful authority under State law.

For if the defendants acted within the limits of their

lawful authority under State law, then the defendants could

not have deprived the plaintiff of any liberty “without due

process of law”, since the Court finds and instructs you

that the State law applicable in this case meets the re-

quirements of the Federal Constitution.

Federal Jury Practice and Instructions, Devitt &

Blackmar (3rd Ed.) sec. 92.11, with deletions of paragraphs

relating to prisoner litigation only.

ra’

Vv

24A

DEFENDANTS’ PROPOSED JURY INSTRUCTION

NO. 23 (LIBERTY; REPUTATION)

The plaintiffs complain of injury to their professional

and business reputations. The Constitution, however, does

not protect against damage to reputation unless the dam-

age to reputation also works to deny the plaintiffs of a

right or status previously recognized by state law. In other

words, it is not enough for plaintiffs to show their repu-

tations have been injured by the defendants. They must

show that the damage to their reputations also altered or

extinguished a right or status previously recognized by

state law.

The Supreme Court has given three examples of what

it means to alter or extiuguish a right or status previously

recognized by state law. One of the examples is the sus-

pension of a student from school based upon charges of

misconduct. Another is the revocation of a criver’s license.

And a third is the revocation of parole.

Paul v. Davis, 424 U.S. 693 (1976).

Margoles v. Tormey, 643 F.2d 1292 (7th Cir. 1981).

Terket v. Lund, 623 F.2d 29, 31 n. 1 (7th Cir. 1980).

ray

Vv

DEFENDANTS’ PROPOSED JURY INSTRUCTION

NO. 25 (PROPERTY)

Plaintiffs allege that the defendants deprived them of

their property without due process of law. In order to

make a legal judgment about this claim, you will be asked

to answer certain questions.

25A

One of the questions asked is whether one or more

of the defendants deprived one or more of the plaintiffs

of property. Under the law, property is more than land,

eutomecbiles, and other possessions. It includes benefits

which state law gives to its citizens.* So in answering

whether the plaintiffs were deprived of property, you

must consider whether plaintiffs lost some possessions or

rights granted by state law.

*Board of Regents v. Roth, 408 U.S. 564, 576-78 (1972).

fy.

Vv

DEFENDANTS’ PROPOSED JURY INSTRUCTION

NO. 35 (DEFINITION OF PROXIMATE CAUSE)

An injury or damage is proximately caused by an act,

or a failure to act, whenever it appears from the evidence

in the case, that the act or omission played a substantial

part in bringing about or actually causing the injury or

damage; and that the injury or damage was either a direct

result or a reasonably probable consequence of the act or

omission.

,

F ederal Jury Practice and Instructions, Devitt &

Blackmar (3rd ed.) see. 80.18.