A federal lawsuit alleging state officials targeted a group of nursing homes with enforcement procedures and violated their constitutional rights can proceed, a judge ruled after finding the plaintiff had sufficiently pleaded its claims.
Neiswanger Management Services LLC owns and operates five nursing home facilities that underwent multiple state inspections between 2012 and 2017 that resulted in fines, sanctions and citations.
Hyattsville-based Neiswanger filed suit last year against Patricia Nay, executive director of the Maryland Office of Health Care Quality and Dennis Schrader, then-secretary of the Department of Health, among others. Neiswanger claimed Schrader was urged by Nay, who oversees surveyors who report facilities’ violations, to implement and ultimately issue a ban on admissions for Neiswanger facilities in retaliation for the facilities’ appeal of citations.
U.S. District Judge Paul W. Grimm denied the defense motion to dismiss March 26 and ordered the case to proceed to discovery. The alleged retaliatory actions taken against Neiswanger — increased surveys, citations and a ban on admissions — could theoretically have chilled other facilities from exercising their First Amendment rights, Grimm ruled.
“Moreover, all of the alleged retaliatory actions resulted in Neiswanger devoting considerable time, energy, and money as it attempted to challenge the Defendants conduct as well as stave off further retaliatory action by them,” Grimm wrote. “Defendants’ alleged actions constituted an existential threat to Neiswanger and put its facilities at jeopardy of losing state and federal funding, as well as their licenses to operate. If such conduct was insufficient to chill a reasonable person’s exercise of their First Amendment rights — given the financial implications and the potential for closure — it is hard to imagine what would be.”
The defendants argued Neiswanger’s fighting the citations was not close enough in time to the alleged retaliation to prove it was related but Grimm said “numerous” protected activities followed closely by retaliation were set forth in the lawsuit. Neiswanger pointed to citations issued to a facility within one month of the facility prevailing in court on a citation appeal, as well as surveys initiated at multiple facilities the month after legislation was introduced in the Maryland General Assembly at Neiswanger’s request.
“These alleged retaliatory actions each followed Neiswanger’s protected activities by one month or less,” Grimm wrote.
Grimm also found the plaintiff sufficiently pleaded due process and equal protection violations and declined to find Nay and Schrader had absolute immunity from the suit but said the parties can revisit whether they have qualified immunity after discovery has been conducted.
Neiswanger is represented by Scott D. Nelson of Walker, Murphy & Nelson LLP in Rockville as well as attorneys from Atlanta-based Arnall Golden Gregory LLP. Nelson was not immediately available for comment Friday.
A spokeswoman for the attorney general’s office did not immediately respond to a request for comment Friday.
The case is Neiswanger Management Services LLC et al. v. Patricia T. Nay et al., 8:17cv00746.
The facilities also were involved in litigation with the state over whether Attorney General Brian E. Frosh can seek a court order blocking the involuntary discharge of patients. The Court of Appeals upheld Frosh’s power to do so under the Patient’s Bill of Rights in February.
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