In the Matter of Unity Health Care, Class F Home License No. 352187 and Unity Home Care, Inc., Class A Professional Home Care License No. 353694. ( 2017 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).
STATE OF MINNESOTA
IN COURT OF APPEALS
A16-0682
In the Matter of Unity Health Care,
Class F Home License No. 352187
and Unity Home Care, Inc.,
Class A Professional Home Care License No. 353694.
Filed February 27, 2017
Affirmed; motion granted
Reilly, Judge
Minnesota Department of Health
File No. OAH #10-0900-30263
Lateesa T. Ward, Ward & Ward, P.C., Minneapolis, Minnesota (for relator Unity Health
Care)
Lori Swanson, Attorney General, Audrey Kaiser Manka, Cody Zustiak, James P. Barone,
Assistant Attorneys General, St. Paul, Minnesota (for respondent Commissioner of
Minnesota Department of Health)
Considered and decided by Reilly, Presiding Judge; Connolly, Judge; and
Bjorkman, Judge.
UNPUBLISHED OPINION
REILLY, Judge
Relator Unity Health Care challenges a final order by the commissioner of health
(the commissioner) revoking its Class F home care license, refusing to renew its Class A
home care license, and affirming fines imposed by respondent department of health (the
department). Relator argues that: (1) Minn. Stat. § 144A.46, subd. 3(a) (2014),1 is
unconstitutionally vague and overbroad, and results in an unconstitutional taking; (2) the
commissioner’s order was made on unlawful procedure and contains errors of law; (3) the
revocation is not supported by substantial evidence and is arbitrary and capricious; (4) the
revocation is moot; (5) the refusal to remove a commissioner’s representative as decision-
maker was an abuse of discretion; and (6) the revocation is against public policy. For the
reasons discussed below, we grant the commissioner’s motion to strike portions of relator’s
brief and affirm the commissioner’s order.
FACTS
Pursuant to Minn. Stat. § 144A.45, subd. 2 (2014), the department may monitor and
inspect home health care providers to ensure providers are complying with applicable laws
and regulations. As part of this process, the department may conduct impromptu on-site
inspections of facilities, observations of staff and care providers, surveys of providers,
interviews, and document review. Written correction orders are issued for violations of
applicable statutes and rules, and the department specifies a time period in which the home
care provider must correct the violation. Each written correction order includes one or
more “tag numbers,”2 cites the rule or law violated, and provides the factual basis for the
1
The parties stipulated below that the 2014 health-care-licensing statutes govern this case,
as certain provisions of the home-care-licensing statutes have since been repealed. See
Interstate Power Co. v. Nobles County Bd. of Comm’rs, 617 N.W.2d 566, 575 (Minn. 2000)
(noting that, generally, “appellate courts apply the law as it exists at the time they rule on
a case”). For this reason, this appeal will cite to the 2014 version of the home-care-
licensing statutes.
2
A “tag number” refers to the statute or rule the department determines provides the basis
for the correction order.
2
issuance of the correction order. After the specified period passes, the department may
conduct a follow-up visit to determine whether the violation has been corrected. If a facility
fails to correct the violations within the specified period, the department is not required to
provide an extension and may impose fines or penalties as it determines necessary.
In 2007, the department issued relator a Class F license to operate a home care
facility and a Class A professional home care agency license. From 2007 to 2012, relator
owned and operated four houses registered as housing with services establishments. See
Minn. Stat. ch. 144D (2014). The department began conducting surveys of relator’s houses
in May 2011 and surveyed relator on multiple occasions in 2011, 2012, and 2013. Each
survey resulted in the issuance of written correction orders. Following a survey conducted
in May 2011, the department issued an immediate correction order for failure to comply
with Minn. Stat. § 144A.44, subd. 1(2) (2010), which requires that all clients receive care
that complies with accepted medical and nursing standards. In October 2011, the
department imposed a conditional license, which restricted relator’s authority to operate as
a Class F and Class A home care provider and required that relator: (1) provide a list of all
current clients to the department and refuse to admit new clients; (2) hire an independent
consultant “to review, evaluate, and make recommended changes to the provider’s practice
[to] ensure that the licensee is in compliance with state laws and regulations governing
home care practices, and submit weekly reports directly” to the department; (3) develop a
written plan outlining the steps relator will take to ensure full compliance; and (4) notify
clients, clients’ care providers, and staff of the department’s action against relator’s license.
3
In an effort to comply with the conditional terms, relator hired Pathway Health
Services, Inc. and Home Care Consultants. Pathway submitted weekly reports to the
department, notifying the department of relator’s continued improvements. In a February
2012 letter to the department, Pathway noted that it “can communicate with great
confidence” that relator has “demonstrated full licensure requirements as outlined in [the
department’s] Plan of correction.” Relying on this letter, relator requested that the
department lift the conditional license. In a letter dated February 2012, the department
denied relator’s request, noting that it will not remove the conditional terms imposed until
it may “make its own determination as to Unity’s compliance status.”
Despite relator’s efforts to comply with the conditional-license terms, the
department found numerous ongoing violations during the November and December 2011
surveys, the January and March 2012 surveys, and the June 2013 survey. In June 2012,
the department notified relator of its intent to revoke relator’s Class F license under Minn.
Stat. § 144A.46, subd. 3(a), and deny renewal of relator’s Class A license under Minn. R.
4668.0012, subpart 15, items A and C.
Relator requested a contested-case hearing before an administrative-law judge
(ALJ) to challenge the department’s decision. The contested-case hearing lasted over 30
days, beginning in September 2014 and ending in April 2015. Following the hearing, the
ALJ issued findings of fact, conclusions of law, and a recommendation that the
commissioner affirm the department’s decisions to revoke relator’s Class F license and
deny renewal of its Class A license. The ALJ based his recommendation on the “imminent
danger” and “serious health and safety risk” to relator’s clients.
4
Relator then requested reconsideration of the ALJ’s decision, and the commissioner
upheld the department’s revocation and nonrenewal of relator’s licenses. This decision
constituted the commissioner’s final order. See Minn. Stat. § 14.61 (2014). Relator
appealed and filed motions to stay enforcement of the commissioner’s final order, and
seeking reconsideration of the final order and reopening of the evidentiary record. The
commissioner denied relator’s motions. 3
DECISION
The Minnesota Administrative Procedure Act governs the scope of this court’s
review and provides that a “person aggrieved by a final decision in a contested case is
entitled to judicial review of the decision.” Minn. Stat. § 14.63 (2014). An appellate court
reviewing an agency decision may affirm, reverse, remand, or modify “the decision if the
substantial rights of the petitioners may have been prejudiced” because the administrative
3
The exhibits offered by relator but not accepted by the ALJ are not part of the record and
thus cannot be relied upon by relator in this appeal. In contested-case proceedings under
the Minnesota Administrative Procedure Act, agencies “may admit and give probative
effect to evidence which possesses probative value commonly accepted by reasonable
prudent persons in the conduct of their affairs”; “shall give effect to the rules of privilege
recognized by law”; and “may exclude incompetent, irrelevant, immaterial, and repetitious
evidence.” Minn. Stat. § 14.60, subd. 1 (2014). And all evidence “offered into evidence
by a party to a contested case proceeding, shall be made a part of the hearing record of the
case.” Id., subd. 2. When read in context with subdivision one, which allows an agency
to exclude evidence, subdivision two is properly understood to include in the record
documents available to an agency, offered into evidence by a party, and not excluded by
the ALJ or agency. See Am. Family Ins. Grp. v. Schroedl, 616 N.W.2d 273, 277 (Minn.
2000) (“We are to read and construe a statute as a whole and must interpret each section in
light of the surrounding sections to avoid conflicting interpretations.”). Accordingly,
because the exhibits excluded by the ALJ are not part of the record under the Minnesota
Administrative Procedure Act, we grant the department’s motion to strike references to
them in relator’s briefs.
5
decision (a) violated a constitutional provision, (b) exceeded the agency’s jurisdiction or
statutory authority, (c) was based on unlawful procedure, (d) was affected by an error of
law, (e) was unsupported by substantial evidence in view of the entire record as submitted,
or (f) was arbitrary or capricious. Minn. Stat. § 14.69 (2014).
When reviewing agency decisions, this court recognizes that “decisions of
administrative agencies enjoy a presumption of correctness.” In re Minn. Power, 838
N.W.2d 747, 757 (Minn. 2013) (quotation omitted). And we defer to agencies’ expertise
and “special knowledge in the field of their technical training, education, and experience.”
Id. (quotation omitted). “While we review legal questions de novo, we review factual
determinations made within the scope of the agency’s statutory authority under the
substantial evidence standard.” Id.I. The revocation of relator’s home care license is constitutional.
When “evaluating challenges to the constitutionality of statutes, this court
recognizes that the interpretation of statutes is a question of law.” State v. Machholz, 574
N.W.2d 415, 419 (Minn. 1998) (quotation and citation omitted). Appellate courts presume
Minnesota statutes are constitutional and therefore exercise the power to declare a statute
unconstitutional only “with extreme caution and only when absolutely necessary.” Id.(quotation and citation omitted). This court reviews constitutional challenges de novo,
State v. Melchert-Dinkel, 844 N.W.2d 13, 18 (Minn. 2014), and the party challenging the
statute bears the “burden of demonstrating beyond a reasonable doubt that the statute is
unconstitutional.” Machholz, 574 N.W.2d at 419 (quotation omitted).
6
Relator challenges the constitutionality of the commissioner’s revocation action,
arguing that Minnesota’s home-care-licensure statute is vague and overbroad, and results
in an unconstitutional taking.
Minnesota statutes section 144A.46, subdivision 3(a), provides:
The commissioner may refuse to grant or renew a license, may
suspend or revoke a license, or may impose a conditional
license for violation of statutes or rules relating to home care
services or for conduct detrimental to the welfare of the
consumer. . . . Terms for a suspension or conditional license
may include one or more of the following and the scope of each
will be determined by the commissioner:
(1) requiring a consultant to review, evaluate, and make
recommended changes to the provider’s practices and
submit reports to the commissioner at the cost of the
provider;
(2) requiring supervision of the provider’s practices at
the cost of the provider by an unrelated person who has
sufficient knowledge and qualifications to oversee the
practices and who will submit reports to the
commissioner;
(3) requiring the provider or the provider’s employees
to obtain training at the cost of the provider;
(4) requiring the provider to submit reports to the
commissioner;
(5) prohibiting the provider from taking any new clients
for a period of time; or
(6) any other action reasonably required to accomplish
the purpose of section 144A.45, subdivision 2, and this
subdivision.
Id.
A. Minn. Stat. § 144A.46, subd. 3(a), is not unconstitutionally vague.
Because Minnesota’s home-care-licensure statute does not define “conduct
detrimental to the welfare of the [client,]” and because the statute similarly fails to define
7
whose conduct is at issue, relator argues the statute is unconstitutionally vague, that no
reasonable person could anticipate the behavior “sufficiently severe enough” to trigger
penalties under the statute.
The Due Process Clause of the Fourteenth Amendment prohibits vague statutes. In
re On-Sale Liquor License, Class B., 763 N.W.2d 359, 366 (Minn. App. 2009). Vague
statutes may violate due process in at least two ways: (1) they may “trap the innocent by
not providing adequate warning of unlawful conduct,” and (2) they may “unleash the
potential for unfair and uneven law enforcement by not establishing minimal guidelines.”
In re Welfare of B.A.H., 845 N.W.2d 158, 163 (Minn. 2014) (quotation omitted).
Accordingly, “a party may bring a void-for-vagueness challenge if the statute at issue
encompasses constitutionally protected conduct or if there is a potential for arbitrary and
discriminatory enforcement.” In re Minn. Dep’t of Nat. Res. Special Permit No. 16868,
867 N.W.2d 522, 532-33 (Minn. App. 2015), review denied (Minn. Oct. 20, 2015).
In essence, a statute is void for vagueness if the statute is so indefinite that people
“must guess at its meaning,” Humenansky v. Minn. Bd. of Med. Exam’rs, 525 N.W.2d 559,
564 (Minn. App. 1994), review denied (Minn. Feb. 14, 1995), leaving enforcers “free to
decide, without any legally fixed standards, what is prohibited and what is not in each
particular case,” State v. Bussmann, 741 N.W.2d 79, 83 (Minn. 2007). But inclusion of
general language alone does not render a statute unconstitutionally vague. See Hard Times
Café, Inc. v. City of Minneapolis, 625 N.W.2d 165, 171-72 (Minn. App. 2001). This court
will not declare a statute void for vagueness and uncertainty “where the meaning thereof
may be implied, or where it employs words in common use, or words commonly
8
understood . . . or an unmistakable significance in the connection in which they are
employed.” Invention Mktg., Inc. v. Spannaus, 279 N.W.2d 74, 80 (Minn. 1979) (quotation
omitted).
Relator argues that Minnesota’s home-care-licensing statute is unconstitutionally
vague because it allows the department to revoke relator’s license for detrimental conduct
by its staff, rather than its owner and managers. This argument is both absurd and
disingenuous. A reasonable person would understand that, as a home care provider,
relator’s owner and managers are responsible for the actions of its staff. And this court
previously affirmed the department’s finding of maltreatment of a vulnerable adult by
relator’s owner, Beth Balenger. See Balenger v. Dep’t of Health, No. A15-0226, 2015 WL
7357192, at *1 (Minn. App. Nov. 23, 2015) (holding that the owner of Unity maltreated a
vulnerable adult when she hosed a client down with water from a garden hose), review
denied (Minn. Feb. 16, 2016). Thus, the omission of language requiring home care
providers’ management to personally engage in detrimental and unlawful conduct does not
render the statute unconstitutionally vague.
Moreover, the statute specifically prohibits conduct in “violation of statutes or rules
relating to home care services” or “conduct detrimental to the welfare of the consumer.”
Minn. Stat. § 144A.46, subd. 3(a). The American Heritage Dictionary defines
“detrimental” as “[c]ausing damage or harm; injurious.” The American Heritage
Dictionary 495 (5th ed. 2011). Relator does not contest the findings that relator failed to
properly sanitize and care for a client’s peripherally inserted central catheter line, “hosed
off” a client confined to a wheelchair using a garden hose, failed to properly document
9
clients’ medications and the services provided, repeatedly administered incorrect insulin
dosages resulting in multiple hospitalizations, and provided grossly inadequate wound and
perineal care. A reasonable person would understand that this conduct is detrimental to a
client’s welfare and violates the rules governing home care services. Minnesota’s home-
care-licensing statute is not void for vagueness.
B. Minn. Stat. § 144A.46, subd. 3(a), is not unconstitutionally overbroad.
Relying on its void-for-vagueness argument, relator similarly argues the statute is
overbroad. A statute is overbroad if it “prohibits constitutionally protected activity, in
addition to activity that may be prohibited without offending constitutional rights.”
Machholz, 574 N.W.2d at 419. Before appellate courts may address a facial overbreadth
challenge, they must determine whether the statute in question implicates a constitutional
right. Id. If the statute does not implicate a constitutional right, “then we need go no further
because no constitutional question is raised.” Id. Relator fails to identify any
constitutionally protected activity prohibited by the statute, and instead broadly asserts,
without support, that the statute “provides opportunities for overzealous regulators to abuse
their discretion.” Because relator failed to satisfy its burden of demonstrating that the
statute is unconstitutional, this argument is unavailing.
C. Revocation of relator’s license under Minn. Stat. § 144A.46 does not violate its
right to substantive or procedural due process.
1. The department’s revocation action did not violate relator’s Fourteenth Amendment
right to substantive due process.
The doctrine of substantive due process is derived from the Due Process Clause of
the Fourteenth Amendment, see U.S. Const. amend. XIV, § 1, which “protects individuals
10
from certain arbitrary, wrongful government actions regardless of the fairness of the
procedures used to implement [them].” Gustafson v. Comm’r of Human Servs., 884
N.W.2d 674, 683 (Minn. App. 2016) (quotation omitted). Disqualification from a state-
licensed program may violate an entity’s right to substantive due process if the statute
applied is unreasonable, results in arbitrary or capricious interference, or lacks, at a
minimum, “a rational relation to the public purpose sought to be served.” Obara v. Minn.
Dep’t of Health, 758 N.W.2d 873, 879 (Minn. App. 2008) (quotation omitted).
Review of a substantive-due-process challenge is a two-step process. First, this
court must question whether the challenge involves a fundamental right. Gustafson, 884
N.W.2d at 683. If a fundamental right is at stake, “the state must show that its action serves
a compelling government interest.” Northwest v. LaFleur, 583 N.W.2d 589, 591
(Minn. App. 1998), review denied (Minn. Nov. 17, 1998). When the statute at issue does
not affect a fundamental right, substantive due process requires only that the statute bear a
rational relation to the legitimate public purpose sought. State v. Bernard, 859 N.W.2d
762, 773 (Minn. 2015) (quotation omitted), aff’d sub nom. Birchfield v. North Dakota, 136
S. Ct. 2160 (2016). In essence, the state “must have a public interest in regulating an
activity and . . . the regulation imposed must be reasonable and appropriate for
accomplishing its purpose.” State v. Stewart, 529 N.W.2d 493, 497 (Minn. App. 1995).
“Generally, the protection of health, morals, safety, or welfare are legitimate purposes.”
Thul v. State, 657 N.W.2d 611, 617 (Minn. App. 2003).
The United States Supreme Court has never held that the right to pursue a
specialized profession is a fundamental right. See Conn v. Gabbert, 526 U.S. 286, 291-92,
11
119 S. Ct. 1292, 1295-96 (1999) (“[T]he liberty component of the Fourteenth
Amendment’s Due Process Clause includes some generalized due process right to choose
one’s field of private employment . . . subject to reasonable government regulation.”);
Nebbia v. N.Y., 291 U.S. 502, 527-28, 54 S. Ct. 505, 510-12 (1934) (holding that the right
to pursue a particular profession or “calling” is a protected right conditioned upon, and
subject to, reasonable government regulation). Rather, regulation of the right to pursue a
particular profession is subject to rational-basis review. See Comm’r of Human Servs. v.
Buchmann, 830 N.W.2d 895, 901 (Minn. App. 2013), review denied (Minn. July 16, 2013).
Accordingly, this court must apply the rational-basis test to determine whether application
of the home-care-licensing statute violates relator’s substantive-due-process rights.
The legislature enacted the home-care-licensing statute to protect the safety of
vulnerable adults and adults in need of care. See Minn. Stat. §§ 144A.44, subds. 1, 2. And
the legislature established the Home Care Bill of Rights to ensure home care agencies
provide appropriate individualized client plans, follow accepted nursing and medical
standards, and treat clients with respect. See id. Protecting the welfare of vulnerable adults
and persons in need of home care is a legitimate public purpose. See Thul, 657 N.W.2d at
617.
The home-care-licensing statute is also rationally related to protecting public safety.
The provision at issue allows the commissioner to revoke, suspend, deny, or refuse to
renew licenses of home care providers whose “services or . . . conduct [is] detrimental to
the welfare of the consumer.” Minn. Stat. § 144A.46, subd. 3(a). It is rational for the state
to determine that the public is safer if the state revokes, suspends, denies, or refuses to
12
renew the licenses of providers whose services or conduct is harmful to clients. The home-
care-licensing statute therefore does not violate relator’s substantive-due-process rights.
2. The department’s revocation action also did not violate relator’s Fourteenth
Amendment procedural-due-process rights.
Relator also argues that its procedural-due-process rights were violated. “The
foundational principle of the right to due process is an opportunity to be heard upon such
notice and proceedings as are adequate to safeguard the right for which the constitutional
protection is invoked.” Gams v. Houghton, 884 N.W.2d 611, 618 (Minn. 2016) (quotation
omitted). Review of the record clearly shows that the department afforded relator sufficient
procedural due process, including an over 30-day contested hearing, during which, the ALJ
received and reviewed an almost 15,000-page record, before terminating relator’s licenses.
3. Revocation of relator’s license under Minn. Stat. § 144A.46 does not result in an
unconstitutional taking.
Relator next argues that the commissioner’s decision to revoke and refuse to renew
its home care licenses violates the Takings Clause. Relator did not cite to the United States
or Minnesota Constitutions, but we assume that relator intended to argue the taking was
unconstitutional under both.
The Fifth Amendment to the United States Constitution prohibits the government
from taking private property for public use without just compensation. U.S. Const. amend.
V; see also Minn. Const. art. 1, § 13 (providing that “[p]rivate property shall not be taken,
destroyed or damaged for public use without just compensation”). But the law
distinguishes between a “property interest” and “private property which is subject to the
constitutional provision of taking,” Hay v. City of Andover, 436 N.W.2d 800, 804 (Minn.
13
App. 1989); and it is well established that a license is a privilege and is not private property,
unless it is assignable and transferrable. See State by Mattson v. Saugen, 283 Minn. 402,
406, 169 N.W.2d 37, 40-41 (1969). Relator’s license is not transferrable. See Minn. R.
4668.0012, subp. 16 (2012); see also Minn. Stat. § 144A.472, subd. 5 (2014). Accordingly,
relator’s license is not private property and revocation of relator’s license is not reviewable
as a taking under the United States or Minnesota Constitutions. 4
II. The commissioner’s decision was not based on unlawful procedure and
contains no errors of law.
Relator argues that the commissioner’s decision was affected by an error of law and
based on unlawful procedure because the commissioner (1) abused its discretion by
imposing inappropriate sanctions, (2) erroneously admitted hearsay during the contested-
case hearing, (3) failed to consider mitigating circumstances, and (4) issued tags that were
unsupported by facts or legal authority. We address each argument in turn.
4
Relator further argues that the license-revocation action violates the Equal Protection
Clause of the Fourteenth Amendment. Relator failed to assert an equal-protection
argument in its principal brief and this issue is beyond the scope of the department’s
responsive brief. The Minnesota Rules of Civil Procedure authorize a relator to file a reply
brief, but “[t]he reply brief must be confined to new matter raised in the brief of the
respondent.” Minn. R. Civ. App. P. 128.02, subd. 3. “If an argument is raised in a reply
brief but not raised in an appellant’s main brief, and it exceeds the scope of the respondent’s
brief, it is not properly before this court and may be stricken from the reply brief.” Wood
v. Diamonds Sports Bar & Grill, Inc., 654 N.W.2d 704, 707 (Minn. App. 2002), review
denied (Minn. Feb. 26, 2003); see also Moorhead Econ. Dev. Auth. v. Anda, 789 N.W.2d
860, 887 (Minn. 2010) (noting that “raising issues for appeal in one’s reply brief is not
proper practice and is not to be permitted”) (quotation omitted). Relator forfeited its
constitutional equal-protection argument by failing to argue that constitutional violation in
its principal brief. Accordingly, this court grants the department’s motion to strike this
argument.
14
A. The commissioner did not abuse its discretion by imposing sanctions.
The statutes regulating licensing of home care providers authorize the department
to issue fines, see Minn. Stat. § 144A.45 (2014), or to revoke, suspend, or place conditional
terms on the license for noncompliance or “conduct detrimental to the welfare of the
consumer,” Minn. Stat. § 144A.46, subd. 3(a). It is within the discretion of the department
to decide whether to issue fines, to impose a conditional license, or to suspend or revoke a
provider’s license. See id. (“The commissioner may refuse to grant or renew a license,
may suspend or revoke a license, or may impose a conditional license for violation of
statutes or rules relating to home care services or for conduct detrimental to the welfare of
the consumer.”).
But relator argues that the department should have issued incremental fines, before
revoking and refusing to renew its licenses because: (1) Minn. Stat. § 14.02 (2014) requires
that the commissioner regulate home care providers in a manner that affords “maximum
flexibility [to] the regulated party and the agency in meeting [its] goals” and (2) an
informational guide published by the department suggests that the department must issue
incremental fines before initiating a revocation action. This argument misrepresents the
applicable standard for license revocation—“conduct detrimental to the welfare of the
consumer” or in violation of home care laws. This argument also implies that an
informational guide supersedes statutory law and administrative rules, and it ignores the
guide’s disclaimer, which explains that it is “not a replacement to the licensure rules or
statutes.” While the department has the authority to impose fines before initiating a license-
revocation action, the department avoided doing so in this case because it determined that
15
the imposition of fines would impose a substantial burden on relator, who was already
expending significant funds in an effort to come into compliance. The commissioner did
not abuse its discretion by imposing a conditional license, rather than monetary fines.
B. Hearsay is admissible in contested-case hearings.
Relator also incorrectly argues that the commissioner erroneously relied on
speculation and hearsay evidence. This argument is unsupported by legal authority.
In Minnesota, agencies may admit evidence in contested cases “which possesses
probative value commonly accepted by reasonable prudent persons in the conduct of their
affairs.” Minn. Stat. § 14.60, subd. 1 (2014). And an ALJ may “admit all evidence which
possesses probative value, including hearsay, if it is the type of evidence on which
reasonable, prudent persons are accustomed to rely in the conduct of their serious affairs.”
Minn. R. 1400.7300, subp. 1 (2014). While the Minnesota Supreme Court previously
expressed concern regarding the use of hearsay evidence at administrative hearings, the
supreme court clarified that it is “not prepared to say that hearsay evidence standing alone
may never support a disciplinary action against a licensed professional.” In re Wang, 441
N.W.2d 488, 495 (Minn. 1989). Thus, the ALJ did not err by considering hearsay evidence
at the contested-case hearing.
C. The commissioner is not required to consider mitigating factors in making its
determination.
Relator further asserts that the commissioner erred by failing to consider mitigating
factors and its “substantial compliance” before making its determination. As support for
this contention, relator cites the administrative agency’s decision In re Steiger, No. 5-0909-
16
10014-2, O.A.H., in which an ALJ held that a “licensee’s defenses to its actions and any
mitigating factors are important considerations in a licensing action.” When considering
“questions of law, [appellate] courts are not bound by the decision of the administrative
agency and need not defer to agency expertise.” State Farm Mut. Auto. Ins. Co. v. Metro.
Council, 854 N.W.2d 249, 262 (Minn. App. 2014) (quotation omitted), review denied
(Minn. Dec. 16, 2014). And the commissioner is not required to consider mitigating factors
and substantial compliance with written correction orders when applying the home-care-
licensing statute. See Minn. Stat. § 144A.46, subd. 3(a). Accordingly, this argument is
unavailing.
D. Tags 0030 and 0690 were properly issued.
Relator next argues that, because tags 0030 and 0690 were based on “deliberate
misapplication of rules and statutes,” the commissioner’s final decision is based on
unlawful procedure and contains errors of law. Tags 0030 and 0690 were issued for failing
to provide adequate wound care, noncompliance with a client’s individualized-care plan,
and inadequate documentation of the services provided to a client; the evidence supports
these tags. The lack of charting, failure to comply with the client’s individualized-care
plan, and grossly inadequate wound care violated home care laws, warranting the issuance
of tags 0030 and 0690. See Minn. Stat. § 144A.44, subd. 1(2); see also Minn. R.
4668.0810, subp. 6 (2012).
17
III. The commissioner’s final order revoking relator’s Class F license and
denying renewal of its Class A license is supported by substantial evidence
and is not arbitrary and capricious.
A. Substantial evidence supports the commissioner’s order revoking relator’s Class
F license and denying renewal of its Class A license.
Administrative-agency decisions “enjoy a presumption of correctness,” and
deference should be shown by courts to an agency’s expertise and its special knowledge in
its field of technical training, education and experience. In re Minn. Power, 838 N.W.2d
at 757 (quotation omitted). Appellate courts review “factual determinations made within
the scope of the agency’s statutory authority under the substantial evidence standard.” Id.
To uphold the commissioner’s factual determinations under the substantial-evidence
standard, this court must “determine whether the agency has adequately explained how it
derived its conclusion and whether that conclusion is reasonable on the basis of the record.”
Id. (quotation omitted).
On appeal, relator expressly challenges October 2011 tag 0030, March 2012 tag
0030, and June 2013 tags 0030 and 0690. After reviewing the record, we conclude that
substantial evidence exists to support the commissioner’s finding that the department
properly issued each challenged tag. Even if these tags were unsupported by substantial
evidence, the remaining unchallenged tags are supported by substantial evidence and
demonstrate the seriousness of the health and safety risks to relator’s clients. The
commissioner’s final order is supported by substantial evidence.
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B. The commissioner’s final order is not arbitrary or capricious.
“An agency’s decision is arbitrary or capricious if it represents the agency’s will
and not its judgment.” In re Review of 2005 Annual Automatic Adjustment of Charges for
all Elec. & Gas Utils., 768 N.W.2d 112, 118 (Minn. 2009). In essence, the decision is
arbitrary and capricious if the agency:
(a) relied on factors not intended by the legislature; (b) entirely
failed to consider an important aspect of the problem;
(c) offered an explanation that runs counter to the evidence; or
(d) the decision is so implausible that it could not be explained
as a difference in view of the result of the agency’s expertise.
Id. (quoting Citizens Advocating Responsible Dev. v. Kandiyohi County Bd., 713 N.W.2d
817, 832 (Minn. 2006)).
There is no evidence that the commissioner’s final decision was arbitrary or
capricious. The ALJ issued a well-reasoned 28-page recommendation, and the
commissioner carefully considered relator’s request for reconsideration. Contrary to
relator’s claim that the commissioner simply “rubber-stamped” the ALJ’s
recommendation, the record shows that the commissioner thoroughly reviewed the ALJ’s
recommendations and issued an equally well-reasoned 17-page decision. Ultimately, the
commissioner’s final decision was based on appropriate law and facts; it was not the
product of the commissioner’s will or judgment.
IV. The department’s revocation action is not moot.
Relator next argues that the department’s revocation action is moot because relator
“resolved” the violations noted in the correction orders, and has not received a correction
order after June 2013. Relator misapprehends the doctrine of mootness, which requires
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that courts only decide actual controversies. “The mootness doctrine is not a mechanical
rule that is automatically invoked whenever the underlying dispute between the parties is
settled or otherwise resolved.” Dean v. City of Winona, 868 N.W.2d 1, 4 (Minn. 2015).
“[A]n appeal is not moot, however, where the issue raised is capable of repetition yet
evades review or where collateral consequences attach to the judgment.” In re McCaskill,
603 N.W.2d 326, 327 (Minn. 1999) (quotation omitted). Thus, we will dismiss an appeal
as moot only “when a decision on the merits is no longer necessary or an award of effective
relief is no longer possible.” Dean, 868 N.W.2d at 4. There is an actual controversy here,
and a decision on the merits is necessary to conclude this lengthy litigation. Collateral
consequences also attached to the commissioner’s final decision—relator’s owners and
managers are ineligible for a Class F and a Class A license for five years from the date of
revocation. See Minn. Stat. § 144A.46, subd. 3(d). Accordingly, the matter is not moot.
V. The representative for the commissioner did not abuse her discretion by
refusing to remove herself as decision-maker.
Relator contends that the commissioner’s representative abused her discretion by
refusing to remove herself as decision-maker in this matter because the representative was
the decision-maker in a prior case involving relator’s owner. See Balenger, 2015 WL
7357192, at *1 (holding that the owner of Unity maltreated a vulnerable adult when she
hosed a client down with water from a garden hose). In Balenger, the commissioner’s
representative rejected the human-services judge’s recommendation that the department’s
finding should be reversed, and instead affirmed the department’s finding of maltreatment.
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Id. at *1. Relying on the commissioner’s representative’s decision in the maltreatment
matter, relator asserts that the decision-maker is biased.
Relator’s constitutional due-process rights include the right to an impartial decision-
maker, but a decision-maker’s prior involvement “in some aspects of the case will not
necessarily bar an official from acting as a decision-maker.” Chanhassen Chiropractic
Ctr., P.A. v. City of Chanhassen, 663 N.W.2d 559, 562 (Minn. App. 2003) (quotation
omitted), review denied (Minn. Aug. 5, 2003). Rather, “whether a hearing officer is
impartial is a fact-specific inquiry that depends on the context in which the appeal is heard.”
Id. at 562-63. But we recognize that “[t]here is a presumption of administrative regularity,
and the party claiming otherwise has the burden of proving a decision was reached
improperly.” In re Khan, 804 N.W.2d 132, 137 (Minn. App. 2011) (quotation omitted).
Relator cites no relevant legal authority or facts in support of its argument that the
decision-maker was biased. Indeed, relator cites only one case in support of its argument,
Withrow v. Larkin, 421 U.S. 35, 54-55, 95 S. Ct. 1456, 1468 (1975), and Larkin contradicts
relator’s argument. In Larkin, the United States Supreme Court held that an administrative
board did not violate an agency’s procedural due-process rights by adjudicating an issue
that it had previously investigated. Id. Moreover, relator failed to offer any factual record
from which this court may draw a reasonable inference of the decision-maker’s bias in the
present matter; instead, relator invites this court to speculate that bias exists. We decline
to do so.
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VI. The revocation of relator’s license is not contrary to public policy.
Finally, relator argues that the revocation action is against public policy because it
will: (1) encourage arbitrary enforcement of the statute, (2) diminish “incentives for
licensees to invest time and resources into improving operations,” and (3) decrease state
revenue. These arguments are best left to the legislature or the supreme court. See Morris
v. State, 765 N.W.2d 78, 85 (Minn. 2009) (“The development of . . . public policy [is]
better left to the legislature.”). “It is not for the [lower] courts to make, amend, or change
the statutory law, but only to apply it.” State v. Haywood, 886 N.W.2d 485, 491 (Minn.
2016) (quotation omitted). Accordingly, this argument is not properly before the court.
Affirmed; motion granted.
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