AMERICARE EMERGENCY MEDICAL SERVICE, INC. VS. THE CITY OF ORANGE TOWNSHIP (L-2397-19, ESSEX COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0117-19T4
AMERICARE EMERGENCY
MEDICAL SERVICE, INC.,
Plaintiff-Respondent,
v.
THE CITY OF ORANGE TOWNSHIP,
BELL MEDICAL TRANSPORTATION,
TOWNSHIP OF IRVINGTON, and
TOWNSHIP OF SOUTH ORANGE,
Defendants,
and
STATE OF NEW JERSEY
DEPARTMENT OF HEALTH,
OFFICE OF EMERGENCY
MEDICAL SEVICES, JAMES
SWEENY, SCOTT PHELPS, and
ERIC HICKEN,
Defendants-Appellants,
______________________________________
Argued telephonically April 1, 2020 –
Decided May 27, 2020
Before Judges Whipple, Gooden Brown, and Mawla. 1
1
Judge Mawla did not participate in oral argument. He joins the opinion with
counsel's consent. R. 2:13-2(b).
On appeal from an interlocutory order of the Superior
Court of New Jersey, Law Division, Essex County,
Docket No. L-2397-19.
Stephen J. Slocum, Deputy Attorney General, argued
the cause for appellants (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, of counsel;
Deborah E. Shane-Held and Patrick Jhoo, Deputy
Attorneys Generals, on the briefs).
Shay S. Deshpande argued the cause for respondent
(Franzblau Dratch, PC, attorney; Shay S. Deshpande,
of counsel and on the brief; Daniel A. Lebersfeld, on
the brief).
The opinion of the court was delivered by
WHIPPLE, J.A.D.
On leave granted, the New Jersey Department of Health (Department)
Office of Emergency Medical Services (OEMS), appeals from a July 16, 2019
Law Division order lifting the summary suspension of plaintiff AmeriCare
Emergency Medical Service, Inc.'s (AmeriCare), license to operate as an
emergency medical service provider and permitting an action to proceed under
the New Jersey Civil Rights Act, N.J.S.A. 10:6-1 to -2 (CRA). Under the CRA,
"the party alleging a claim must show a violation of a substantive right or that
someone 'acting under color of law' interfered with or attempted to interfere with a
substantive right." State v. Quaker Valley Farms, LLC, 235 N.J. 37, 64 (2018).
Since AmeriCare did not make that showing, we reverse.
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AmeriCare, an entity that provides emergency transportation services, is
licensed to operate mobility assistance vehicles (MAV), basic life support
vehicles (BLS), and specialty care transport unit vehicles (SCTU). AmeriCare
operates six BLS/SCTU vehicles and one MAV vehicle. OEMS, through the
Department, has the legislative authority through its rules and regulations to
grant, renew, and revoke licenses to entities engaged in performing emergency
medical transportation services. OEMS also has the authority to issue summary
suspensions of licenses issued to entities that conduct such services.
In June 2018, OEMS conducted an audit of AmeriCare's overall
compliance with applicable regulations as well as an inspection of the
emergency vehicles under their operation. OEMS filed a summary suspension
of AmeriCare's license to operate and initiated revocation proceedings asserting
AmeriCare engaged in a variety of regulatory violations relating to specific
vehicles and the company's overall operation such as the credentialing of
employees, record keeping, and the maintenance and security of patient-related
records. In February 2019, the summary suspension and proposed revocation
was withdrawn without a formal enforcement consequence imposed.
On May 30, 2019, OEMS received a complaint that doors on an
AmeriCare vehicle were falling off their hinges, oxygen cylinders were empty
due to system leaks, and wheels were falling off an AmeriCare ambulance while
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in use. The complainant informed OEMS that those same vehicles were
responsible for providing emergency medical services for the City of Irvington
and Village of South Orange. At the time of the initial complaint, one of
AmeriCare's BLS/SCTU vehicles, Vehicle 5261, was deemed out of service by
the Department for having an inoperable front emergency grill light, missing
protective jackets, and a missing fire extinguisher inspection tag.
In response, on May 31, 2019, OEMS conducted an unannounced
inspection on two of AmeriCare's BLS/SCTU vehicles, Vehicles 5256 and 5258.
The inspectors found serious safety concerns and the vehicles were deemed out
of service. Vehicle 5256 had expired vehicle credentials, a loose rear step, an
unsecure oxygen retention system, a balding front tire, an improperly attached
side door, a hole in the passenger seat making it pervious to blood borne
pathogens, and a map light with exposed wires. OEMS also found similar
violations with Vehicle 5258 including a balding front tire, unsecured portable
oxygen, a missing front license plate, a hole in the arm rest of the front passenger
seat making it pervious to blood borne pathogens, a dashboard radio which falls
out while driving, and an unsanitary portable suction unit.
These violations prompted OEMS to conduct an unannounced audit of
AmeriCare on June 3, 2019. The investigators claimed they visited AmeriCare's
principal place of business, a location in Dumont, but found no AmeriCare
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official. The investigators visited Americare's location in Irvington, where they
found Vehicle 5259, which they inspected and placed out of service after finding
serious safety concerns. After the inspection, OEMS scheduled a meeting with
an AmeriCare employee, but the meeting did not take place because the
employee never arrived.
On June 4, 2019, OEMS, unable to reach representatives of AmeriCare,
placed AmeriCare's remaining vehicles out of service to ensure public health,
safety and welfare. OEMS also contacted the appropriate dispatch centers as
well as both the City of Irvington and the Village of South Orange. On June 5,
2019, South Orange Village terminated its contract with AmeriCare.
After learning OEMS was contacting AmeriCare's clients, Fabrizio
Bivona, AmeriCare's founder and CEO, contacted OEMS and arranged for the
re-inspection of its vehicles. On June 10 and 12, 2019, additional inspections
were performed and Vehicles 5261, 5256, and 5259 were placed back into
service after inspection. The remaining vehicles were not restored at that time.
AmeriCare argues that OEMS refused to inspect and pass the remaining vehicles
despite failing to identify any violations. AmeriCare further asserts that an
OEMS representative spoke with a city attorney for Orange Township noting
that over fifty percent of AmeriCare's vehicles remained out of service.
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Despite three of the vehicles being reinstated, on June 18, 2019, the
Department summarily suspended AmeriCare's license to operate emergency
medical transportation services. The suspension letter contained a detailed
history of the inspection of AmeriCare's vehicles, as well as a description of the
other violations OEMS found during the investigation.
Ultimately, the summary suspension forced AmeriCare to stop operating
all vehicles and OEMS notified AmeriCare that it had the "right to apply to the
Commissioner of the [Department] for emergency relief to contest this summary
suspension," and that "failure to submit a request for a hearing within [thirty]
days from the date of this Notice shall result in the continued summary
suspension of your . . . provider licenses . . . ." AmeriCare asserts it did not
receive the summary suspension letter until a week after the letter was finalized.
Rather than file for emergent relief, AmeriCare filed an order to show
cause for injunctive relief and an amended complaint in lieu of prerogative writs
in the Law Division seeking to add OEMS and Scott Phelps, Director of OEMS,
Eric Hicken, Administrator of OEMS, and James Sweeney, Chief Investigator,
as defendants in its prerogative writs complaint. AmeriCare was already
involved in litigation which alleged public bidding violations against the City of
Orange and Bell Medical Transportation (Bell). In its bid litigation against the
City of Orange and Bell, AmeriCare alleged that in response to a request by the
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City of Orange to submit sealed bids for a contract to perform emergency
medical services, AmeriCare submitted the lowest bid but the contract was
awarded to Bell. The City of Orange and AmeriCare were allegedly in
settlement negotiations when, according to AmeriCare, OEMS investigator
Sweeney began inspecting its vehicles and OEMS took two vehicles out of
service. AmeriCare further asserted OEMS advised its clients that AmeriCare
was out of business, which ultimately resulted in the loss of municipal contracts.
AmeriCare asserts OEMS wrongfully notified its clients of AmeriCare's
suspension before it notified AmeriCare and OEMS's actions were invalid and
designed to interfere with its business in violation of its civil rights under the
CRA and 42 U.S.C. § 1983.
On July 1, 2019, the Law Division judge heard oral argument on the order
to show cause and motion for injunctive relief. The court found it had
jurisdiction to issue the relief sought and ordered that the summary suspension
be lifted to permit AmeriCare to operate the vehicles that were re-inspected and
re-authorized by OEMS, provided they remained in compliance with the
applicable legal standards. The court also ordered OEMS to re-inspect
AmeriCare's remaining vehicles which remained out of service. The court
rejected OEMS's argument that AmeriCare was required to exhaust its
administrative remedies and on July 16, 2019, entered an order memorializing
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its July 2, 2019 decision. OEMS sought a stay of the trial court's order on July
17, 2019, and the application was denied. On July 29, 2019, OEMS moved for
leave to appeal and for a stay of the trial court’s July 16 order, which we granted.
This appeal followed.
I.
On appeal, OEMS asserts we should vacate the trial court's July 16 order
for the following reasons: 1) plaintiff failed to exhaust its administrative
remedies; 2) even if plaintiff were not required to exhaust its administrative
remedies, the trial court lacked jurisdiction to consider plaintiff's claims because
review of agency action lies with the Appellate Division; and 3) plaintiff's
claims lack merit. At the outset, we first address whether the Law Division had
subject matter jurisdiction to adjudicate AmeriCare's complaint. The
determination of whether subject matter jurisdiction exists is a legal question,
which we review de novo. Santiago v. N.Y. & N.J. Port Auth., 429 N.J. Super.
150, 156 (App. Div. 2012).
OEMS asserts the trial court erroneously concluded AmeriCare was not
required to exhaust its administrative remedies and could pursue relief from
OEMS's regulatory decisions in the Law Division. OEMS argues that no matter
how AmeriCare "styled its claims" the substance of those claims are not civil
rights violations but are substantive challenges to the summary suspension itself
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and that the trial court lacks the expertise to consider the summary suspension
as the OEMS's licensing function falls within its technical expertise.
The CRA provides, in pertinent part, a remedy against private and public
defendants for a person who has
been deprived of any substantive due process or equal
protection rights, privileges or immunities secured by
the Constitution or laws of the United States, or any
substantive rights, privileges or immunities secured by
the Constitution or laws of this State, or whose exercise
or enjoyment of those substantive rights, privileges or
immunities has been interfered with or attempted to be
interfered with, by threats, intimidation or coercion by
a person acting under color of law . . . .
[N.J.S.A. 10:6-2(c).]
The CRA further provides that actions "may be filed in Superior Court. Upon
application of any party, a jury trial shall be directed." N.J.S.A. 10:6 -2(d).
"[T]he CRA is facially silent about any other procedural requirement that a
plaintiff must satisfy in order to bring a CRA cause of action." Owens v. Feigin,
194 N.J. 607, 611 (2008).
In Owens, 194 N.J. at 611-14, the Court examined the legislative history
and the plain language of the CRA to determine whether the Legislature intended
for the Tort Claim Act's (TCA), N.J.S.A. 59:1-1 to -12-3, notice-of-claim
requirement to apply to CRA causes of action. There, Owens timely filed a
notice-of-claims to public entities and employees that were named defendants
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but did not file a notice-of-claim for one defendant, Feigin, the county medical
examiner. Id. at 610. The Court held that the notice requirement did not apply
to CRA claims as neither the plain language of the CRA nor its legislative
history contain any indication that the Legislature intended the TCA's notice
requirement to "serve as a prerequisite to a CRA cause of action." Id. at 613-
14. In reaching this conclusion, the Court noted the "broad remedial purpose of
the CRA" supports the conclusion that the Legislature did not condition "the
rectifying of an infringement on an individual's vital constitutional rights," on
the satisfaction of the notice requirement. Id. at 614.
The United States Supreme Court also recognized the need to analyze
legislative intent in determining whether a procedural scheme, such as the
exhaustion of administrative remedies, is a prerequisite to bringing a claim
under a federal civil rights statute. In Patsy v. Bd. of Regents of Fla., 457 U.S.
496, 516 (1982), the Court held the exhaustion of state administrative remedies
is not a prerequisite to bringing a 42 U.S.C. § 1983 claim. There, the Court
recognized Congress intended the Civil Rights Act of 1871, the precursor to §
1983, to "'open the doors of the United States courts' to individuals who were
threatened with, or who had suffered, the deprivation of constitutional rights
. . . and to provide these individuals immediate access to the federal courts
notwithstanding any provision of state law to the contrary . . . ." Id. at 504.
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(citations omitted). The Court also recognized that although the exhaustion
requirement would further various policies such as lessening the burden on
federal courts and enabling the state administrative agency, with expertise in the
area, to enlighten the federal court's decision, these policy considerations alone
cannot justify judicially imposed exhaustion unless the exhaustion is consistent
with the legislative intent. Id. at 512-13.
Based on our review, we do not find the trial court erred in concluding
that plaintiff was not required to exhaust its administrative remedies before
bringing a claim under the CRA in the Law Division. Like the Court in Patsy,
we decline to read into the CRA an exhaustion of remedies requirement as doing
so would be inconsistent with legislative intent. See Tumpson v. Farina, 218
N.J. 450, 474 (2014) (noting the interpretation of 42 U.S.C. § 1983 claims may
provide guidance in construing our CRA); Owens, 194 N.J. at 615 (noting the
CRA serves a "broad remedial purpose.").
However, while the exhaustion requirement is not a prerequisite to
bringing a CRA claim in the Law Division, we have also refused to allow
plaintiffs to avoid the exhaustion of administrative remedies when their claims
amount to nothing more than a collateral attack of a State administrative
determination. In Beaver v. Magellan Health Servs., Inc., 433 N.J. Super. 430,
432-34 (App. Div. 2013), the plaintiff, an insured former public employee, sued
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the New Jersey Health Benefits Program and a medical provider after his son's
treatment at a substance abuse facility was denied. Beaver appealed the decision
and the matter was transferred to the Office of Administrative Law for an
evidentiary hearing. Id. at 434-35. The Administrative Law Judge (ALJ)
recommended denial of the claim and the State Health Benefits Commission
(SHBC) adopted the ALJ's findings and conclusions. Id. at 435-36.
Beaver later filed a complaint in the Law Division alleging breach of
contract, breach of fiduciary duty, unjust enrichment, and a violation of the New
Jersey Consumer Fraud Act. Id. at 436. The trial judge dismissed those claims
for lack of subject matter jurisdiction and plaintiff appealed. Id. at 437. On
appeal, Beaver asserted his complaint did not "challenge the SHBC's final
administrative action, but rather is a separate action at law alleging statutory and
common law causes of action . . . ." Id. at 437. He contended the SHBC action
was irrelevant to the asserted causes of action and the defendants argued that the
language in Beaver's complaint illustrates that, regardless of the claims asserted,
he was simply seeking coverage for his son's treatment, and that reversal of the
SHBC's determination was essential to his complaint. Id. at 439.
We explained that an examination of the causes of action set forth in the
complaint is pivotal to a determination of jurisdiction. Ibid. Affirming the
dismissal, we said:
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[P]laintiff has explicitly stated that his complaint is
brought to recover "unpaid benefits" under the
Program. Accordingly, to recover, plaintiff must
necessarily secure a reversal of the SHBC final agency
action upholding the denial of those same benefits.
Plaintiff cannot avoid this obvious conclusion by
cloaking his claims under the mantle of contract and
tort.
....
[S]tripped to their barest essentials, plaintiff's claims,
sounding in tort and contract, amount to no more than
a collateral challenge to the . . . SHBC final agency
action upholding the limitation of coverage for
plaintiff's health benefit claims. Indeed, absent an
attack on that final agency action, plaintiff's tort and
contract claims are patently without basis in fact or law.
....
Accordingly, plaintiff's complaint in the Law Division
must be dismissed for lack of jurisdiction. To hold
otherwise would permit plaintiff to collaterally attack a
State administrative determination in the Law Division.
[Id. at 441-44.]
In this case, jurisdiction hinges on whether AmeriCare has a colorable
CRA claim and if so, the nature of the CRA claim. The Legislature adopted the
CRA "for the broad purpose of assuring a state law cause of action for violations
of state and federal constitutional rights and to fill any gaps in state statutory
anti-discrimination protection." Owens, 194 N.J. at 611. As noted above, the
CRA is modeled after the federal Civil Rights Act, 42 U.S.C. § 1983, and
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provides a vessel for "vindicating substantive rights and is not a source of rights
itself." Gormley v. Wood-El, 218 N.J. 72, 98 (2014).
The elements of a substantive due process claim under the CRA are the
same as the statute it was modeled after, 42 U.S.C. § 1983. Rezem Family
Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103, 115 (App. Div. 2011).
The first step "is to identify the state actor, 'the person acting under the color of
law,' that has caused the alleged deprivation." Id. at 114 (quoting Rivkin v.
Dover Twp. Rent Leveling Bd., 143 N.J. 352, 363 (1996)). Next the party must
"identify a right, privilege or immunity secured to the claimant" by the
constitutions of the state and federal governments or by state and federal laws.
Ibid. (internal quotations omitted) (citations omitted). Therefore, to bring a
cause of action under the CRA, the second element requires a party to allege a
specific constitutional violation. Our case law is clear that an individual may
prevail on a claim under the CRA only when: (1) the plaintiff has actually been
deprived of a right; or (2) one acting under color of law has threatened,
intimidated, or coerced a person or attempted to do so, in such a way that it
interferes with the person's exercise or enjoyment of his rights. Felicioni v.
Admin. Office of Courts, 404 N.J. Super. 382, 400 (App. Div. 2008).
In its complaint, AmeriCare's first assertion is OEMS violated N.J.S.A. §
10:6-2 by, among other things, arranging for questionable inspections of its
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ambulances, giving failing grades based on insignificant and non-material
violations, failing to inspect all vehicles, refusing to perform re-inspections, and
ultimately suspending AmeriCare despite three of its vehicles being placed back
into service just days prior to the suspension. The very essence of these claims
is a collateral attack on agency action.
Although not expressly stated in the complaint, even if AmeriCare alleged
it was deprived of its right to an occupational license, such a deprivation does
not rise to the level of a substantive due process violation. "[A]n occupational
license is in the nature of a property right." Santaniello v. N.J. Dept't of Health
& Sr. Servs., 416 N.J. Super. 445, 460 (App. Div. 2010) (citation and internal
quotations omitted). However, "[t]here is no protectable property right in
continuing or future [licensure] since any existing property interest in the
[license] is extinguished upon its expiration." Id. at 459. Therefore,
"constitutional due process protects against only the improper suspension or
revocation of a license; it does not protect against a licensing board's summary
refusal to reinstate a license that has been revoked." Id. at 460 (citation omitted).
Accordingly, AmeriCare would only be able to challenge the procedural process,
i.e. the improper suspension or revocation. Here, AmeriCare was entitled to
emergency relief by the Commissioner of the Department for review of OEMS's
period of suspension and was so advised. Since procedural due process claims
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cannot be brought under the CRA, 2 plaintiff cannot proceed under this theory.
AmeriCare was offered the process it was due.
II.
AmeriCare's second assertion is the "Individual Defendants" further
violated 42 U.S.C. § 1983 by making statements containing confidential and
non-public information to municipal officials, which resulted in AmeriCare
being denied contracts with certain municipalities and for existing contracts to
be rescinded or terminated. The second assertion, in general terms, alleges the
Department's unethical conduct is a violation of AmeriCare's "due process and
civil rights."
We decline to offer an opinion on the record before us whether a cause of
action based on these allegations has validity. We do recognize, however, the
allegations inescapably require the fact-finder to determine the validity of
OEMS's summary suspension, a role that falls under the exclusive province of
the Department. To prove that OEMS unconstitutionally harmed its business,
AmeriCare would be required to attack the agency's determination that it should
no longer be licensed. Without the right to operate as a licensed entity, the
above-referenced claims are rendered moot. Thus, as we stated in Beaver, 433
2
The CRA was specifically amended to limit the legislation's scope to
substantive due process.
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N.J. Super. at 441, "to recover, plaintiff must necessarily secure a reversal of the
. . . agency['s] action."
Reversed. We do not retain jurisdiction.
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