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Pikeville Questcare, LLC, et al v. Michael Poynter

March 4, 2013



The complaints in these two cases tell a tale of government corruption fit for Boss Hogg's administration. The plaintiffs, an ambulance company and its employees, allege that the defendants, members of a state licensing board, engaged in significant chicanery to drive them out of business. See No. 12-92, R. 18 at 9 ¶ 42.*fn1 While the plaintiffs may be correct that the board treated them unfairly, their claims are not cognizable under the federal Due Process Clause.


Questcare EMS provides ambulance services in four Kentucky counties: Floyd, Johnson, Magoffin, and Pike counties. See No. 12-92, R. 18 at 3 ¶ 9. It owns licenses to operate in those four counties as well as Martin County, though Questcare does not perform runs in Martin. See id. at 3--4 ¶¶ 11--15. Those state-issued licenses are necessary to operate an ambulance service in Kentucky, and the Kentucky Board of Emergency Medical Services ("KBEMS") issues and regulates those licenses. Id. at 1 ¶ 1. In doing so, KBEMS conducts random inspections of license holders to ensure that they are in compliance with safety regulations. Questcare had passed all its KBEMS inspections until April 20, 2012. Id. at 9 ¶¶ 43 44. According to Questcare's complaint, April 20 marked the beginning of a long, Kafkaesque encounter with KBEMS in which Questcare was subject to improper investigations, one-sided hearings, and a panel set on suspending its license.

Initial Inspections: On that day, KBEMS's Lewis Prewitt filed a complaint against Questcare.*fn2 Id. at ¶ 43.His complaint alleged that: (1) two Questcare employees' state certification had expired, and (2) Questcare had various, unspecified "vehicle identification irregularities." Id. at ¶ 46. Questcare terminated both uncertified employees the day of the inspection. Id. at ¶ 47. KBEMS conducted another unannounced inspection a month later. Id. at 10 ¶ 49. Based on these two inspections, KBEMS scheduled a Temporary Suspension Panel hearing for July 5 to determine whether to suspend Questcare's licenses, see id. at ¶ 53.

First Hearing: Questcare did not learn of the hearing until they received a letter from KBEMS on July 2, 2012. Id. Questcare asserts that this lack of notice violated Kentucky regulations requiring: (1) a written submission of identified regulatory violations, and (2) ten working days for the provider to prepare and submit a written plan to address the violations. Id. at 10 11 ¶¶ 50 56 (citing 202 Ky. Admin. Regs. 7:501 § 3(11)-(12)).

The panel convened on July 5, 2012, with Questcare management in attendance. The panel was comprised of: Michael Poynter, Joe Prewitt, Michael Gribbin, and Dr. Tim Price. See id. at 4 5 ¶¶ 17 20. The panel gave Questcare the opportunity to speak, questioned Questcare management about its service and vehicles, and heard testimony from KBEMS investigators who conducted the June 18 inspections. See No. 12-92, R. 18-1 at 2; No. 12-91, R. 18 at 11 ¶ 59. During its time for response, Questcare presented an oral version of its plan to correct the deficiencies it had not yet fixed. Questcare asserts that the lack of adequate notice hampered its preparation and presentation of its proposal. See No. 12-92, R. 18 at 11 ¶ 59. After hearing the evidence, the panel immediately suspended License No. 2023, which covered Questcare's service in Martin County. See No. 12-92, R. 18-2 at 3 ¶ 11. The panel withheld judgment on the remaining four licenses, deciding to reconvene the hearing on August 2, 2012, after conducting another inspection in late July. See No. 12-92, R. 18 at 11 12 ¶¶ 63 64.

That inspection occurred on July 24, 2012. No. 12-92, R. 18-2 at 4 ¶ 7. Investigators ordered Questcare to present fifteen vehicles for inspection at the community college in Prestonsburg, Kentucky. Id.; No. 12-92, R. 18 at 12 ¶ 64. Questcare asserts that this is a violation of Kentucky regulations, which require "on-site inspections." No. 12-92, R. 18 at 12 ¶ 65(quoting 202 Ky. Admin. Regs. 7:501 § 3(9)). Twelve of the fifteen ambulances passed free and clear, and two more were approved that day after minor repairs. No. 12-92, R. 18-2 at 4 ¶ 7. So Questcare had fourteen "operative ambulances" at the end of the July 24 inspection. Id. KBEMS compiled a "Statement of Deficiencies" from the inspection, but Questcare did not receive a list of those alleged violations before the panel's August 2 hearing. No. 12-92, R. 18 at 12 ¶¶ 66 67.

Second Hearing and Suspension Order: The panel reconvened as planned on August 2, 2012. Id. at 12 ¶¶ 67 68. While KBEMS presented evidence, No. 12-92, R. 18-2 at 4 ¶ 11, Questcare's members were not given an opportunity to speak, No. 12-92, R. 18 at 12 ¶ 70. The panel concluded the hearing at 12:30 p.m. and at 12:46 p.m. faxed a five-page "Order of Immediate Temporary Suspension" for Questcare's remaining four licenses. Id. at 12 ¶¶ 69 71. Questcare asserts that the panel must have predetermined the outcome of the August 2 hearing in order to issue a written order of that length in just sixteen minutes. Id. at 12 ¶¶ 71 72.

Despite the fact it appears to have been prepared in advance, the panel's emergency order provided only a slapdash justification for suspending Questcare's license. Kentucky law requires these orders to set forth findings of fact as well as conclusions of law. Ky. Rev. Stat. § 13B.125. And only a conclusion that suspending Questcare's licenses was "necessary in order to protect the public" can justify a temporary suspension. Id. § 311A.075(1) (substantive standard). To that end, the panel made three written findings of fact:

Multiple ambulances on those five licenses failed inspection on more than one occasion due to bald tires, failed air conditioning, failure of emergency lights, [and] lack of cleanliness . . . .

Four employees failed the continuing education audit.

One license has not had any runs conducted on it for one year despite the 24/7 requirement in regulation.

No. 12-92, R. 18-1 at 3. The panel then laid out a chain of reasoning that provided few links between these three findings and its conclusion that suspension was necessary to protect the public. Rather than explain how these particular conditions represented a danger to the public, it determined that these three findings showed "that the acts with which [Questcare] has been charged are serious and reasonably relate to the provisions governing the provision of EMS services." Id. From that determination, the panel concluded-with no further explanation-that it was "therefore necessary to immediately suspend [Questcare's] licensure in order to protect the public's health, safety or welfare." Id. This was the first time in more than seven years that a panel suspended a private emergency transporter's license in Eastern Kentucky. No. 12-92, R. 18 at 11 ¶ 58.

Administrative Appeal: Questcare filed an appeal, which was heard on August 17, 2012. Id. at 14 ¶ 82. Hearing officer Stuart Cobb reviewed the evidence presented to the panel and heard testimony from panel member Timothy Price, M.D. about his decision. Id. at 14 ¶¶ 82 85. Cobb ultimately found that, for Questcare's four active licenses, there was no "substantial evidence of a violation of law which constitutes an immediate danger to the public health, safety or welfare." No. 12-92, R. 18-2 at 6--7 ¶¶ 19 23. He stressed that Questcare had fourteen "roadworthy ambulances," and that there was "no substantial evidence" that Questcare: (1) could not meet its obligations with those fourteen ambulances, or (2) ever transported patients in deficient ambulances. Id. at 6 ¶ 20. Cobb also pointed out that Questcare had taken steps to ensure its employees' certification status would stay up to date, and that "prior use of uncertified employees in violation of the law does not constitute an immediate danger to the public." Id. at 6 ¶ 22. He did, however, affirm the panel's decision to suspend Questcare's license for Martin County. Id. at 6--7 ¶ 23. Questcare points out that they do not make ambulance runs in Martin County. No. 12-92, R. 16 at 6.

Alleged Improprieties: According to Questcare, numerous improprieties by KBEMS and the panel members suggest that the August 2 decision was not made in good faith. See No. 12-92, R. 18. Some have already been mentioned: (1) twice failing to give Questcare adequate notice of its alleged violations, id. at 10 11 ¶¶ 50 56, 12 ¶ 67; (2) violating Kentucky law's on-site inspection requirement, id. at 12 ¶ 65; (3) denying Questcare an opportunity to speak at the August 2 hearing, id. at 12 ¶ 70; and (4) predetermining the outcome of Questcare's case before the August 2 hearing, id. at 12 ¶¶ 69 72. Questcare also alleges that: (5) Prior to the panel hearing, two panel members told Questcare's president that they believed "there were too many private ambulance companies in Eastern Kentucky." Id. at 14 ¶ 80. (6) Most of the deficiencies that the panel cited were fixed before the August 2 hearing, and none posed an immediate threat to "the health or safety of the public." Id. at 12 ¶ 68. (7) The panel did not connect specific violations to particular licenses, even though ambulances are assigned to specific licenses and none of the Floyd County ambulances had any alleged deficiencies. Id. at 13 ¶¶ 73 74. (8) The panel never addressed Questcare's proposal for correcting its mistakes. Id. at 11 ¶ 62. (9) Dr. Price testified at the appeal hearing that he voted to suspend Questcare's license based on allegations that were not in the panel's findings of fact and had no substantial evidence to support them. Id. at 14, ¶¶ 83 84; No. 12-92, R. 18-2 at 5 ¶¶ 13 15.

The plaintiffs filed two suits in federal court following the panel's August 5 temporary suspension order. The first, brought by Questcare and its four subsidiary companies (collectively referred to as "Questcare"), alleges that the four panel members violated their procedural and substantive due process rights under the Fourteenth Amendment. See No. 12-92, R. 18 at 15 ¶ 88. The second, brought by four Questcare employees as representatives of a class, alleges that the same three panel members deprived them of their procedural and substantive due process rights under the Fourteenth Amendment. See No. 12-93, R. 18 at 13 14 ¶¶ 79 80. The defendants moved to dismiss both complaints, No. 12-92, R. 8; No. 12-93, R. 7.


I.Motions to Amend the Complaints

The Court must initially address the plaintiffs' motions for leave to amend their complaints, which were filed in response to the defendants' motions to dismiss. No. 12-92, R. 17; No. 12-93, R. 17. Because there is no reason to believe that the motions are improperly motivated or will prejudice the defendants, the plaintiffs must be given leave to amend.

The window has closed on the plaintiffs' opportunity to amend their complaints as a matter of right. The plaintiffs filed their motions to amend sixty-nine days after serving their complaints and forty-five days after receiving the defendants' motions to dismiss. See No. 12-92, R. 1, R. 8, R. 17; No. 12-93, R. 1, R. 7, R. 17. Thus, the twenty-one-day period for amending their complaints as a matter of right had lapsed. See Fed. R. Civ. P. 15(a)(1)(A), (B). While the parties did agree to extend the plaintiffs' deadline to file their responses to the motions to dismiss twice, those motions made no mention of the deadline to amend their complaints. See No. 12-92, R. 10, R. 11; No. 12-93, R. 8, R. 10. The deadlines to respond to a motion to dismiss and to amend a complaint are separate ...

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