Sligo Creek Center v. United States Department of Health and Human Services

Background Sligo Creek Center operated a Medicare-participating nursing home in Montgomery County, Maryland. In 2015, health officials identified active tuberculosis cases among staff and residents. The facility administered skin tests and chest x-rays, finding latent tuberculosis infections in over two dozen residents. Under its own protocol and federal regulations, the facility was required to evaluate these residents for latent tuberculosis treatment. The facility failed to order or administer this treatment and did not document the rationale for non-treatment. The Department of Health and Human Services determined this noncompliance created immediate jeopardy and imposed per-day civil monetary penalties. The facility requested a hearing before an administrative law judge, which rejected its arguments. The Departmental Appeals Board affirmed the penalty, leading to this petition for review. The court’s reasoning The court applied the two-step analysis from SEC v. Jarkesy to determine if the Seventh Amendment right to a jury trial applied. The court assumed the first step was met but found the second step failed because the public rights exception applied. The court reasoned that the enforcement action was not a reclassified common law cause of action like fraud, but rather a novel statutory scheme created by Congress for the Medicare program. Unlike common law torts, the obligations here were untethered to actual injury and arose from voluntary participation in a government program. The court concluded that Congress could assign the adjudication of these public rights to the executive branch without violating the Seventh Amendment. The court also found the agency’s decision was supported by substantial evidence and not arbitrary or capricious. We hold the answer is no. And because we see no other basis to disturb the challenged decision here, we deny the petition for review. Sligo Creek Center v. United States Department of Health and Human Services, 25-1669 (4th Cir. June 5, 2026) What it means going forward Medicare-participating nursing homes facing civil monetary penalties for regulatory noncompliance cannot demand a jury trial in administrative proceedings, as such enforcement actions are considered public rights adjudications.