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Odhuno v. Reed's Cove Health and Rehabilitation, LLC

United States District Court, D. Kansas

December 14, 2018




         Plaintiff John Paul Odhuno was employed as a certified nurse aide (“CNA”) at a long-term care facility owned by Defendant Reed's Cove Health and Rehabilitation, LLC d/b/a Avita (“Avita”). In late July 2014, the Kansas Department for Aging and Disability Services (“KDADS”) investigated the facility after receiving an anonymous tip of alleged resident abuse. During the investigation, Avita terminated Odhuno's employment. Odhuno now asserts claims against KDADS Secretary Tim Keck and five KDADS employees involved in the investigation: Audrey Sunderraj, Carol Shiffelbein, Christan Rose, Teresa Fortney, and Treva Banuelos (the “KDADS employees”). He alleges that they violated his Fourteenth Amendment rights to due process and equal protection. Additionally, he alleges that the KDADS employees committed the tort of outrage under Kansas law.

         This matter comes before the Court on Defendants' Motion for Summary Judgment (Doc. 105). The KDADS employees assert the defense of qualified immunity, and Defendant Keck asserts that he is entitled to sovereign immunity under the Eleventh Amendment. In response to the motion, Odhuno decided not to oppose the summary judgment motion of Defendants Schiffelbein, Fortney, and Banuelos and filed a response only as to the summary judgment motion of Defendants Rose, Sunderraj, and Keck.[1] As explained in more detail below, the Court concludes that Defendants Rose and Sunderraj are not entitled to qualified immunity and that Defendant Keck is not entitled to sovereign immunity. Therefore, the Court grants in part and denies in part Defendants' motion.

         I. Factual and Procedural Background

         A. KDADS Relationship with Centers for Medicaid and Medicare Services (“CMS”)

         Under 42 U.S.C.A. § 1395a, the State of Kansas entered into an agreement (the “Agreement”) with the Secretary of Health and Human Services (the “Secretary”) to determine whether a provider or supplier meets specific standards of participation in the federal Medicare and Medicaid programs. The Agreement provides that the State of Kansas, through a KDADS surveyor, is required under § 1864(a) of the Social Security Act to survey providers or suppliers in Kansas that are participating in Medicare and/or Medicaid services. In addition, the Agreement defines the role of the surveyors as federal contractors surveying on behalf of the Secretary. The surveyors are required to make reports in the form and containing the information required by the Secretary. To complete the surveys, they generally follow forms created by CMS or Health and Human Services.

         Long-term care facilities, such as Avita, must follow federal conditions of participation to obtain coverage under the Medicare program.[2] Included in these conditions are rules governing the reporting and investigation of resident abuse.[3] Federal regulations define “abuse” as “the willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish.”[4] If there is an allegation of resident abuse, a facility must (1) immediately report the allegation to “other officials in accordance with State law through established procedures”;[5] (2) thoroughly investigate all allegations of abuse, prevent further abuse while the investigation is in progress, and report the investigation findings within five days to the appropriate state officials;[6] and (3) immediately report to KDADS if there is “reasonable cause to believe that a resident is being or has been abused, neglected or exploited.”[7]

         KDADS receives reports of alleged abuse through a hotline managed by the agency.[8]KDADS will review the report and conduct a survey to determine whether the long-term care facility meets the conditions of participation in the Medicare program.[9] It also makes recommendations to CMS, which will determine whether the long-term care facility is eligible to participate in the Medicare program.[10]

         The final results of the survey and CMS' determination are provided to the long-term care facility.[11] If the facility is not in compliance with the conditions of the Medicare program, KDADS will provide a description of the specific deficiencies that resulted in that determination.[12] The long-term care facility may appeal the survey findings through the process set forth in the federal Medicare regulations.[13]

         If the KDADS investigation substantiates that a CNA abused a resident, the investigation is forwarded to the KDADS legal department.[14] In this situation, the KDADS surveyor is required to fill in a particular box on the “complaint processing form, ” which is sent to KDADS headquarters with all documents gathered during the investigation.[15] The KDADS legal department then determines whether to initiate proceedings against the CNA and place a prohibition on the Kansas Nurse Aide Registry. After the investigation is completed, and if a finding of abuse, neglect, or exploitation is made, a Notice of Action is sent to the CNA.[16] This Notice of Action may be appealed under the Kansas Administrative Procedure Act.[17] If a CNA decides not to appeal the Notice of Action or if after an appeal the finding of abuse, neglect, or exploitation is upheld, then the finding of abuse is placed on the KDADS website[18] and a prohibition against employment will be placed on the Kansas Nurse Aide Registry.[19] Prospective employers must review the online CNA Registry before employing a CNA.

         B. Complaint Investigation at Avita

         Odhuno is a black male who is originally from Kenya. Odhuno was employed as a CNA at Avita-which is operated by Defendant Axiom Healthcare Services, LLC (“Axiom”). On July 31, 2014, KDADS began a complaint survey at Avita based on an anonymous complaint made to the KDADS hotline. The complaint stated that Avita failed to investigate and report an allegation of resident abuse purportedly committed by a black male nurse.

         One of the KDADS surveyors was Defendant Rose. On the first day of the investigation, Rose spoke with the resident regarding the alleged abuse. She took notes and prepared a handwritten statement for the resident to sign, which states in part:

It hasn't happened for a while but it has gone on for the last couple of months, since the Spring. It is a black man and he tells me he is a nurse. My son stayed all night not too long ago and the black man tried to come in then, but I think it scared him away when he saw my son. For 3 days after that, he stayed away. . . . He would come in my room late at night without knocking and say he was trying to see if my pants were wet and touch my bottom. I'm not making it sounds as bad as it actually was. One time on a weekend when there wasn't anyone else around, on a holiday, he took me outside and rolled me around on the ground. I don't know what he was trying to do. I hit him on the arms and it made him mad and he finally gave up. He has come back and tried to do it again and I have fought him off. . . . It has gone on for a couple of months, and there were a lot of times he came in and messed with me. I was very scared every time I saw him. I have lost so much sleep over this.

         Rose admits that there was no concrete evidence that the abuse occurred and that she did not find any evidence during her investigation that someone rolled the resident on the ground outside the facility. Rose testified, however, that the allegation was substantiated because “[r]egardless of whether abuse actually happened or not, [the resident] suffered emotional distress because of the facility's failure to protect her after she made an allegation of abuse. That substantiates the allegation.”

         Rose interviewed the resident's son, John Bertelson, during the investigation by phone. Bertelson told Rose that he had not seen any physical evidence of abuse; he had only heard his mother make the allegations. Bertelson further stated that his mother suffered from some memory loss, but that it had improved a lot and that she seemed to be the person he knew her to be. He also said that he had spoken with her several times about the incident and that the resident's story was always the same. Rose testified, however, that even if Bertelson had told Rose he didn't believe abuse had occurred, it would not have made a difference in Rose's investigation or findings. According to Rose, the facility would still have been cited for the failure to protect the resident after an allegation was made.

         Rose had several phone conversations on July 31 with Defendant Sunderraj, who was the Director of Survey & Certification for KDADS. Sunderraj was not Rose's direct supervisor, but because Rose's immediate supervisor was unavailable that day, she discussed the investigation with Sunderraj instead. At some point, Rose and Sunderraj discussed whether to place the facility in “immediate jeopardy.” As defined in the regulations, the term “immediate jeopardy” means “a situation in which the provider's . . . non-compliance with one or more Medicare requirements, conditions of participation, conditions for coverage or certification has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident or patient.”[20] Ultimately, Sunderraj determined that Avita should be in “immediate jeopardy” status and advised Rose to inform its administrator of the news.

         Rose advised Avita's administrator of the immediate jeopardy status around 3:30 p.m. on July 31 by reading out loud a “Prepared Warning Statement.” Under KDADS protocol, this statement is to be read whenever an alleged perpetrator poses a continuing risk of abuse to the complaining resident and/or other residents. The Prepared Warning Statement states as follows:

         Prepared Warning Statement

The prepared warning statement is read to a facility if and when an alleged perpetrator is still working in the facility. This statement is read privately to the administrator only after:
1. the surveyor has investigated and gathered enough evidence to strongly support a finding of abuse, neglect or exploitation by the AP
2. discussion with and concurrence of the Regional Manager
Once the surveyor has discussed findings with the Regional Manager, the following statement should be read to the administrator. The surveyor needs to document the time & date the statement was read, as well as the names of those persons present.
“As a result of my investigation, I am informing you that there may be a risk to the residents as a result of (alleged perpetrator's name) presence in your facility. You need to investigate (or continue with your investigation) and determine whether (alleged perpetrator's name) poses a threat to the victim or other residents in the facility. Adult care home regulations specifically require that the facility do whatever is necessary to prevent potential abuse, neglect, and exploitation while investigations are in progress.”

         When Rose read this statement to Avita, she identified Ohduno as the alleged perpetrator.

         After the immediate jeopardy announcement, Rose discussed with Avita's administrator, Vanessa Underwood, its plan to abate immediate jeopardy status. Initially, Underwood was only going to suspend all black male nurses, but when Rose questioned her, asking “just nurses?” Underwood decided to suspend all black male employees, including a cook, regardless of whether they ever provided any care to the resident. The suspensions were lifted the next day (August 1) after Avita investigated and determined that the alleged abuse did not occur. KDADS knew of the reinstatements by the end of the day on August 1.

         On August 4, Sunderraj received and reviewed four emails with voluminous attachments from Underwood. Those emails and attachments contained the facility's investigation of the resident's allegations after immediate jeopardy was announced. Avita's investigation revealed that no abuse occurred.

         On August 5, Rose and Sunderraj discussed Avita's Amended Plan of Correction requesting that KDADS abate immediate jeopardy status. The Amended Plan of Correction showed that Avita had reassigned all male staff, including Odhuno, so that they would not work in the resident's unit or provide her care due to her stated preference for personal care only by female staff.

         That same day, at approximately 4:22 p.m., a meeting was held at Avita in which Rose appeared in person and Sunderraj appeared by telephone. Representatives of Avita and Axiom also attended. During the meeting, Rose and Sunderraj conveyed to Avita that they believed the residents in the other houses were “at risk” from Odhuno. According to Sunderraj, she was not assured at the time of the call that the facility had done everything they could to keep the residents safe, especially the resident who made the abuse allegation at issue. Sunderraj also told Avita that merely moving Odhuno to a unit where the resident was not housed was not acceptable to abate the facility's immediate jeopardy status. Although the KDADS Defendants dispute that these conversations took place, a memorandum from this call reports that the following conversations took place or words to this effect:

Audrey (Sunderraj) then asked Christan (Rose) if she had anything else? Christan said, “No, nothing else, other than my concern for the resident.” Audrey then stated she was not sure that moving him (sic) to a different house was an effective intervention because that placed the other residents at risk. Christan then asked Vanessa (Underwood, Avita's Administrator) “How can you be 100% certain this did not happen?” Kim (Summers of Axiom) asked “How can you be 100% certain that it did?” Audrey then said “We are done. We have shared with you that we are very concerned. Your IJ (immediate jeopardy) status will be determined by the decisions you make regarding this employee (Odhuno).” Christan said again “We will let you know the status of your IJ when you let us know the status of his suspension. Actually, his employment.” Christan then left the room and the phone call with Audrey was ended.

         A few minutes after the August 5 meeting concluded, an Axiom representative told Rose of Avita's decision to terminate Odhuno's employment. Avita's immediate jeopardy status was abated within minutes of Rose receiving this information. Avita, however, still received monetary penalties of more than $73, 000 for the period before immediate jeopardy status was abated. If immediate jeopardy status was not abated, all federal Medicare/Medicaid funding to Avita would have been terminated within 23 days.

         The next day, on August 6, Rose met with Avita's administrator and two other Axiom representatives. Notes taken by one of the Axiom representatives state:

So we're going to terminate Paul without knowing exactly what he did & without interviewing him? Yes. Because it doesn't matter what he did because she believes it happened. He has caused her harm. It will be in the written report, that this is an IJ because he caused harm.

         After completing the investigation, Rose prepared and signed several documents. On August 11, 2014, Rose completed and signed the complaint processing form. Rose did not complete the box referring the abuse allegation to the KDADS legal department for additional investigation. On August 13, 2014, Rose prepared the complaint processing form that was reviewed and approved by Sunderraj. That form states that “[b]ased on observation, interview, and record review, the allegation of abuse was substantiated. . . . On 8/5/14, at 4:45 p.m., the surveyor with Audrey Sunderraj via speakerphone, talked with the facility about our concerns and told them the results of our investigation revealed strong evidence the alleged perpetrator was Paul Oduno, CNA.” That report is maintained by KDADS, but it is not a public document.

         Additionally, Rose prepared a Statement of Deficiencies, dated August 14, 2014, which was also reviewed and approved by Sunderraj. In the initial comments, Rose noted that “the facility failed to protect [the] resident from abuse and mental anguish.” In addition, the Statement of Deficiencies noted that:

The facility abated the immediate jeopardy on 8/5/14 at 5:00 p.m. when the facility completed their investigation, provided re-education on ANE to all employees on reporting allegations, suspended all non-Caucasian staff of the opposite gender that were in the building the time the immediate jeopardy was identified, then all non-Caucasian staff of the opposite gender until the facility's investigation was complete. The alleged perpetrator was also removed from the facility and was not expected to return.
This deficient practice of failure to report, thoroughly investigate and report an allegation of abuse, exploitation, and protect residents during the investigation remained at a scope and severity of an F.

         Finally, CMS has produced an Alleged Perpetrator Information Form pursuant to a business records subpoena. This form is undated and unsigned, and Rose denies completing it. Odhuno is identified as the alleged perpetrator on this form. It also states that his Avita employment was terminated on August 5, 2014.

         Rose testified as follows regarding the results of her investigation:

Q. So you did not substantiate that Miss Cornett's buttocks had been touched inappropriately by a staff member?
A. I had no concrete evidence to show what happened.
Q. Okay. Did you ever have any concrete evidence to substantiate that some staff member had looked into her room at night and grinned at her?
A. I did not.
Q. That was one of her allegations, wasn't it?
A. Yes.

         Less than three weeks after Rose prepared the Statement of Deficiencies, Bertelson (the resident's son) signed an affidavit stating that he informed Underwood that his mother determined on her own that the incident never happened. The affidavit further stated that his mother's mind was clear and that she was confusing a dream with reality. The affidavit was presented to KDADS.

         Bertelson subsequently signed another affidavit stating in part:

9. During the Kansas Department of Health and Environment's (sic) survey of the facility in July and August 2014, I spoke with the surveyor on one occasion regarding my mother and the allegations.
10. That conversation solely related to my mother's allegation that a black male nurse rolled her around in the grass. During that conversation, the surveyor did not question me about any allegations involving inappropriate touching.
11. On September 1, 2014, my daughter and I visited with my mother. During our conversations, my mother reported to me (and my daughter) that the whole incident involving a black man was just a dream and she knows that now.

         This affidavit was also presented to KDADS. KDADS did not reopen its investigation of the resident's abuse allegation after receiving Bertelson's affidavits.

         Odhuno has not been able to find work as a CNA since his termination from Avita. He interviewed for and was offered a position as a CNA at a facility in Haysville, Kansas, but after receiving his schedule and a tuberculosis shot, he was told to wait for a call from an administrator to begin work. He never received a call and did not obtain employment with that facility. In addition, some of the job applications Odhuno filled out asked whether he had ever been accused of sexual abuse. Odhuno answered this question by stating, “I will explain.” None of these applications resulted in employment.

         C. This Lawsuit

         Odhuno filed this lawsuit on November 3, 2015. After amending his complaint several times, he filed a third Amended Complaint on September 9, 2016. That complaint asserts claims against Avita, Axiom, the KDADS employees, and Tim Keck, the Secretary of KDADS. First, Odhuno asserts a Title VII discrimination claim based on his race, national origin, and gender against Avita. Second, he asserts discrimination claims under § 1981 based on his race and national origin against Avita and Axiom. Third, he brings a § 1983 claim against the KDADS employees in their individual capacities asserting that they violated his Fourteenth Amendment rights to procedural due process and equal protection of the laws. Fourth, he asserts a § 1983 claim against Defendant Keck in his official capacity seeking prospective equitable relief based on violations of his Fourteenth Amendment rights of due process and equal protection. Fifth, Odhuno asserts claims under Kansas law for the tort of outrage against the KDADS employees, Avita, and Axiom. And sixth, he asserts a Bivens claim against the KDADS employees for violation of his Fourteenth Amendment rights.

         The KDADS employees and Defendant Keck filed a motion for summary judgment seeking dismissal of Odhuno's federal claims. Odhuno filed a Rule 56(d) motion seeking additional discovery to respond to the summary judgment motion, which the Court denied. Odhuno then decided only to oppose the summary judgment motion as to Defendants Rose, Sunderraj, and Keck.[21] The parties have extensively briefed the issues, and the motion is ripe for the Court's consideration.

         II. Legal Standard

         Summary judgment is appropriate if the moving party demonstrates that there is no genuine issue as to any material fact, and the movant is entitled to judgment as a matter of law.[22] A fact is “material” when it is essential to the claim, and issues of fact are “genuine” if the proffered evidence permits a reasonable jury to decide the issue in either party's favor.[23] The movant bears the initial burden of proof and must show the lack of evidence on an essential element of the claim.[24] If the movant carries its initial burden, the nonmovant may not simply rest on its pleading but must instead “set forth specific facts” that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant.[25] These facts must be clearly identified through affidavits, deposition transcripts, or incorporated exhibits-conclusory allegations alone cannot survive a motion for summary judgment.[26] The Court views all evidence and reasonable inferences in the light most favorable to the party opposing summary judgment.[27]

         III. Analysis

         Defendants make several arguments as to why Odhuno's claims must be dismissed. First, they argue that Odhuno lacks Article III standing to bring his claims. Second, Defendants Sunderraj and Rose assert that they are entitled to qualified immunity on the § 1983 and Bivens claims. Third, Defendant Keck argues that he is entitled to sovereign immunity under the Eleventh Amendment. And fourth, Defendants argue that the Court should decline to exercise supplemental jurisdiction over the remaining state-law claims.

         A. Standing

         Article III standing is a threshold question central to the Court's subject matter jurisdiction.[28] To establish Article III standing, a “plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.”[29] The plaintiff bears the burden of showing that Article III standing exists.[30]

         Odhuno asserts the following three claims as sources of standing against Defendants: (1) the revocation or effective revocation of his CNA certification without due process of law; (2) the loss of his good name and reputation without due process of law; and (3) intentional discrimination based on his race, gender, and national origin. Defendants contend that Odhuno lacks Article III standing because he has not shown a harm that is fairly traceable to their conduct. However, for both of his due process claims Odhuno has submitted evidence that indicates Defendants Sunderraj and Rose were responsible for his termination. For example, the August 5 meeting ended with Defendants informing Avita that they would inform it of its immediate jeopardy status when Avita informed Rose of Odhuno's employment status. While Defendants now argue that Avita was in immediate jeopardy because it failed to report the abuse allegations and conduct its own investigation, by the time of the August 5 meeting, Avita had already sent KDADS the results of its own investigation that revealed no abuse occurred. KDADS, however, only abated the immediate jeopardy after learning of Odhuno's termination. In addition, notes taken from a meeting with Rose on August 6 indicate that Rose believed Odhuno committed the abuse and that's why the facility was placed in immediate jeopardy. This evidence is sufficient to show that Defendants' conduct is fairly traceable to any deprivation of due process rights Odhuno may have suffered.

         For Odhuno's equal protection claim, Odhuno has produced evidence indicating that Rose insisted that Avita suspend all black male staff while Avita investigated the allegation. This evidence is also sufficient to tie Odhuno's equal protection claim to Defendants. Thus, despite Defendants' insistence that they had nothing to do with Odhuno's termination, the evidence suggests otherwise. Odhuno has satisfied his burden to show that he suffered harm that is fairly traceable to Defendants' conduct, and he has Article III standing to assert his claims.

         B. Qualified Immunity

         Defendants Rose, Sunderraj, and Keck assert the defense of qualified immunity to Odhuno's § 1983 and Bivens claims.[31] When a defendant raises the defense of qualified immunity, the plaintiff must satisfy a two-part test.[32] First, the plaintiff must establish that the defendant's actions violated a constitutional or statutory right.[33] And second, the plaintiff must demonstrate that the right at issue was clearly established at the time of the defendant's unlawful conduct.[34]Qualified immunity applies unless the plaintiff can satisfy both prongs of the inquiry.[35] The Court has discretion to decide the order in which to examine these two prongs.[36]

         A right is clearly established if “there [is] a Supreme Court or Tenth Circuit decision on point, or the clearly established weight of authority from other courts must have found the law to be as the plaintiff maintains.”[37] The “plaintiff cannot simply identify a clearly established right in the abstract and allege that the defendant has violated it.”[38] The Court must instead analyze “whether the violative nature of particular conduct is clearly established.”[39] The plaintiff, however, does not have to produce a “reported case directly on point” to prevail.[40] Instead, the Court must evaluate whether “the unlawfulness of the officer's conduct [is] ‘apparent' ” in light of pre-existing law.[41]

         When the defendant has moved for summary judgment based on qualified immunity, the Court still views the facts in the light most favorable to the non-moving party and resolves all factual disputes and reasonable inferences in its favor.[42] “Unlike most affirmative defenses, however, the plaintiff [] bear[s] the ultimate burden of persuasion at trial to overcome qualified immunity by showing a violation of clearly established federal law.”[43] Thus, at summary judgment, the Court must grant qualified immunity unless the plaintiff establishes: “(1) a reasonable jury could find facts supporting a violation of a constitutional right, which (2) was clearly established at the time of the defendant's conduct.”[44] If a plaintiff carries this burden, then the defendant must show that no genuine issues of material fact exist that would defeat the claim for qualified immunity.[45]

         Odhuno claims that Rose and Sunderraj deprived him of his Fourteenth Amendment right to procedural due process based on a property interest theory and a liberty interest (stigma-plus) theory. He also claims that Rose and Sunderraj intentionally discriminated against him based on his race, gender, and national origin in violation of Fourteenth Amendment right to equal protection of the laws. The Court will address each claim below.

         1. Deprivation of Due Process Based on Odhuno's CNA Certification

         Odhuno contends that Sunderraj and Rose “effectively revoked” his CNA certification without due process of law when they “conveyed their purported belief to [Defendant Avita] on August 5, 2014, that plaintiff was guilty of abusing the resident despite absolutely no evidence to support that allegation.” According to Odhuno, this finding was “made and published” to Avita without notice to Plaintiff or an opportunity for a hearing. In support of his claim, Odhuno relies primarily on the Tenth Circuit's decision in Stidham v. Peace Officer Standards and Training.[46]

         The plaintiff in Stidham was a law enforcement officer certified by the State of Utah who sought employment in the law enforcement field.[47] Despite being highly ranked among the number of potential job candidates, the plaintiff was rejected by several prospective employers.[48]The plaintiff was informed that the state certification agency was informing potential employers that he allegedly raped a young girl, assaulted a resident, and resigned from his previous position under threat of termination.[49] The state agency, however, had not suspended or revoked the plaintiff's certification and officially maintained that he was eligible for hire.[50] The plaintiff brought a § 1983 claim against the state agency and its director alleging that the officer had been unconstitutionally deprived of a liberty interest in his certification without due process of law.[51]

         The Tenth Circuit first addressed whether the plaintiff had a constitutionally-protected right in his state-issued certification as a law enforcement officer.[52] Discussing prior Supreme Court precedent, the Tenth Circuit stated: “[T]he revocation or removal of a license or certificate that is ‘essential in the pursuit of a livelihood' requires procedural due process under the Fourteenth Amendment.”[53] The Tenth Circuit concluded that because the plaintiff's certification both required and enabled him to work as a peace officer in Utah, he retained a protected property right in his peace officer certificate.[54]

         Next, the Tenth Circuit addressed whether the defendants deprived him of due process by effectively revoking his law enforcement certification.[55] The plaintiff argued that even though his certification was not formally suspended or revoked, the defendants “effectively revoked” his certificate by disseminating the allegations to potential employers.[56] In analyzing this issue, the Circuit first noted that the defendants exceeded their authority under state law and ignored the state statutory requirements for due process.[57] The statutory authority governing the defendants did not allow the director or the council to report information about an officer to potential employers other than the state agency's normal role of evidencing certification ...

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