Medicare Nursing-Home CMP Proceedings Are “Public Rights” Not Requiring a Seventh Amendment Jury Trial

Case: Sligo Creek Center v. HHS (4th Cir. June 5, 2026) (Heytens, J.)
Posture: Petition for review of an HHS Departmental Appeals Board decision upholding civil monetary penalties (CMPs) for noncompliance with Medicare participation requirements.

1. Introduction

Sligo Creek Center v. HHS addresses whether a Medicare-participating nursing facility is entitled to a Seventh Amendment jury trial when HHS seeks civil monetary penalties through the agency’s administrative adjudication process. The petitioner, Sligo Creek Center, operated a nursing home in Montgomery County, Maryland, and was cited after a tuberculosis (TB) exposure investigation for failing to follow through on latent TB evaluation/treatment steps and for inadequate documentation under the facility’s infection-control obligations.

The case sits at the intersection of (i) Medicare’s heavily regulated participation regime, (ii) post-SEC v. Jarkesy litigation over jury-trial rights in agency penalty proceedings, and (iii) administrative-law review of factual findings and reasoned decisionmaking.

Key issues:

  • Whether HHS’s administrative prosecution of CMPs against a Medicare provider triggers a Seventh Amendment right to a jury trial under SEC v. Jarkesy.
  • Whether the agency’s noncompliance and “immediate jeopardy” determinations were arbitrary/capricious or unsupported by substantial evidence.

Parties: Petitioner Sligo Creek Center; Respondents United States Department of Health & Human Services and the Secretary; amici (American Health Care Association and The National Center for Assisted Living) supporting petitioner.

2. Summary of the Opinion

The Fourth Circuit denied the petition for review. The court held:

  • No Seventh Amendment jury-trial right attaches to HHS’s administrative adjudication of Medicare nursing-home CMPs because the enforcement action involves public rights and is properly analogized to Atlas Roofing Co. v. Occupational Safety & Health Review Commission, not to Granfinanciera, S.A. v. Nordberg or SEC v. Jarkesy.
  • HHS did not act arbitrarily or capriciously in treating the then-applicable infection-control regulation, 42 C.F.R. § 483.65 (2016), as requiring the facility to follow its own infection-control policy and public health requirements.
  • The agency’s findings were supported by substantial evidence, including the absence of documentation of latent TB diagnoses and the absence of evidence that clinicians were asked to evaluate residents for latent TB treatment.

3. Analysis

3.1. Precedents Cited

A. Medicare’s regulated participation context

The court framed Medicare participation as a privilege conditioned on compliance with extensive requirements, quoting Shalala v. Illinois Council on Long Term Care, Inc. for the proposition that nursing homes “must comply with numerous statutory and regulatory requirements” to receive Medicare reimbursement. This backdrop mattered because it helped characterize the obligations and enforcement mechanism as regulatory and programmatic—not common-law.

B. Standard of review for constitutional questions and agency factfinding

The court cited Loper Bright Enters. v. Raimondo for de novo review of constitutional compliance, while emphasizing that factual findings are conclusive if supported by substantial evidence under 42 U.S.C. § 1320a-7a(e). The discussion signals a familiar division of labor: constitutional characterization is for courts; factual disputes generally stay with the agency if adequately supported.

C. The post-Jarkesy Seventh Amendment framework

The decision is best read as the Fourth Circuit’s explicit placement of Medicare CMP adjudications on the “public rights” side of the post-SEC v. Jarkesy line. To do that, the court relied heavily on:

  • SEC v. Jarkesy: supplied the two-step inquiry (Seventh Amendment implication; then public-rights exception) and, crucially, the method of resolving public-rights disputes by analogy to Granfinanciera, S.A. v. Nordberg versus Atlas Roofing Co. v. Occupational Safety & Health Review Commission.
  • Axalta Coating Sys. LLC v. Federal Aviation Admin.: the Fourth Circuit adopted the Third Circuit’s approach and conclusion that Jarkesy distinguishes but does not overrule Atlas Roofing, and that where an enforcement scheme is “novel” and not borrowed from common law, it can be assigned to agency adjudication without a jury.
  • Granfinanciera, S.A. v. Nordberg and Atlas Roofing Co. v. Occupational Safety & Health Review Commission: treated as the two poles. Granfinanciera represents reclassified common-law-like actions; Atlas Roofing represents “self-consciously novel” regulatory causes of action.
  • AT&T, Inc. v. Federal Commc'ns Comm'n: cited as another circuit applying the same two-step Jarkesy analysis, underscoring that the framework is quickly becoming standardized.

D. Distinguishing “common law contract” analogies

The opinion acknowledged (and rejected) a contract analogy, referencing Sun Valley Orchards, LLC v. U.S. Dep't of Lab. as an example where a claim could sufficiently resemble a traditional breach-of-contract action. Here, by contrast, the CMP regime does not function like damages for breach (no need for government damages as a “non-breaching party”); it is a regulatory remedy for noncompliance.

E. Preservation/forfeiture and administrative-law comparisons

  • Grayson O Co. v. Agadir Int'l LLC was used twice to dispose of arguments not raised in the opening brief (including a late challenge to the existence/scope of the public-rights exception and a late textual spin on “proceed with evaluation”).
  • Almy v. Sebelius supported the court’s characterization of Medicare requirements as “technical,” reinforcing the distance from general common-law duties.
  • Golden Living Ctr. - Mountain View v. Secretary of Health & Hum. Servs. served as a foil: it illustrated when penalizing a facility for an unrequired “implied” measure can be arbitrary/capricious; the Fourth Circuit found Sligo Creek had notice via its own policy incorporated into the infection-control “program” obligation.
  • Putnam Ctr. v. United States Dep't of Health & Hum. Servs. was cited for the meaning of substantial evidence (“evidence that a reasonable mind might accept as adequate”).
  • In re: Express Scripts, Inc. was used to underscore a conceptual difference from common-law private-right suits: historically, common-law suits required both legal wrong and concrete harm; the Medicare CMP regime can operate without proof of actual injury.

3.2. Legal Reasoning

A. The court assumed Seventh Amendment “implication,” then decided the case on public rights

At step one of Jarkesy, the government did not contest that the monetary penalty “implicates” the Seventh Amendment. The Fourth Circuit therefore proceeded directly to step two: whether the public rights doctrine permits agency adjudication without a jury.

B. Why Medicare CMP enforcement looks like Atlas Roofing, not Granfinanciera/Jarkesy

The court emphasized features that made the CMP proceeding “novel” and “unknown to the common law”:

  • Source of duty: The duty arose from participation in a voluntary government spending program (Medicare), not from a generally applicable common-law duty of care. The governing obligation required the facility to “establish and maintain” an infection-control program (42 U.S.C. § 1395i-3(d)(3)(A) and 42 C.F.R. § 483.65 (2016)), which included complying with its own adopted protocols and public health authority requirements.
  • Structure of enforcement: Congress created an “intricate” enforcement scheme administered by state/federal actors, with multiple remedies (withholding reimbursement, temporary management, termination, and CMPs). The court found it telling that petitioner conceded there would be no jury-trial right for these non-monetary remedies—supporting the view that CMPs are part of the same regulatory toolbox, not a disguised common-law action.
  • Not tethered to injury: Unlike common-law tort actions (which historically require concrete harm), HHS may impose remedies, including CMPs, without proving actual harm, and “immediate jeopardy” is satisfied by likely serious harm. This “no injury required” structure supported the conclusion that the proceeding is regulatory/public-rights in nature.
  • Not contract damages: Although provider agreements exist, CMPs operate as statutory/regulatory sanctions for noncompliance rather than common-law expectation damages for breach; the government need not prove damages as a contracting party.

These characteristics aligned the case with Atlas Roofing Co. v. Occupational Safety & Health Review Commission, where Congress created a “new cause of action” in a regulatory scheme and assigned adjudication to an agency—rather than with Granfinanciera, S.A. v. Nordberg and SEC v. Jarkesy, which involved reclassified actions closely tracking common-law analogues.

C. Administrative-law challenges: notice, arbitrariness, and substantial evidence

On arbitrariness/capriciousness, Sligo Creek argued HHS effectively imposed “new, implied regulatory requirements.” The court rejected that characterization because the obligation to evaluate/treat (or document why not) was embedded in the facility’s own infection-control program, which the regulation required it to “maintain.”

On substantial evidence, the court pointed to concrete record deficiencies: resident clinical records lacked notes of latent TB diagnoses, and the facility produced no evidence that clinicians were asked to evaluate residents for latent TB treatment or to document reasons for non-treatment. Given the statutory standard making fact findings conclusive if supported by substantial evidence, the court affirmed.

3.3. Impact

1) Post-Jarkesy stability for HHS CMP adjudications. The decision provides a clear circuit-level statement that Medicare nursing-home CMP proceedings remain within the Atlas Roofing public-rights model. For regulated entities, it narrows the practical reach of SEC v. Jarkesy in the Medicare enforcement context.

2) Litigation strategy shift from “jury trial” to “program text and documentation.” Providers challenging CMPs in the Fourth Circuit are more likely to find traction in (i) text-based arguments about what the “program” requires, (ii) notice and incorporation questions, and (iii) evidentiary disputes—rather than constitutional jury-trial arguments.

3) Compliance takeaway: internal policies can become enforceable benchmarks. By accepting the agency’s view that the infection-control regulation required compliance with the facility’s own program, the decision reinforces that internal protocols and documentation practices can materially shape regulatory liability—especially where regulations require maintaining programs and records of corrective actions.

4) Broader administrative law implications. Together with Axalta Coating Sys. LLC v. Federal Aviation Admin. and citations to AT&T, Inc. v. Federal Commc'ns Comm'n, the opinion reflects an emerging post-Jarkesy consensus: courts will resolve many jury-trial challenges by characterizing whether the statutory enforcement action is a novel regulatory/public-rights mechanism versus a repackaged common-law claim.

4. Complex Concepts Simplified

  • Seventh Amendment (“Suits at common law”): The Constitution preserves a jury trial right in cases that resemble traditional common-law suits (like classic tort or contract damages actions).
  • Public rights doctrine: A doctrine allowing Congress to assign certain matters—especially those involving federal regulatory schemes, public programs, or claims integrally tied to government functions—to non-Article III adjudicators (like agencies) without a jury.
  • Granfinanciera vs. Atlas Roofing (as used here): A shorthand comparison: if Congress created a genuinely new regulatory cause of action (Atlas Roofing), agencies can adjudicate; if Congress effectively repackaged a common-law claim (Granfinanciera), a jury may be required.
  • Immediate jeopardy (42 C.F.R. § 488.301): A severity finding meaning noncompliance caused or is likely to cause serious harm. “Likely to cause” matters—actual harm need not be proven.
  • Arbitrary and capricious (5 U.S.C. § 706(2)(A)): A reviewing court asks whether the agency acted irrationally, failed to explain itself, ignored key factors, or surprised regulated parties with requirements they had no notice of.
  • Substantial evidence: A deferential standard for agency factfinding: not “most persuasive evidence,” but enough that a reasonable person could accept it.

5. Conclusion

Sligo Creek Center v. HHS establishes (within the Fourth Circuit) that HHS may pursue Medicare nursing-home civil monetary penalties through administrative adjudication without providing a Seventh Amendment jury trial because such enforcement is a public-rights matter akin to Atlas Roofing Co. v. Occupational Safety & Health Review Commission, not a reclassified common-law tort or contract claim.

The opinion also underscores a practical compliance lesson: where Medicare regulations require a facility to “establish and maintain” an infection-control program and records of corrective actions, failures to follow or document adherence to the facility’s own written protocols can support noncompliance and immediate-jeopardy findings under deferential substantial-evidence review.