Mental health facility operator’s petition filed three days too late

The operator of two mental health facilities had a 60-day time period to challenge the North Carolina Department of Health and Human Services’ (DHHS) decision to revoke its licenses to operate, the unanimous North Carolina Supreme Court has ruled, affirming dismissal of a petition filed three days too late.

Following an investigation, a North Carolina corporation that operates two mental health facilities in the Raleigh area had its licenses revoked by the DHHS.

The agency mailed notice of the revocation decision by certified mail on Aug. 3, 2021, with a section informing the operator that it could challenge the revocation “by filing a petition for a contested case hearing with the Office of Administrative Hearings within sixty (60) days of mailing this letter.”

The operator filed a petition for a contested case on Oct. 5, 2021, 63 days after DHHS mailed the notice.

DHHS moved to dismiss on the ground that the petition was untimely.

The operator argued that because DHHS used the mail to send notice of its decision, the timeline was governed by Rule 6(e) of the Rules of Civil Procedure, which states that three days are added to any prescribed period if service is done by mail.

When the administrative law judge rejected the argument and dismissed the petition, the operator appealed. The trial court reversed the dismissal, and the Court of Appeals reversed again, reinstating dismissal.

Justice Richard Dietz affirmed dismissal in Bradley Home, Caring for Wake Community and the Carolinas Inc. v. N.C. Department of Health and Human Services, Division of Health Service Regulation, Mental Health Licensure & Certification Section.

In most cases, the “time limitation” to commence a contested case under the Administrative Procedure Act (APA) is 60 days, the court explained. The 60-day period “commences when notice is given of the agency decision to all persons aggrieved” by that decision.

Notice can be given in three different ways: “by personal delivery, electronic delivery, or by the placing of the notice in an official depository of the United States Postal Service wrapped in a wrapper addressed to the person at the latest address given by the person to the agency.”
When notice by mail is utilized, notice is given as soon as the decision is placed in the mail, even if it takes several days for receipt.

Filing a petition for a contested case within the 60-day time limitation period is mandatory because a person’s right to administrative and judicial review of state agency action is not inherent, Dietz wrote – it is created by statute.

While the operator relied on Rule 6(e), the court pointed out that this reasoning ignored the language of the provision.

“As the Court of Appeals majority correctly held, the administrative code states that the Rules of Civil Procedure ‘shall apply in contested cases in the Office of Administrative Hearings,’” the court said. “The 60-day limitation period at issue is not a time deadline in a contested case. Instead, it is the time deadline to commence a contested case by filing the petition. In other words, the existence of an adverse agency decision is not what creates a contested case; the aggrieved party must choose to file a petition, ‘at which time the dispute becomes a ‘contested case.’”

This is consistent with civil actions governed by the Rules of Civil Procedure, the court added. Time deadlines that apply before a civil action is commenced, such as statutes of limitation, are not governed by the Rules of Civil Procedure.

Rule 6(e) also applies to “service of a notice or other paper,” but the term “service” refers to a judicial proceeding, the court said.

“When a state agency notifies an impacted person about the agency’s decision, by contrast, that is not a form of service for any judicial or quasi-judicial proceeding,” the court wrote. “Thus, delivery of that agency decision is not ‘service,’ just as delivering a contract termination letter that constitutes a breach is not ‘service’ under the Rules of Civil Procedure.”

The court also found that applying the Rules of Civil Procedure to section 150B-23 could render the enabling portions of the administrative code unconstitutional, an outcome the rules of interpretation “require us to avoid.”

“Specifically, other provisions of the APA expressly identify when and how the Rules of Civil Procedure and Rules of Evidence apply to contested cases,” the court said. “[W]ere we to interpret these code provisions as [the operator] suggests, it could create a claim that the provisions are ultra vires and unconstitutional.”

The court clarified that although courts have previously concluded that Rule 6(a) applies to section 150B-23(f), it didn’t mean that Rule 6(e) also applied. The General Assembly amended the statute to reference Rule 6(a) and only that section of the Rule, which underscored that Rule 6(e) did not apply in the current case.

“In sum, we hold that the provisions of Rule 6(e) of the Rules of Civil Procedure do not apply to the statutory limitation period to commence a contested case,” the court held. “Accordingly, the ALJ properly dismissed [the operator’s] petition for a contested case because it was untimely.”

The court recognized that the dismissal might seem harsh but noted that precedent contains “many examples” of litigants whose petitions were similarly dismissed for missing the same deadline by only a few days.

“The public expects courts to apply statutory rules ‘uniformly to all litigants who appear before them,’” the court concluded. “Enforcing a time deadline often can seem harsh ‘to individuals who fall just on the other side of them, but if the concept of a filing deadline is to have any content, the deadline must be enforced.’ Here, consistent with a long line of cases where litigants did not comply with this mandatory deadline, the disposition required by law is to dismiss the case.”
Matthew W. Wolfe of Caldwell & Berkowitz in Raleigh, who represented the operator, did not respond to a request for comment.

Neither did the Office of the Attorney General, represented by Kerry M. Boehm.