                      NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE


               BEST OF EUROPE ADULT HOME CARE LLC,
                             Appellant,

                                         v.

            ARIZONA DEPARTMENT OF HEALTH SERVICES,
                           Appellee.

                              No. 1 CA-CV 15-0439
                                FILED 1-12-2017


            Appeal from the Superior Court in Maricopa County
                         No. LC2015-000011-001
             The Honorable Crane McClennen, Judge (Retired)

                                   AFFIRMED


                                    COUNSEL

Milligan Lawless P.C., Phoenix
By John A. Conley, Bryan S. Bailey
Counsel for Appellant

Arizona Attorney General’s Office, Phoenix
By Paula S. Bickett, Patricia C. La Magna, Jo-Ann Handy
Counsel for Appellee
                             BEST v. ADHS
                           Decision of the Court



                      MEMORANDUM DECISION

Acting Presiding Judge Samuel A. Thumma delivered the decision of the
Court, in which Judge Margaret H. Downie and Judge Mark R. Moran1
joined.


T H U M M A, Judge:

¶1           Best of Europe Adult Home Care, LLC, appeals from the
superior court’s dismissal of its appeal of a Letter and Amended Statement
of Deficiencies issued by the Arizona Department of Health Services
(Department) for lack of subject-matter jurisdiction. Because Best has
shown no reversible error, the dismissal is affirmed.

                 FACTS AND PROCEDURAL HISTORY

¶2           Best operates a 10-bed assisted living home in Yavapai
County. See Ariz. Rev. Stat. (A.R.S.) §§ 36-401(A)(8), (9) (2016).2 At all
relevant times, the Department licensed and regulated Best. Best is not
licensed to prescribe medicine but, when necessary, assists residents in
maintaining their medication regimens. Bayada Home Health Care, Inc., an
independent nursing agency, monitors the health of Best’s residents, and
coordinates with primary care doctors, informing Best of any medication
changes.

¶3             In mid-May 2013, a resident at Best’s assisted living home
died. The resident apparently was taking several anti-coagulation
medications and a subsequent autopsy concluded the cause of death
appeared to be “severe anemia . . . attributable to hyper-anticoagulation.”
After receiving a complaint regarding the death, the Department opened an
investigation. Approximately 45 days after the death, the Department
visited Best’s assisted living home. During that inspection, a Bayada nurse
provided the Department with a note written two days after the death


1The Honorable Mark R. Moran, Judge of the Arizona Superior Court, has
been authorized to sit in this matter pursuant to Article VI, Section 3 of the
Arizona Constitution.

2Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated.


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                             BEST v. ADHS
                           Decision of the Court

claiming she had told Best about a doctor’s change order reducing the
amount of the resident’s anti-coagulation medicine a few days before the
death.

¶4            After further investigation, the Department issued a
Statement of Deficiencies (SOD) that, as amended, found Best did not
comply with two Department rules in connection with the death.
Apparently deeming the deficiencies “serious violations of the rules,” the
Department directed Best to pay a $500 civil penalty and, in an
“Enforcement Meeting Notification of Rights,” notified Best that if it did not
pay the penalty, the Department would send a “legal order.” Best was
advised that it could request a hearing before the Office of Administrative
hearings “regarding any legal order issued by the Department.”

¶5             Soon after the issuance of the SOD, the family of the resident
who died sued Best, relying in part on the SOD. According to Best,
discovery obtained in that suit “conclusively disproved” the findings in the
SOD, including contradicting the note the Bayada nurse provided during
the Department’s visit. Best provided this information to the Department
and requested a hearing or a rescission of the SOD. In response, the
Department sent Best a December 3, 2014 letter that (1) re-issued the SOD
unchanged; (2) informed Best there would be no enforcement action “at this
time;” (3) directed Best to send an “acceptable Plan of Correction to the
Bureau of Residential Facilities Licensing” (and stated that a failure to do
so meant “further action may be taken” and that the SOD would become
part of the Department’s public file) and (4) imposed no civil penalty. The
Department concedes that this December 3, 2014 letter does not constitute
any disciplinary action upon Best’s license. And the record provided does
not suggest any other disciplinary action by the Department against Best’s
license in this matter.

¶6             Best disputed the SOD’s conclusions that it did not comply
with two Department rules and did not submit any Plan of Correction.
After a subsequent visit to Best’s assisted living home, the Department
determined that the deficiencies identified in the SOD had been corrected.
Best, however, maintains that it never violated the Department’s rules as
stated in the SOD. Indeed, throughout the investigation, the superior court
proceedings and this appeal, Best has disputed the SOD’s conclusions.




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                            Decision of the Court

¶7             On January 9, 2015, Best filed a notice of appeal of the
December 3, 2014 letter in superior court under A.R.S. § 12-904, and on
January 16, 2015, requested that “the Department set an administrative
hearing to review” the December 3, 2014 letter. The Department denied
Best’s request for administrative review, stating the December 3, 2014 letter
is “neither a notice of appealable agency action vesting [Best] with the right
to an administrative hearing, nor is it a final administrative decision vesting
[Best] with judicial review and/or rehearing or review rights.” The
Department moved to dismiss the superior court action, arguing, as
relevant here, that the December 3, 2014 letter was not an appealable
“administrative decision” subject to judicial review, meaning the superior
court lacked subject matter jurisdiction. After full briefing and oral
argument, the superior court granted the Department’s motion to dismiss.
This court has jurisdiction over Best’s timely appeal of the superior court’s
decision pursuant to Article 6, Section 9, of the Arizona Constitution, and
A.R.S. §§ 12-913,3 -120.21(A)(1) and -2101(A)(1).

                               DISCUSSION

I.     The Superior Court Did Not Err In Granting The Department’s
       Motion To Dismiss For Lack Of Subject Matter Jurisdiction.

¶8            The dispositive jurisdictional issue is whether the December
3, 2014 letter, including the SOD but expressly representing that no
enforcement action would be taken, is an appealable administrative
decision subject to judicial review. Best argues the superior court erred in
granting the Department’s motion to dismiss because the December 3, 2014
letter was an appealable “administrative decision” under A.R.S. § 12-901
and, alternatively, that the superior court had “independent” constitutional
subject matter jurisdiction “to provide equitable relief to remedy the
Department’s violation of” Best’s “[d]ue [p]rocess rights.” These alternative
arguments are addressed in turn.




3Notwithstanding its reference to “the supreme court,” A.R.S. § 12-913 “has
been construed as also allowing an appeal to the court of appeals, which
was created after § 12-913 was enacted.” Svendsen v. Arizona Dept. of Transp.,
Motor Vehicle Div., 234 Ariz. 528, 533 ¶ 13 (App. 2014).



                                      4
                               BEST v. ADHS
                             Decision of the Court

       A.     The December 3, 2014 Letter Was Not An Appealable
              Administrative Decision Under A.R.S. § 12-901 Subject To
              Judicial Review.

¶9             This court reviews de novo the grant of a motion to dismiss
for lack of jurisdiction. Guminski v. Arizona State Veterinary Med. Examining
Bd., 201 Ariz. 180, 182 ¶ 9 (App. 2001). The superior court has statutory
jurisdiction to review appealable administrative decisions. See A.R.S. § 12-
905(A); 36-446.07(M); see also Guminski, 201 Ariz. at 183 ¶ 12. By statute, an
“administrative decision” is appealable only when it both: (1) “affects the
legal rights, duties or privileges of persons” and (2) “terminates the
proceeding before the administrative agency.” A.R.S. § 12-901(2); see also
Bolser Enterprises, Inc. v. Arizona Registrar of Contractors, 213 Ariz. 110, 113 ¶
14 (App. 2006); Murphy v. Board of Medical Examiners of State of Arizona, 190
Ariz. 441, 448-49 (App. 1997).

              1.      The December 3, 2014 Letter Did Not Affect Best’s
                      Legal Rights, Duties or Privileges As Required By
                      A.R.S. § 12-901(2).

¶10            Best argues the December 3, 2014 letter affects its legal rights,
duties or privileges because the SOD harms Best’s reputation and may be
used against it in future disciplinary proceedings, including to increase
penalties. At oral argument before this court, Best agreed an alteration of
legal status is required for a legal right to be affected. Although arising in a
different context, and the parties dispute its application, Murphy v. Board of
Medical Examiners of State of Arizona, 190 Ariz. 441 (App. 1997) provides the
relevant analysis.

¶11            In Murphy, the Arizona Board of Medical Examiners issued a
“letter of concern” to a doctor, which was public and could be used against
the doctor in future disciplinary proceedings. 190 Ariz. at 448. The doctor
sought and obtained judicial review of the letter from the superior court. Id.
at 445. On appeal, however, this court held that the doctor’s “allegations of
harm are purely speculative and involve no property rights triggering due
process concerns,” vacating the superior court’s decision because the letter
was not a final administrative decision subject to judicial review. Id. at 448-
49.

¶12            Best argues Murphy is distinguishable because the SOD
exposes Best to “stiffer fines in the future.” However, as with the December
3, 2014 letter in this case, the letter in Murphy was a public document that
expressly “‘may be used in future disciplinary actions against’” the subject
of the investigation. Id. at 448 (quoting A.R.S. § 32-1451(K) (1997)). Just as


                                        5
                              BEST v. ADHS
                            Decision of the Court

the SOD is non-disciplinary and advises Best it must correct the deficiencies
“or further action may be taken,” the letter in Murphy was “a
nondisciplinary advisory letter to notify the physician that . . . continuation
of the activities which led to the information being submitted to the board
may result in action against the physician’s license.” Id. (quoting A.R.S. §
32-1401(14) (1997)). Notwithstanding Best’s arguments to the contrary, the
analysis in Murphy applies here.

¶13          Best also argues F.C.C. v. Fox Television Stations, Inc., 132 S. Ct.
2307 (2012), shows the December 3, 2014 letter is an appealable
“administrative decision” under A.R.S. § 12-901(2). Fox, however, did not
address whether agency action was appealable under A.R.S. § 12-901(2).
Indeed, Best concedes that Fox “decided the case on due process grounds
alone.”

¶14           Fox held that the Federal Communications Commission
(FCC) violated the due process rights of two television networks by failing
to provide proper notice of a change in enforcement policies. Id. at 2320.
Although stating the lack of a sanction did not moot the question, id., Fox
did not decide whether the FCC’s 93-page order constituted final agency
action. Rather, Fox decided whether the FCC’s enforcement policies were
unconstitutionally vague, thereby failing to provide due process notice,
deciding the issue with “rigorous adherence to [the] requirements” of due
process because speech was involved. Id. at 2317. Fox did not hold that
possible collateral impact of agency action always implicates due process.
Moreover, Best conceded at oral argument before this court that no case
applying Fox has construed it in the way Best urges here. Accordingly, Best
has not shown that Fox alters the analysis in Murphy of what constitutes an
appealable “administrative decision” under A.R.S. § 12-901(2).

¶15           Best’s reliance on Comeau v. Arizona State Bd. of Dental
Examiners, 196 Ariz. 102 (App. 1999) similarly is unavailing. In Comeau, a
regulatory agency censured a dentist after an informal investigative
interview. In addition to the censure, the dentist was placed on probation
and ordered to take classes. Id. at 106 ¶ 15. Unlike the SOD here, the censure
was discipline taken against the dentist’s license, was enumerated in the
relevant statute as a disciplinary action and was a final order subject to
judicial review by statute. See A.R.S. § 32-1263.01(A)(3); (C)-(D) (1999).
There is no comparable discipline here.

¶16           Although the Department had the authority to “censure” an
assisted living facility manager, A.R.S. § 36-446.07(A), it did not do so here.
Instead, as authorized by A.R.S. § 36-425(G), the Department provided Best


                                       6
                              BEST v. ADHS
                            Decision of the Court

“an opportunity to correct deficiencies” by submitting a Plan of Correction
before any disciplinary action was taken (and no such action has been taken
to date). Given these statutory directives, censure is not synonymous with
the Department’s actions here. For these reasons, Comeau is distinguishable.

¶17            Although they are not identical, the similarities between a
letter of concern and the December 3, 2014 letter here (including the SOD)
mean the Murphy analysis applies. The December 3, 2014 letter, like the
letter of concern in Murphy, does not affect the legal rights, duties or
privileges of Best. As such, Best has not shown the December 3, 2014 letter
meets the first requirement of A.R.S. § 12-901(2), meaning that letter
(including the SOD) is not a final administrative action.

              2.      The December 3, 2014 Letter Did Not Terminate The
                      Proceedings Before The Department As Required By
                      A.R.S. § 12-901(2).

¶18            Best argues that, under Bolser Enterprises, Inc. v. Registrar of
Contractors, 213 Ariz. 110 (App. 2006), the December 3, 2014 letter
terminated the proceedings before the Department. Bolser, however,
involved the revocation of a license to do business, which the court found
terminated the administrative proceedings. 213 Ariz. at 113 ¶ 14. Here, the
December 3, 2014 letter took no comparable action and, indeed, informed
Best there would be no enforcement action “at this time.” The December 3,
2014 letter did direct Best to send a Plan of Correction, adding that a failure
to do so meant “further action may be taken.” But although Best did not
provide such a plan, no further action has been taken at this time. On this
record, unlike in Bolser, the December 3, 2014 letter did not terminate the
proceedings before the Department.4 For this additional reason, the




4 Similarly, Best’s reliance on Sackett v. E.P.A., 132 S. Ct. 1367 (2012), in its
reply brief on appeal does not alter the result. Sackett involved a challenge
to an administrative order requiring parties “immediately to restore
[certain real] property pursuant to an [agency] work plan.” Id. at 1369.
Although akin to the agency action in Bolser, Best has not shown how the
compliance order in Sackett is comparable to the December 3, 2014 letter
here.



                                       7
                             BEST v. ADHS
                           Decision of the Court

superior court properly concluded the December 3, 2014 letter was not an
appealable administrative decision action under A.R.S. § 12-901(2).5

       B.     Best Has Not Shown The Superior Court Had “Independent
              Constitutional Subject Matter Jurisdiction” To Review The
              December 3, 2014 Letter.

¶19           Best argues the superior court had independent constitutional
subject-matter jurisdiction to “remedy the Department’s violation of
[Best’s] [d]ue [p]rocess rights.”6 Best claims Fox “confer[s] constitutional
subject matter jurisdiction upon the court.” But Fox does no such thing.
Instead, Fox rejected the government’s argument that a due process
challenge to a regulation involving television broadcasting of indecent
material was “moot” based on assurances that the government would forgo
consideration of prior broadcasts. 132 S. Ct. at 2318. The court in Fox
exercised jurisdiction under the Federal Administrative Procedure Act,
F.C.C. v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1810 (2009), not
“independent constitutional subject matter jurisdiction” claimed by Best
here. Indeed, Best has cited (and this court has found) no case applying Fox
as providing independent constitutional subject matter jurisdiction for
courts to consider non-final agency action.

¶20            Nor has Best shown that, unless Arizona’s Administrative
Review Act (ARA) “clearly and unambiguously” divests the superior court
of jurisdiction, courts have jurisdiction to consider all non-final agency
action. To the contrary, “[t]he superior court’s jurisdiction pursuant to the
ARA, A.R.S. §§ 12-901 to -914 ‘exists only by force of statute and is limited
by the terms of the statute.’” Grosvenor Holdings, L.C. v. Figueroa, 222 Ariz.
588, 594 ¶ 13 (App. 2009) (quoting Guminski v. Arizona State Veterinary Med.
Examining Bd., 201 Ariz. 180, 184 ¶ 8 (App. 2001)). Best has not shown that
Fox or Best’s due process claim would provide an independent basis for the
superior court to exercise jurisdiction over Best’s challenge to the December
3, 2014 letter. Accordingly, the superior court properly dismissed Best’s

5Given this conclusion, this court does not address the parties’ arguments
regarding whether Best was required to exhaust administrative remedies
before seeking judicial review.

6 Best did not assert independent constitutional jurisdiction in its notice of
appeal to the superior court. Best did, however, make such an assertion in
the response to the Department’s motion to dismiss, thereby preserving the
issue for appellate review.



                                      8
                             BEST v. ADHS
                           Decision of the Court

appeal and, as a result, this court lacks jurisdiction to address the parties’
arguments regarding the merits of the December 3, 2014 letter.

                               CONCLUSION

¶21           The superior court’s dismissal is affirmed. Because Best is not
the prevailing party, its request for attorneys’ fees on appeal pursuant to
A.R.S. § 12-348 is denied.




                         AMY M. WOOD • Clerk of the Court
                         FILED: AA




                                         9
