Nursing home challenges federal agency's power to fine without a jury

When the government seeks civil money penalties, the Seventh Amendment entitles the defendant to a jury trial. Agencies cannot evade that guarantee by routing their own enforcement actions through in-house tribunals where they investigate, prosecute, and adjudicate. Judicial review of these in-house decisions does not cure the constitutional defect because courts must defer to the agency’s fact-findings. As a result, private parties are never afforded an independent review of the facts—contrary to the Constitution’s guarantees of independent courts and juries.

This is what happened to Sligo Creek Center, a Medicare-participating nursing facility in Montgomery County, Maryland. After the Centers for Medicare & Medicaid alleged that the facility violated federal infection-control requirements, the Department of Health and Human Services (HHS) imposed a fine of nearly $1.5 million. No judge or jury outside the agency ever found the facts.

An administrative law judge employed by the agency ruled against the facility, and the in-house appeals board of the HHS affirmed. When the case finally reached an independent court more than a decade after it began, the Fourth Circuit held that the facility had no right to a jury. The court reasoned that because Congress had enacted new requirements for nursing homes that voluntarily participate in Medicare, the claims against Sligo Creek involved public, not private, rights. According to the Fourth Circuit, Congress may deny private parties a jury trial if it creates a novel, detailed enforcement scheme that lacks a precise common-law analog.

Sligo Creek, represented by Pacific Legal Foundation free of charge, is now asking the Supreme Court to step in and affirm their constitutional right to a fair trial.

In 2024, the Supreme Court held in SEC v. Jarkesy that the “public rights” rule is a narrow exception to the Constitution’s guarantee of a trial in an independent court before a jury. The Court emphasized that this narrow exception has no textual basis in the Constitution and that it must be considered with care—lest the exception swallow the general rule that private parties are entitled to their day in court.

Further, as the Supreme Court has held in Tull v. United States, “actions by the Government to recover civil penalties under statutory provisions therefore historically have been viewed as one type of action in debt requiring trial by jury.” That is precisely the situation here.

Nor does Sligo Creek’s participation in Medicare change things. Receiving Medicare benefits indirectly through its residents doesn’t require Sligo Creek to forfeit its constitutional rights, any more than a grocery store forfeits its constitutional rights by accepting customers’ food stamps.

A ruling for Sligo Creek would confirm that Congress cannot make access to a federal program contingent on Americans giving up their constitutional rights, and that any private party facing civil monetary penalties imposed by a federal agency is entitled to have its case heard by a jury—not decided behind closed doors by the same agency that brought the charge.