Whatever kind of business you are in, chances are you have some interaction with a state agency. Whether it is the Department of Labor and Industry, the Department of Human Services, or the Department of Health, there is somebody whose job it is to decide whether your business is doing what it is supposed to be doing, and not doing what it isn’t supposed to be doing. And if you disagree with an agency’s decision, it is up to you to challenge that decision through an administrative appeal. This appeal must be filed in the time and manner that the agency sets—or face automatic dismissal and be stuck with the administrative decision permanently. If the deadline to appeal is missed, there is no next step. It is their way or the highway.
A Trap for the Unwary
It is the legislature, not the agency, that determines the scope of an agency’s jurisdiction.[1] “Both the filing and service requirements of a notice of appeal are jurisdictional,”[2] and “[a]n agency is deprived of jurisdiction to review its decisions if a timely appeal is not filed as required by statute.”[3] In other words, the deadlines the agency gives you are hard deadlines.
Example—Overpayment to Medical-Care Vendors
For example, the Department of Human Services (DHS) may recover funds and impose sanctions on vendors of medical care who have been paid out of public fund for services not rendered.[4] Absent exigent circumstances, DHS must provide notice and an opportunity for a hearing prior to recovering funds from, or imposing sanctions upon, the vendor.[5] A vendor receiving an overpayment notice from DHS may challenge the notice by filing a written request of appeal and requesting a contested case hearing. This written request must be received by the commissioner no later than 30 days after the date the notification of monetary recovery or sanction was mailed to the vendor.[6]
In short, the legislature has established different service rules for DHS’s notice to the provider, which is complete upon mailing,[7] and the provider’s appeal of that notice, which is complete upon receipt.[8] DHS has no discretion to apply a different rule.
Fact Pattern
Identities have been changed, but the scenario below is based on a real case.
- Rest LLC provides personal-care assistance and is enrolled as a provider in the Minnesota Health Care Programs. DHS reviewed the claims submitted by Rest LLC and concluded that they had been overpaid $36,000.00.
- DHS issued an overpayment notice to Rest LLC via regular and certified mail on January 21, 2021. That notice told Rest LLC that its appeal must be received within 30 days of January 21 and provided an address to send its appeal should they choose to do so.
- February 22, 2021 was the 30-day deadline, and Rest LLC’s officer, Mike Gloverstone, testified that Rest LLC knew this.
- Rest LLC sent its appeal notice to the investigation unit that would be handling the administrative matter for delivery by February 22 via FedEx. However, the address of the investigation unit was not the address listed in DHS’s overpayment notice. And unfortunately, DHS did not receive Rest LLC’s notice of appeal until February 23.
- There was no dispute that Rest LLC intended to provide the appeal notice to the DHS by the deadline and that FedEx provided a guaranteed delivery date that would have complied the statute. There was also no dispute that the package was delivered only one day after the deadline expired.
The Aftermath
If DHS had discretion to evaluate whether Rest LLC substantially complied with the deadline, Rest LLC’s best efforts and FedEx’s guaranteed delivery would be relevant considerations.[9] But the statutory deadline is absolute, and DHS had no authority to vary from it, even if good cause existed to do so. Because the appeal was received by DHS later than the 30-day deadline, the administrative-law judge ruled that the appeal was untimely, DHS had no jurisdiction to consider it. As a result, the appeal was dismissed, and the $36,000.00 fine was upheld.
Final Thoughts
The old saying, “you can’t fight city hall,” exists for a reason. If you do fight city hall by filing an administrative appeal, you can’t play fast and loose with the deadlines and other rules governing your appeal. And if the stakes are high enough, you may want to hire a lawyer who navigates these deadlines and rules for a living.
If you have any questions regarding Minnesota’s administrative appeal process or any other litigation-related questions or issues, please contact Brendan M. Kenny at [email protected] or 952-746-2139.
[1] Leisure Hills of Grand Rapids, Inc. v. Levine, 366 N.W.2d 302, 304 (Minn. Ct. App. 1985). [2] E.N. v. Special Sch. Dist. No. 1, 603 N.W.2d 344, 347 (Minn. Ct. App. 1999). [3] Leisure Hills, 366 N.W.2d at 304; In re Emmanuel Nursing Home, 411 N.W.2d 511, 516 (Minn. Ct. App. 1987); see also Baldinger Baking Co. v. Stepan, 354 N.W.2d 569, 571 (Minn. Ct. App. 1984) (considering a statutory appeal deadline and stating “[n]o timely appeal was taken, and the appeal tribunal was without jurisdiction to hear an appeal.”). [4] Minn. Stat. § 256B.064, subd. 2. [5] Id., subd. 2(a) (“The notice required under subdivision 2 shall be served by certified mail at the address submitted to the department by the vendor. Service is complete upon mailing. The commissioner shall place an affidavit of the certified mailing in the vendor’s file as an indication of the address and the date of mailing.”). [6] Id., subd. 2(e). [7] Minn. Stat. § 256B.064, subd. 4(a). [8] Id., subd. 2(e). [9] See State by Spannaus v. Dangers, 368 N.W.2d 384, 385 (Minn. Ct. App. 1985, review denied (Minn. Aug. 20, 1985) (noting that the doctrine of substantial compliance requires consideration of whether a person took steps to comply with the governing statute, generally complied with the statute’s purpose, and has a reasonable explanation for the failure to strictly comply, as well as whether the other party had reasonable notice of the claim and has not been prejudiced.).
