TOWN OF ROCKY HILL v. SECURECARE REALTY, LLC, et al., SC 19275

Judicial District of Hartford

Sovereign Immunity; Whether Private Entities Seeking to Operate a Nursing Home Facility Under a State Contract are Entitled to Sovereign Immunity.  The defendants are private entities that seek to operate a nursing home facility in the town of Rocky Hill under a state contract in accordance with General Statutes § 17b-372a, which provides that the state may establish a nursing home facility to care for certain individuals who are in the custody of the Department of Correction or who receive services from the Department of Mental Health and Addiction Services.  The town brought this declaratory judgment action, seeking a declaration that the town’s zoning regulations prohibit the operation of the proposed facility at the location in question.  The defendants filed a motion to dismiss the action, arguing that they were entitled to sovereign immunity because, in seeking to establish a nursing home facility under § 17b-372a in accordance with a state contract, they were acting as an “arm of the state.”  Relying on Gordon v. H.N.S. Management Co., 272 Conn. 81, 98-100 (2004), which set forth the criteria for determining whether a corporate entity is an arm of the state, the trial court decided that the defendants were entitled to sovereign immunity.  The court reasoned that the defendants were created for the sole purpose of running the nursing home facility and that they would essentially be providing services on behalf of the state to individuals who would otherwise be receiving those services directly from the state.  The court also emphasized that the defendants are financially dependent on the state in that the state is the defendants’ only customer and is required to reimburse the defendants for all start-up costs as well as the costs incurred in running the facility.  The court further opined that, in light of the fact that the state will be generally liable for the costs of the facility, it will closely monitor the defendants’ expenditures and that any judgment that is rendered against the defendants will be, for all practical purposes, a judgment against the state.  The court also pointed out that the state has some right to control the defendants in that it has the authority to audit and challenge the defendants’ expenditures.  Based upon the foregoing factors, the court concluded that the defendants were in fact an arm of the state and were therefore entitled to sovereign immunity.  The court further rejected the town’s claim that it was entitled to invoke an exception to the doctrine of sovereign immunity, namely, that it has the right to enforce its local zoning regulations under the home rule provision of the state constitution.  The court reasoned that the operation of a nursing home facility under § 17b-372a is not an issue of purely local concern.  It added that the town’s delegated zoning authority is expressly preempted by § 17b-372a.  In this appeal, the Supreme Court will determine whether the trial court properly dismissed the town’s action on sovereign immunity grounds.