Canonsburg General Hosp. v. Burwell, No. 13-5370 (D.C. Cir. 2015)
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The Secretary issued regulations setting out reasonable cost limits (RCLs) for specified medical services and establishing certain exceptions to those limits. Canonsburg claimed that the Secretary has violated the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., because her method of calculation is inconsistent with governing regulations and was promulgated without notice and comment. In light of Canonsburg I, the district court granted
the Secretary’s motion for summary judgment, concluding that issue preclusion barred Canonsburg’s suit. The court concluded that the Secretary did not waive her issue preclusion
affirmative defense by not raising it at the administrative stage. Moreover, the Secretary asserted it, expressly and properly, in district court and the court is free to affirm the district court's application of the doctrine to Canonsburg's complaint. In light of the Supreme Court's plain language in SEC v. Chenery Corp. (Chenery I and II), the court's own construction of the Chenery doctrine and no persuasive case law to the contrary, the court concluded that the Chenery doctrine does not prohibit raising issue preclusion as an affirmative defense in district court even if the party raising the defense was not a party to the administrative proceeding or
was otherwise unable to assert the defense at the administrative stage. Finally, the court rejected Canonsburg's claims of equitable considerations. Accordingly, the court affirmed the judgment.
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