Full opinion text
TRIAL DECISION HALL, District Judge. In this action, the plaintiff, New England Health Care Employees Union, District 1199, SEIU/AFL — CIO (“District 1199”), seeks declaratory judgment and damages allegedly arising from the conduct of the defendants, the Honorable John G. Rowland (“Governor Rowland”), individually and in his official capacity as Governor of the State of Connecticut (“the State”), and Patricia Wilson-Coker, in her official capacity as Commissioner of the Department of Social Services, (collectively “defendants”), in connection with strikes by members of District 1199. District 1199 alleges that the defendants’ use of state power in connection with an ongoing labor dispute between itself and Connecticut nursing homes in 2001 interfered with its members’ rights protected by the National Labor Relations Act (“NLRA”). District 1199 further alleges that Governor Rowland violated its members’ First Amendment rights. The action is brought pursuant to 42 U.S.C. § 1983. The focus of District 1199’s complaint is the State’s payment of anticipatory subsidies to nursing homes for strike-related expenses under the umbrella of the Medicaid program. The State acknowledges that it funded nursing homes, according to the Medicaid portion of its strike-related expenses and before any cash outlay by the nursing home, but contends that its actions fell within its discretion to administer the State Medicaid program in order to safeguard the health and safety of nursing-home residents. The essence of the dispute is whether the Medicaid subsidies conflict with the rights of District 1199’s members under the NLRA; the scope of the State’s discretion, if any, to administer its Medicaid program; and whether the State acted within its discretion by providing anticipatory Medicaid subsidies to nursing homes. Although in opposition in this case, the parties before the court stand unified in the often uncelebrated task of caring for frail, elderly members of our society. The State struggles to satisfy its legal and moral obligations to indigent nursing-home residents, while, every day, members of District 1199 work tirelessly to fulfill their exhausting and difficult duties. Accordingly, although this case focuses primarily on the legal complexities of NLRA preemption, the court in its decision does not mean to overlook the laudable efforts of all parties when those efforts are undertaken in service of the people of the State of Connecticut. I. FINDINGS OF FACT The State has currently licensed approximately 250 nursing homes, with 30,000 licensed nursing-home beds. District 1199 represents approximately 7000 union members who are employed at seventy-one nursing homes in Connecticut. Some members are employed as registered nurses, licensed practical nurses, nurses’ aides, or housekeepers. Other members work in maintenance, laundry, clerical, or other positions. Since 1999, the State has had a shortage of available nursing personnel, at all levels of certification and training, to work in nursing homes on a permanent or temporary basis. A job action involving several thousand replacement workers is beyond the capacity of the local private agencies, which number approximately two dozen and individually could only handle a demand in the range of 20-100 replacement personnel. The availability of staff from local agencies, during a strike, would be reduced further because local workers are often unwilling to cross picket lines. During March and May 2001, District 1199 engaged in two job actions at forty nursing homes. Approximately seventy-six percent of the residents in the nursing homes affected by the strikes at issue in this case are covered by the federal Medicaid program. The percentage of residents receiving Medicaid at those nursing homes ranged from fifty-six to ninety-four percent at the time of the strikes in question. During the 2001 labor dispute, the State provided anticipatory subsidies, proportionate to a nursing home’s Medicaid population, for the employer’s strike-related expenses. A. Regulatory Background and Past Practice Nursing homes have the primary legal obligation to provide for the health and safety of their residents. Connecticut nursing homes are regulated by the State under the auspices of the Department of Public Health (“DPH”). DPH establishes and monitors the level of care and staffing required to maintain the safety, health, and welfare of nursing-home residents. DPH is responsible, under state statute, for assessing the care and services provided to nursing-home residents to determine whether nursing homes properly care for their residents’ health, safety, and welfare. DPH inspects nursing homes to assess compliance with federal and state Medicaid and Medicare mandates on patient care and issues reports on those inspections. In addition, DPH determines whether a nursing home complies with laws and regulations for state licensure and federal certification. When nursing homes are not in compliance, DPH may issue letters ordering the nursing home to take immediate steps to remedy the non-compliance. DPH can also issue fines for noncompliance and can take steps to revoke or limit an operator’s nursing-home license. If DPH determines that a nursing home has financial difficulties that affect its ability to care for its residents, the agency communicates that concern to the Department of Social Services (“DSS”), which handles fiscal issues related to nursing homes. The State, through DSS, reimburses nursing homes for the cost of the food, shelter, and medical care of residents covered by Medicaid. The federal government reimburses the State for fifty percent of its allowable Medicaid costs. Approximately ten percent of the State’s budget is spent on Medicaid for nursing homes. DSS reimburses each Connecticut nursing home for care provided to Medicaid-eligible residents in accordance with the facility’s “base rate.” Each facility’s “base rate” is determined by DSS periodically under a methodology that utilizes the historical costs of providing care at that particular nursing home. DSS establishes a facility’s historical costs according to annual reports provided by the facility, which reports itemize all expenditures for the fiscal year ending on September 30. State law provides for calculation of each facility’s base reimbursement rate once every two to four years. State law caps spending in many areas, which caps affect the provision in the law that allows reimbursement for reasonable costs mandated by collective bargaining agreements. DSS has had to advance monies from future Medicaid per diem payments to nursing homes having cash flow problems and without the resources to pay their bills, including payroll. These payments are based on the need to ensure that the care of residents is maintained at the levels required by both the federal and state governments. DSS has made such advance reimbursements under the “good cause” provision of the State’s Medicaid Plan and Connecticut General Statutes § 17b-340., Before the 2001 job actions, nursing homes preparing for a strike had made alternative preparations for the care of residents: obtaining volunteers, hiring temporary replacement workers, or requiring supervisors to provide resident care. In some instances, nursing homes moved residents, stopped admitting new residents, or otherwise curtailed operations. During previous nursing-home strikes, the State has sent inspectors or monitors to the nursing homes to ensure that nursing-home operators continued to provide residents with adequate care during the strike. In addition, if a strike jeopardized the health and safety of nursing-home residents, the State, through the DPH Commissioner, could seek the appointment of a receiver, stop admissions, move nursing-home residents, or limit the license of a nursing home. To ensure the safety of nursing-home residents during a strike, Connecticut law requires that nursing homes submit strike contingency plans to DPH. The contingency plans include: the name and contact information for key personnel at the nursing home, including a liaison to the State for the duration of the strike; telephone numbers and other contact information for local emergency services, utility providers, and suppliers for medical services and supplies; descriptions of current residents, including census and diagnoses; details regarding staffing patterns expected during the strike and sources for replacement workers; security and transportation plans for residents, staff, and supplies; and other information necessary to ensure uninterrupted services. DPH does not require that nursing homes provide any financial data or sources of funding as part of the contingency plan. DPH has not shared the contingency plans with other agencies, but it has provided other agencies with summaries of the information in the nursing homes’ plans. DPH reviews the contingency plans to ensure compliance with minimum staffing requirements and other state and federal regulations. Also, DPH verifies the availability of sufficient staffing at listed sources for replacement workers. Although DPH does not interfere with a nursing home’s choice of provider for replacement workers, the agency coordinates providers in the event of multiple struck facilities in order to ensure available staffing for all affected nursing homes. Absent problems with implementation of a nursing home’s contingency plan, DPH considers the health and safety of the residents adequately protected once it verifies and approves the contingency plan. To ensure effective implementation, DPH monitors nursing homes on a daily basis during strikes. B. First Use of Extraordinary-Cost Reimbursements: The 1999 Strike Notices In anticipation of strikes by District 1199 in early 1999, the Office of Policy and Management (“OPM”) convened a meeting, in the fall of 1998, of various state agencies to establish an inter-agency contingency plan. Agencies, such as DPH, DSS, the Office of Emergency Management (“OEM”), the Department of Mental Retardation, the State Police, and the Department of Transportation (“DOT”), developed plans describing what actions they would take in the event of a strike. As a result of the inter-agency planning, a report was prepared outlining each agency’s responsibilities. The plan included specific steps that would be taken in order to ensure that the care of nursing-home and group-home residents during any strike satisfied applicable law and regulations. In February 1999, during the last significant round of new contract negotiations between the nursing homes and District 1199, District 1199 sent out ten-day strike notices to forty-seven nursing homes. Just prior to the reported strike date, the Governor announced that he was proposing an approximately $200 million increase in funds for wages and benefits in the nursing-home industry. While the Governor’s announcement averted strikes at most nursing homes, District 1199 did strike some nursing homes where contracts could not be negotiated. Before the Governor’s announcement, the State had not addressed whether extraordinary-cost reimbursements for strike-related expenses, including contract retainers for replacement workers, were necessary to ensure the health and safety of residents of the targeted homes. However, while the 1999 strike was pending, DPH, in verifying sources for replacement workers, identified a shortage of available staff at the nursing pools listed in the nursing-home contingency plans. After the Governor’s announcement and in discussions with Michael Starkowski (“Star-kowski”), Deputy Commissioner of DSS, concerning the financial condition of some nursing homes and their need for reimbursement of expenses related to resident care, Mark Ryan (“Ryan”), the Secretary of OPM, determined that the State had the financial resources to reimburse nursing homes for the Medicaid portion of strike-related expenses. Ryan and Starkowski believed that the reimbursements were necessary in light of the staffing shortages at nursing pools. They concluded that the shortages increased the costs for replacement workers, by either driving up the cost of local nursing pools or by forcing nursing homes to use expensive out-of-state contractors. In providing extraordinary-cost reimbursements for strike-related expenses, the State relied on the language in Conn. Gen.Stat. § 17b-340 for payment of “extraordinary and unanticipated costs.” Pri- or to 1999, DSS had not invoked that statutory language, or reimbursed on other grounds, strike-related expenses: it had only paid the nursing homes’ daily rate. Moreover, the State has never, before or since, utilized section 17b-340 to fund the costs of collectively bargained contracts. In 1999, DSS did not send a notice to nursing homes that reimbursement was available. Starkowski received and processed, on an ad hoc basis, extraordinary-cost reimbursement requests under Medicaid for strike-related costs paid by nursing homes and attributable to the Medicaid portion of their population. In calendar years 1999 and 2000, the State paid $723,254 to sixteen nursing homes for these strike-related reimbursements, including non-refundable deposits for replacement workers and security. District 1199 was unaware of the State’s payment of these extraordinary-cost reimbursements. C. Preparation for the 2001 Labor Dispute In September 2000, Jerome P. Brown (“Brown”), President of District 1199, met with Ryan and Starkowski to review Brown’s demands, particularly with respect to increases in nursing-home wages and benefits and staffing improvements. At the meeting, Brown discussed increased contract costs of approximately five or six percent. Although a budget proposal had not been made to the legislature, the state officials knew that the Governor was considering funds for an estimated 2/£ % rate increase. Ryan and Starkowski concluded, but did not inform Brown, that, in light of Brown’s demands and the State’s budget situation, there was very likely going to be a strike in 2001 that could simultaneously impact over forty nursing homes, which had a common contract expiration date of March 15, 2001. The State and the nursing-home industry began strike preparations. Ryan first discussed with Governor Rowland, in October 2000, the payment of anticipatory subsidies to nursing homes for estimated strike-related costs in connection with possible strikes in 2001. On October 17, 2000, state officials met with representatives of the nursing-home industry to discuss the nursing-home contingency plans and to inform industry representatives that DSS, DPH, and other state agencies would notify nursing homes of the deadline for and the content of the contingency plans. On November 21, 2000, state officials met again with nursing-home representatives and discussed, among other things in anticipation of a strike by District 1199, how the nursing homes would obtain a sufficient number of replacement workers. The Connecticut Association of Health Care Facilities (“CAHCF”) informed Ryan that it was contemplating the formation of a new corporate entity to contract with U.S. Nursing Corporation for replacement workers in the event of a strike. During these meetings, Toni Fatone (“Fatone”), CAHCF’s Executive Director, informed state officials that the nursing homes with expiring contracts were financially vulnerable, given them cash-flow situation as a result of the history of Medicaid funding in the past ten years, and that the majority of the nursing homes were in bankruptcy proceedings. When Fatone made these statements to state officials, she did not provide specific information about individual nursing homes. She also did not have evidence that all the affected nursing homes were financially vulnerable. Fatone’s information was based on her episodic experience collecting CAHCF dues from the nursing homes and conversations with the majority of the owners affected by the anticipated job action. Fatone also explained to state officials the necessity of contracting with out-of-state replacement workers, in light of the worker shortage at local nursing pools, but she commented on the financial difficulty most nursing homes would confront because the out-of-state agencies required payment in advance of services. Throughout 2000, Fatone, as a representative of CAHCF, had explored the working shortage in local nursing pools with representatives of other hospital and nursing-home associations. Based on difficulties obtaining sufficient staff on any given day, Fa-tone believed that a job action involving several thousand replacement workers was beyond the capacity of the local agencies. Further, Fatone believed that the availability of staff from local agencies would be reduced because local workers were unwilling to cross picket lines. Accordingly, Fatone concluded that nursing homes had to rely on out-of-state replacement workers to maintain staffing levels for any job action on the scale anticipated. On December 4, 2000, Ryan, in anticipation of a strike, called a meeting of various state agencies, including representatives from DPH, DSS, the Department of Mental Retardation, OEM, the State Police, the State National Guard, and DOT, to update their 1999 contingency plans. Some individuals present at the meeting expressed concerns about the availability of temporary replacement workers. DPH representatives talked about the process for license renewals and the certification of out-of-state nurses. At the December 4 meeting, Ryan indicated that, based on the legislative priorities of the Governor and the executive branch, he did not foresee increases in the Medicaid budget similar to those in 1999. He expressed his opinion that the legislature would not add more money to the Medicaid appropriation. Ryan explained, however, that money would be available to ensure patient care during a strike. On December 22, 2000, DSS managers met to discuss the agency’s role in the event of a strike. They agreed that DSS would prepare a pamphlet for families of nursing-home residents explaining what was happening. They also discussed the long-term-care ombudsman’s role in order to make sure that any complaints were addressed and that the residents for whom DSS has been appointed as conservator were going to be monitored. In its planning process, DSS considered some alternatives for handling the cost of replacement workers for the affected nursing homes. DSS discussed whether it was appropriate for the State itself to contract with a replacement-worker service in the event of a widespread strike, but ultimately rejected the idea as inappropriate. Similarly, DSS rejected as inappropriate a proposal to contract with CAHCF to have it obtain replacement workers. The State also considered advancing money to the nursing homes from future daily-rate payments. The State rejected that proposal because state officials, looking at the affected nursing homes as an undifferentiated group, considered the facilities too financially fragile to survive in the future without the full daily rate; they concluded that any repayment schedule would be burdensome and financially debilitating. Before the March job action, DSS contacted the Health Care Financing Administration (“HCFA”), the federal agency overseeing Medicaid, to determine whether strike-related, nursing-replacement expenses would be reimbursable costs under the Medicaid program. Based on the information provided by DSS, the HCFA official responded informally that the expenses should be reimbursable. DSS subsequently submitted claims for the anticipatory subsidies, which HCFA has processed. The costs paid by the federal government remain subject to audit. In late December 2000 and continuing in January and February 2001, state officials met, as part of an inter-agency task force, to further prepare for a possible strike and for oversight of residents’ health and safety in the event of a strike. Agency representatives reported on their agency’s contingency plans as those plans were updated or revised. The State’s comprehensive contingency plan was titled Health Care State Support Plan 2001. On December 27, 2000, state officials met with several nursing-home operators, their attorneys, and CAHCF representatives to discuss contingency planning in the event District 1199 called a strike. State officials told industry representatives that the State would do everything possible to ensure the safety of the residents in struck nursing homes. Ryan informed nursing homes that Governor Rowland would propose a flat percentage increase for fiscal year 2002 for all nursing homes (union and non-union) in his upcoming budget and that there would be no additional funding. On January 3, 2001, DSS officials met with Brown and Leslie Frane, Vice President of District 1199, at Brown’s request. Brown asked the Commissioner of DSS if the agency could exert some influence in order to get more money so that strikes could be averted. Brown indicated the likelihood of strikes in light of the present circumstances, and DSS informed Brown that the State would not change its recommendation on budget appropriations. The Commissioner indicated that DSS had a responsibility to take steps to protect the health, safety, and welfare of the nursing-home residents and that the agency would take whatever measures it needed to fulfill that obligation. Unaware of the full extent of the State’s preparations, Brown indicated that he would do what he had to do for his members. In early January 2001, to increase efficiency and limit liability, CAHCF created a subsidiary, CAHCF Assistance Corporation, that contracted with U.S. Nursing to provide replacement workers in anticipation of District 1199 strikes. Members of this corporation paid the initial retainer fee to U.S. Nursing. In January, the corporation established a committee called the Union Task Force composed of some of the employers whose union contracts would expire on March 15, 2001. The Union Task Force consisted of CAHCF members, such as Genesis, Kindred, Lexington, Roncalli, and Atrium Plaza, and CAHCF non-members, such as St. Mary’s Home, Jewish Home, Olympus, Mariner, and Affinity. The Union Task Force met regularly throughout the 2001 labor dispute, and Fatone frequently attended those meetings. In January 2001, Brian Mattiello (“Mat-tiello”), Undersecretary of OPM, was assigned responsibility for oversight of the Health Care State Support Plan (“Comprehensive Plan”). He worked with OEM to coordinate inter-agency response to the possible strikes. OEM facilitated meetings among affected state agencies and developed a comprehensive plan for responding to the potential strikes at 51 nursing homes and approximately 169 group homes. OEM, in conjunction with OPM, coordinated and reviewed the plans of the state agencies to ensure that they were adequate to address all possible contingencies during a nursing-home strike. For example, anticipating a large-scale job action, DPH sought to avoid later logistical and other planning contingencies that could unnecessarily endanger the health and safety of nursing-home residents if DPH failed to complete its obligations because of staffing or time constraints. DPH, therefore, gathered data from nursing homes about the number of staff, facilities, and residents that would be impacted and the resources available to those facilities. In addition, DPH reassessed its deadlines for strike contingency plans from the nursing homes so that it would not be forced to review forty strike plans in the five days preceding the strike. In order to accommodate the anticipated demand for personnel, DPH also solicited and trained employees from outside the Division of Health Systems Regulation to function as strike monitors. As the planning process progressed, DSS became concerned that some nursing homes with expiring contracts would not be financially capable of paying strike-related costs. Eleven of the affected homes were either in Chapter 11 bankruptcy proceedings or had just emerged from bankruptcy, and eight homes had interim-relief requests that had been pending at DSS six to eight months without action. Some nursing homes, however, had the financial stability to pay strike-related expenses without anticipatory subsidies from the State. Relying largely on representations from Fatone, DSS decided that, in light of the financial troubles at some nursing homes and the scale of the anticipated strike, the only viable option was obtaining replacement workers. The State briefly considered, but rejected, other options, such as placing some of the struck nursing homes in receivership, moving some residents out of struck homes to other facilities, and ceasing new admissions. Given its conclusion that the nursing-home industry would require a large number of replacement workers in 2001, DSS further concluded that an out-of-state contractor was the only viable source for replacement workers. In light of the significant costs for out-of-state replacement workers and the financial troubles at some nursing homes, DSS decided that it would provide extraordinary-cost reimbursements for strike-related costs, including expenses for replacement workers. Further, concerned that some nursing homes would not be able to pay U.S. Nursing’s charges in advance as required by the contractor, DSS, with the approval of Ryan, determined that anticipatory subsidies were necessary in order to ensure that the level and quality of care and services for the nursing-home residents complied with DPH requirements. In making assessments about the quality of nursing-home care in the event of a strike, DSS did not request or review the nursing-home contingency plans before approving payment of these anticipatory subsidies, even though DPH considers the health and safety of residents protected once it approves a nursing home’s strike contingency plan. In providing anticipatory subsidies, the State made no effort to determine whether payments were necessary to protect the health and safety of residents at any particular home. State officials approached the issue of extraordinary costs under section 17b-340 by viewing the statewide job action as a whole. The State concluded, largely based on its agents’ intuition, that anticipatory subsidies were justified without considering the circumstances of individual nursing homes. The State had no formal process for determining if the costs were appropriate; according to Ryan, “it’s one of those gut check things.” Tr. at 861 1.17. The court finds that lack of staff as a result of a job action poses an immediate threat to the health and safety of a nursing home’s residents. In 2001, the size of the anticipated strike eliminated any option to avoid that threat, other than hiring replacement workers as a response to the expected lack of staff. Approximately 4000 employees engaged in the work stoppage at the forty nursing homes receiving strike notices. Those forty nursing homes house approximately 5200 residents who receive care twenty-four hours a day, seven days a week. Most of those residents require constant supervision, assistance with personal care, multiple medications at varying times, and special diets; many are immobile or require assistance with mobility; many are mentally incompetent; and many require special medical equipment. Local nursing pools could not accommodate the needs of the nursing homes that would be affected by the anticipated strike. In order to secure replacement workers before the March job action, nursing homes had to rely on out-of-state replacement workers. Additional expenses, such as food, lodging, and transportation, and a nationwide nursing-staff shortage drove up the cost for out-of-state replacement workers. Further, U.S. Nursing, the out-of-state contractor for replacement workers used by almost all nursing homes during the 2001 labor disputes, required that nursing homes pay for worker expenses before services were rendered. If a nursing home did not have the financial ability to pay these costs in a timely fashion, the inability to employ replacement workers would threaten resident health and safety. The State, however, authorized payments in February 2001 without considering an individual nursing home’s financial need for a subsidy in order to provide adequate care during a strike. Starkow-ski claims that DSS did not have sufficient time or staff to complete an assessment of financial need at individual facilities. However, it was known to the State in the fall of 2000 that a statewide strike was highly likely in light of the union’s demands and the Governor’s position on the budget. During that period, DSS could have, as DPH did, gathered preliminary information necessary to its decision-making, set deadlines to avoid unnecessarily imposing time constraints on itself, and reassigned employees or sought assistance from other departments for adequate personnel to handle the anticipated workload. On February 7, 2001, to ensure funding for the anticipatory subsidies, Governor Rowland submitted a supplemental budget to the legislature that included a $5 million line item to cover contingency planning costs of state agencies and nursing homes. These contingency planning costs, which included the worker replacement expenses, were in anticipation of possible nursing-home strikes by District 1199 following expiration of its contracts. The budget also allocated funds for an estimated 2-J& % increase in the nursing homes’ daily rate. On the same day the Governor submitted the supplemental budget, DSS sent a memo to nursing homes with expiring union contracts notifying them of the agency’s intention to provide anticipatory subsidies for the Medicaid portion of any strike-related costs, including worker replacement costs, as “extraordinary and unanticipated.” DSS viewed the strike-related costs as allowable costs under Connecticut General Statutes § 17b-340. To that end, the February 7, 2001 memo advised nursing-home owners what extraordinary expenses would be subsidized in the event of a potential strike or job action. DSS did not promise to cover all strike-related costs, but only those costs that were “extraordinary and necessary for the health and safety of residents.” The memo advised the nursing homes how DSS would pay extraordinary or unanticipated costs to avoid an immediate negative impact on the welfare, health, and safety of the nursing-home residents. The memo further notified the nursing homes that they had to comply with the obligations of the NLRA. DSS reserved the right to recover all or, if appropriate, a portion of the anticipatory subsidy if the National Labor Relations Board (“NLRB”) determined that a nursing home had engaged in unfair labor practices. In preparation for the March 20, 2001 strike and pursuant to the Comprehensive Plan, DOT identified parking facilities on state-owned property where non-striking nursing-home employees and replacement workers could park and be transported to and from nursing homes affected by the strike. The facilities were mostly commuter parking lots. DOT also leased fifty commuter vans at a cost of approximately $200,000 to transport replacement or nonstriking workers from the state parking areas in the event the nursing homes were unable to do so. When these expenses were incurred, DOT had no basis to believe that the nursing homes, which had the primary legal obligation to handle transportation and security, could not provide these services. From January through March 20, 2001, District 1199 met with nineteen nursing-home owners operating fifty-one nursing homes in an effort to negotiate successor contracts to agreements that expired on March 15, 2001. Those negotiations failed to result in any successor contracts by March 20, 2001. D. The March 2001 Strikes On March 6, 2001, District 1199 gave written notification to forty-one of the fifty-one Connecticut nursing homes whose contracts would expire on March 15, 2001, of District 1199’s intention to strike on March 20, 2001, beginning at 6:00 a.m. District 1199 scheduled the strike to protest the lack of progress in negotiating new contracts and the owners’ unwillingness to increase staffing in their nursing homes. Shortly after the written notification, District 1199 advised its members that the nursing homes would be struck for only one day, until 7:00 a.m. on March 21, 2001. On March 15, 2001, District 1199 withdrew its strike notice from one of the nursing homes. Also, on March 15, Brown and District 1199 obtained a copy of the February 7, 2001 memo from DSS to the nursing homes concerning anticipatory subsidies for strike-related expenses. On March 16, District 1199 advised the nursing-home owners in writing that it intended its strike to last only twenty-four hours. After receiving the notice of District 1199’s intention to strike, various nursing-home owners, through agreements facilitated by CAHCF, sent staffing orders for replacement workers to U.S. Nursing Corporation, a company located in Colorado. U.S. Nursing required that the nursing-homes guarantee payment for sixty hours of work for the replacement workers for the first week and forty-eight hours of work per week thereafter. U.S. Nursing also required a retainer fee and advance deposits before it would commit replacement workers. Before the strike, the nursing homes notified District 1199 that they intended to continue to provide services to nursing-home residents and that they would bring in replacement workers. On March 20, 2001, at 6:00 a.m., the District 1199 and its members engaged in a strike at forty nursing homes. No violence occurred during the strike. At the end of the one-day strike, on March 21, 2001, sixteen of the struck nursing homes refused to permit the striking employees to return to work. On March 22, 2001, fifteen nursing homes continued to refuse to permit the striking employees to return to work. On March 23, 2001, thirteen nursing homes refused to permit striking employees to return to work and continued such refusal until Sunday, March 25, 2001, at 6:00 a.m. On March 20, 2001, and on the succeeding days when some District 1199 members were locked out, members of District 1199 and their supporters peacefully picketed the nursing homes. 1. Picketing and Public Safety Before the March job action, District 1199 communicated to local police officials that they intended to obey the lawful orders of the police. On March 7, 2001, Brown met with Lieutenant Colonel Timothy Barry (“Barry”) of the Connecticut State Police to discuss District 1199’s strike plans. At that time, Brown expressed District 1199’s intention to conduct peaceful, orderly picket lines. Colonel Barry and Brown have had a cordial and friendly professional relationship that dates back at least eight years. They have worked together to accomplish their respective goals without interfering with the other’s objectives. For example, when Colonel Barry was a troop commander, he helped Brown stage a public arrest for evening news coverage in exchange for Brown assuring that picketers would carry a driver’s license or other identification and conduct themselves peacefully. Colonel Barry arrested fifty individuals, paraded them in front of television cameras to a police van, issued citations with a unified court date, and released the individuals without taking them into custody. Over the years, Colonel Barry and Brown have developed informal methods to maintain and protect public safety and order during District 1199 job actions. Before and during the 2001 labor dispute, the State had no evidence that District 1199 posed a danger of violence or destruction of property. During the 2001 labor dispute, District 1199 was free to picket and demonstrate anywhere. District 1199 scheduled and held numerous rallies and mass picketing at the State Capitol, at the Governor’s offices around the State, and at the Governor’s residence. District 1199 expressed its views during the strikes. Moreover, the State Police and District 1199 leaders coordinated larger demonstrations and the arrest of protestors as part of District 1199’s efforts to elicit support from the public and state legislators. 2. Finances and Anticipatory Subsidies Starting on March 14, 2001, six days before the announced strike date, DSS paid anticipatory subsidies to nursing homes to enable them to meet their estimated strike-related expenses. The State did not examine the financial circumstances of the nursing homes individually to determine whether each nursing home required anticipatory payments in order to fulfill its legal obligations to protect the health and safety of residents during the March job action. On March 14, 2001, DSS made payments totaling $2 million to cover strike-preparation costs at the struck nursing homes. In the end, for the March strikes, the subsidies totaled $4,561,000. The cost of securing replacement workers to fill direct-care positions was used as the basis for estimating each nursing home’s strike-related costs because DSS believed it was likely to be the largest expense. Subsidies for strike-related costs included expenses incurred by nursing-home owners for a per diem subsistence rate and lodging for replacement workers. The estimated calculation began with the projected cost of contracting with U.S. Nursing, then added thirty percent as an estimated factor for the additional cost of personnel in non-nursing positions and added fifteen percent as an estimated factor for other costs. These other costs included security, laundry service, and food service during the strikes. DSS then reduced the subtotal by the estimated payroll savings from not paying the striking workers on March 20, 2001 and subsequent days they were on strike or prevented from working by the nursing homes. Because Medicaid utilization at the forty affected facilities ranged from fifty-six to ninety-four percent, the anticipatory Medicaid subsidies represented fifty-six to ninety-four percent of the estimated strike-related costs. For some nursing homes, their non-Medicaid share of the expenses was significant. For example, for the March 20 strike, Olympus Healthcare Group incurred costs of approximately $250,000 that were not paid for or later reimbursed by DSS. For other nursing homes, the expenses not covered by DSS strike payments were considerably less significant. For example, iCare, which has a ninety-five percent Medicaid population, was eligible for anticipatory subsidies of ninety-five percent of its strike costs. After the one-day strike ended, the State informed nursing homes that it would pay the full daily rate for nursing homes that allowed union members to return to work, in addition to the anticipatory subsidies already paid for the replacement workers during the sixty-hour minimum retainer period. Depending on a nursing home’s Medicaid population, however, the State’s offer did not relieve the financial burden of paying both expenses because facilities still had to pay the non-Medicaid portion of the union members’ and the replacement workers’ payroll, if striking workers returned. 3. “Safety Net” As part of the Comprehensive Plan developed by the State for the 2001 labor dispute, and on the order of the Governor, three National Guard units were activated. During the course of the March 20, 2001 strike and the succeeding days when some members of District 1199 were locked out by nursing-home owners, non-uniformed members of one National Guard unit drove vans to transport non-striking nursing-home employees and replacement workers to and from struck nursing homes. National Guard personnel transported hundreds of individuals during the March and May strikes. Two other National Guard units, composed primarily of medical personnel, were on stand-by to provide direct care on an emergency basis in the event the health and safety of residents were threatened because the nursing homes were unable to maintain the required levels of care for then residents. The members of the medical teams remained stationed at National Guard facilities and were not sent to any nursing homes during the March 2001 strike. The National Guard was not otherwise present in any capacity during picketing by District 1199 members and supporters. However, the State had never deployed the National Guard in any capacity during prior job actions in Connecticut. During the March job action, DPH employees closely monitored each struck facility to ensure that the care of the nursing-home residents complied with federal and state laws and regulations. Monitoring required a significant undertaking with DPH inspectors who made multiple visits each day to each struck nursing home. Additionally, nursing homes were monitored by OEM to ensure that staff arrived on time, that there were adequate levels of staff, and that any issue involving a resident was addressed and corrected. If OEM received a complaint about resident care, DPH was dispatched to investigate the situation and ensure that residents received proper care. Also, in order to maintain resident care, and after fully exploring all other options, the State was appropriately prepared to intervene if U.S. Nursing failed to meet its contractual obligations. During the course of the March 20, 2001 strike and the succeeding days when members of District 1199 were locked out, and pursuant to the Comprehensive Plan, Connecticut State Police troopers were assigned to perform traffic, crowd control, and related security functions at the four nursing homes located in communities without local police departments. They escorted replacement workers and worked with local police departments, as requested. The State Police also monitored the parking lots that were used as meeting areas and parking facilities. DOT also executed its portion of the Comprehensive Plan. Although the nursing homes are responsible for transporting replacement workers and non-striking workers who elect to use the common sites, the vans rented by DOT transported workers if the transportation provided by the nursing homes failed or was not provided in a timely manner, in order to ensure that workers arrived at the nursing homes. The vans were also used to transport individuals who were concerned about their safety in getting to and from the nursing homes. At the command center in Hartford, OEM maintained an hour-by-hour log that reported the conditions at the nursing homes, strike-related events, complaints about resident care, and follow-up visits. OEM also monitored for possible problems that might arise with replacement workers to ensure that they arrived on time and worked only the number of hours that it was safe for them to work and to ensure that OEM was aware of the safety concerns of strikers and the public. Mattiello relied on Fatone for information with regard to the nursing homes and used her as an intermediary for communicating with the facilities. OEM provided the information it collected to persons monitoring the strikes and submitted reports to Peter El-lef (“Ellef’), then-Co-Chief of Staff for the Governor. E. The May 2001 Strikes After the March strikes, District 1199 continued to negotiate with the nursing homes without success. In late April 2001, District 1199 again sent out ten-day strike notices for strikes to commence May 1, 2, and 3. In anticipation of the May 2001 strikes, DSS requested that nursing homes provide financial information, including balance sheets, cash-flow projections, estimates of strike costs, and information on other available sources of funding, so DSS could determine whether the nursing homes needed anticipatory subsidies for strike-related expenses. DSS also had historical financial information on nursing homes based on regular financial reports and data provided with prior requests for interim-rate relief. The Certificate of Need unit in DSS undertook some effort to analyze the financial needs of the nursing homes to determine whether each home needed anticipatory subsidies in order to secure replacement workers. Based on its limited assessment of St. Mary’s and Mariner’s financial stability, DSS determined that those nursing homes had the ability to pay the Medicaid portion of their replacement worker costs without an anticipatory subsidy. When the strike started in May, DSS provided anticipatory subsidies to all nursing homes, as requested, except for the two. However, the state did not present evidence sufficient to show what information was reviewed and considered for each home. Based on the inadequate record, the court does not find that, with regard to those nursing homes to which anticipated subsidies were made in connection with the May strike, DSS did so in each instance based on an individual assessment of each nursing home’s need for such payment to avoid an immediate threat to residents’ health and safety. Although DSS did not fully evaluate each nursing home’s financial stability before the strike, the Certificate of Need unit will conduct post-strike audits of the expenses incurred to determine which expenses will be allowed and will be disallowed. If DSS provided funds in excess of allowable expenses, the agency will recoup those overpayments in future daily-rate payments. As of trial, DSS had not finished its audit of the strike-related expenses. During the May job action, DPH, DSS, OEM, and the State Police operated twenty-four hours a day, seven days a week, in part to ensure that there were sufficient workers available at the nursing homes. During the May strike, however, the role of the DOT was reduced, as was the role of the National Guard for providing transportation. The number of staging areas for non-striking employees and replacement workers was also reduced. However, National Guard members did perform limited medical duties. They were sent to a few homes in order to stabilize the staffing levels when DPH informed OEM that replacement workers did not show up at a shift change and expressed concerns to OEM about the quality of patient care in light of the resultant staffing shortage. Before contacting OEM with regard to staffing problems, DPH consulted with the nursing home about other available credentialed workers, including appropriate overtime staff, administrative staff, and workers from related facilities. If the nursing home could not provide a satisfactory response regarding available staff, DPH contacted OEM. OEM in turn contacted U.S. Nursing about the availability of other replacement workers before sending personnel from the National Guard. During the May job action, the threat of permanent replacement workers by nursing homes intensified the labor dispute. After the March strikes, District 1199 learned that owners of more than twenty nursing homes might hire permanent replacements in the event of another strike. District 1199 contacted DSS to determine whether the State would provide anticipatory subsidies for nursing homes that hired permanent replacements. DSS notified District 1199 that subsidies for temporary replacement workers would continue, but that any costs for permanent replacements would be handled through a nursing home’s daily rate. Subsequently, during the May job action, many nursing homes informed District 1199 that they had hired permanent replacement workers and that they could not be immediately displaced, if District 1199 offered to return all of the strikers to work at one time. Fatone learned from some nursing home owners that permanent replacements had been hired and conveyed that information to the State. On May 14, 2001, District 1199 convened a statewide meeting at which the ongoing strike was discussed. Union officers told District 1199 members that its strikes were futile in light of the State’s anticipatory subsidies and the nursing homes’ efforts to obtain permanent replacements. Also, although the Democratic leadership of the legislature had told union officers that they would publicly propose additional funding for nursing homes in the budget process, union officials were disappointed with lack of action by the legislative leaders in addressing the executive branch’s anticipatory payments to the nursing homes. The union officers recommended that District 1199 offer to end the strikes and return to work. At the meeting, District 1199 members voted to return to work, despite the lack of contracts. District 1199 issued written offers to return to work “as a group,” which offers were rejected by most of the nursing-home owners involved. In response to District 1199’s offer, some nursing homes locked out District 1199 members. Some nursing homes settled. At other facilities, District 1199 agreed to return to work while negotiations continued. State officials met with Fatone to discuss the various responses by nursing homes to District 1199’s offer to return to work. The State decided to continue anticipatory subsidies, even for facilities that refused to allow striking employees to return to work. By late May, only one nursing-home owner, iCare, continued to lock out District 1199 members. In light of other settlements and District 1199’s offer of similar terms to iCare, the Governor and other state officials concluded that iCare was being intransigent and should be pressured to return to the negotiating table. Ryan testified that iCare’s intransigence was just not fair. Tr. 788, 1. 18-19. As Starkowski put it: “Let’s call this, let’s tell them, come on, move it.” Tr. 272, 1. 11-12. The State warned iCare, through Fa-tone, that it would cease anticipatory Medicaid subsidies. Ninety-five percent of iCare’s residents were Medicaid eligible. On June 1, iCare sent a written objection to DSS. State officials had no assurances that iCare would immediately settle with District 1199 if anticipatory payments ceased, but they had a “gut feeling” that iCare would settle quickly. The State knew that the health and safety of the residents might be jeopardized, but the State did not have plans in place if iCare did not settle and the continued strike threatened the health and safety of residents. Further, before the State stopped the payments, it did not explore any alternatives that would maintain the health and safety of the residents. After the State ceased the anticipatory Medicaid subsidies, iCare settled with District 1199 on its offered terms within a few days. The May job action ended on June 5, 2001. F. Negotiations When negotiations with nursing homes began, in anticipation of the contracts expiring in March, District 1199 demanded wage increases, improved benefits, and additional staffing at facilities. Although state officials had concluded that the union’s negotiations were futile in light of the Governor’s proposed budget and had conveyed that information to the nursing-home owners, state officials never explained to Brown or any other union official the State’s strict adherence to the Governor’s budgetary policies. Further, before the March job action began, no state official described the extent of the State’s preparation for the strike and the steps it was willing to take, in particular the use of anticipatory subsidies, in order to maintain the integrity of the proposed budget and to protect the health and safety of nursing home residents. Accordingly, District 1199 never had an opportunity to appreciate fully the circumstances surrounding its negotiations with the nursing homes in order to determine whether its demands and the subsequent job actions were appropriate, or merely futile or ill-advised in light of the State’s efforts. District 1199 did negotiate one contract without a strike. The union did not send SunBridge a strike notice in March because of the progress in negotiations, and District 1199 settled with SunBridge at the beginning of April. The SunBridge contract included most of the union’s demands. District 1199 forwarded copies of the agreement to other nursing homes, in the hope that it could use the SunBridge agreement as a model to pattern contracts at other facilities. All the nursing homes rejected the SunBridge model because they concluded that the State would not fund the increases set out in the agreement. In contrast to the negotiation process at SunBridge, after striking at nursing homes in March, District 1199 contacted the employers in order to renew negotiations. Between March 26, 2001 and May 1, 2001, no nursing-home owner improved its pre-strike contract offer to the union, no employer proposed staffing improvements, and no employer increased economic offers. Some employers, such as Olympus, Genesis, and Ronealli, made regressive offers — offering less than before the March strike. Olympus proposed that District 1199 substitute a commercial insurance plan — partly paid for by employees — for the union health and welfare fund and that District 1199 eliminate the pension fund and training fund. Genesis made a proposal to end pension contributions at two of its three facilities. Ronealli proposed smaller wage increases than it offered before the strike. Although myriad external factors affect the bargaining positions of parties to a labor dispute, it is unusual that no nursing home was receptive to negotiations after the March strike and that none of the nursing-home owners made any improvements over prior offers after the one-day job action and in light of the pending indefinite job action. During the May job action, employers that claimed to have hired permanent replacements would only agree to take all strikers back after the union accepted a four-year contract. Employers used the threat of permanent replacements as powerful leverage in the negotiations to pressure District 1199. Approximately ten days after the union offered to return to work during the May job action, District 1199 settled with Ron-calli. The Ronealli settlement had significantly smaller wage increases than demanded by the union, imposed a less generous benefits package on new union members, and had no provisions for staffing improvements. The court credits Brown’s testimony that, absent the State’s actions during the 2001 job actions, District 1199 never would have accepted the Ronealli settlement. Because the Ronealli settlement fit within the Governor’s proposed budget, however, it became the pattern for agreements with other facilities. Similar contracts were reached with thirty-two of the struck homes and with some other facilities that were not struck, but that had contracts which expired later. The final settlements with the nursing homes failed to meet several substantive demands sought by District 1199. For the first two years of the contracts, the wage increases were less than inflation. There were no provisions for staffing improvements, and, finally, some contracts reduced workers’ benefits. As evidenced by the final settlements and the employers’ unusual bargaining positions, the State’s policy of subsidizing the Medicaid portion of strike-related costs before nursing homes incurred those expenses relieved significant economic pressure on the facilities and, thereby, impacted labor relations between District 1199 and the nursing homes. G. Governor Rowland For the past five or six years, Ryan and Governor Rowland have sought to restructure the State’s long-term health care, using Oregon’s health system as a model, by reducing the number of licensed nursing-home beds, through nursing-home closures and other means, while increasing resources for home-care alternatives and assisted-living arrangements. As a direct result of the restructuring, the nursing-home census has declined by over 1000 residents. State officials recognize that the restructuring efforts are a factor that creates further financial pressures on nursing homes, in addition to normal cost pressures on the health-care industry and the shortage of nursing personnel. In preparation for the 2001 labor dispute, Governor Rowland was briefed on the plans of the inter-agency task force, and state officials kept Ellef apprised of all plans before the strikes occurred and of all major events during the course of the 2001 strikes. The Governor relied on the information conveyed to him by state officials. Also, Fatone met twice in 2001 with Governor Rowland in his office to discuss the effects of the nursing-home strikes. The first meeting occurred around March 20, 2001 and was arranged at the request of the Governor’s office; present at the meeting were Fatone, Governor Rowland, Ryan, the Governor’s counsel Anne George, and Dean Pagani, the Governor’s press spokesperson. The Governor’s office asked Fatone to attend the meeting in order to brief the Governor on the union’s one-day strike and the facilities that were delaying the reinstatement of striking workers. In response to the Governor’s inquiries, Fatone advised him of the facilities that would be delaying reinstatement of striking workers, and they discussed issues related to patient care. Fatone’s second meeting with the Governor occurred in late April or early May 2001, in the Governor’s office with the same participants. The topics discussed at the second meeting, which occurred before the May strike, included the likelihood of another job action. At the meeting, someone solicited Fatone’s opinion with regard to the reasonableness of District 1199’s tentative contract with SunBridge. Fa-tone and CAHCF had done an internal analysis of the cost of the tentative Sun-Bridge contract, and Fatone told the Governor that the costs of that contract were fiscally impossible for the provider and the Medicaid program because the contract exceeded the 2]é % rate increase cap in the Governor’s proposed budget. In analyzing the SunBridge contract, Fatone and CAHCF assumed, correctly, that Governor Rowland would not provide union and nonunion homes different rate increases under the proposed budget; Governor Rowland and other state officials consistently expressed the need to fund union and nonunion homes equally. Subsequently, Dean Pagani publicly commented that the State could not afford to fund the cost increases it would take to implement the staffing and pay increases sought by District 1199 in the SunBridge contract. Beginning in the fall of 2000 and continuing through May 2001, Ryan repeatedly indicated that the amount of money available for nursing homes’ Medicaid reimbursement had been set and that the Governor was not going to propose any additional money, because over $200 million had been added to the State budget in 1999 for nursing-home wages and benefits. This position was repeated by Dean Paga-ni and by the Governor. Governor Rowland did suggest that if the Democratic leadership of the legislature was inclined to add more money to the Medicaid reimbursement allocation for nursing homes, that was their prerogative and that the Governor would discuss it. The Governor perceived the issue as financial. From Governor Rowland’s perspective, the legislative leadership and his administration set the rate increase for nursing-home costs after considering the needs of all the nursing homes, funding all employers, union and non-union, equally, without regard to the contracts at any individual nursing home. Once the State determined the rate increase, Governor Rowland considered any strike futile because of his unwavering position that no additional money would be allocated. The conduct and internal memoranda of state officials reflect the Governor’s viewpoint. Although state officials elicited information and aid from CACHF, as the representative of the nursing-home industry, District 1199 was not informed of or included in the State’s preparations for the 2001 job actions. When only iCare remained as a holdout from settling with District 1199 during the May strikes, the State concluded, without regard t