Amisub of S.C., Inc. v. S.C. Dep't of Health & Envtl. Control

• Citation: 757 S.E.2d 408,407 S.C. 583
• Decision Date: 22 May 2014
• Docket Number: Nos. 27382.,s. 27382.
• Court: United States State Supreme Court of South Carolina
• Parties: AMISUB OF SOUTH CAROLINA, INC., AnMed Enterprises, Inc./HealthSouth, LLC, Georgetown Memorial Hospital, Hilton Head Health System, L.P., Medical University Hospital Authority, Piedmont HealthSouth Rehabilitation, LLC, The Regional Medical Center of Orangeburg and Calhoun Counties, Trident NeuroSciences Center, LLC, Waccamaw Community Hospital, Abbeville Nursing Home, Inc., South Carolina Hospital Association, and South Carolina Health Care Association, Petitioners, v. SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, Respondent. Appellate Case No. 2013–001530.

407 S.C. 583
757 S.E.2d 408

AMISUB OF SOUTH CAROLINA, INC., AnMed Enterprises, Inc./HealthSouth, LLC, Georgetown Memorial Hospital, Hilton Head Health System, L.P., Medical University Hospital Authority, Piedmont HealthSouth Rehabilitation, LLC, The Regional Medical Center of Orangeburg and Calhoun Counties, Trident NeuroSciences Center, LLC, Waccamaw Community Hospital, Abbeville Nursing Home, Inc., South Carolina Hospital Association, and South Carolina Health Care Association, Petitioners,
v.
SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, Respondent.
Appellate Case No. 2013–001530.

Nos. 27382.

Supreme Court of South Carolina.

Heard March 6, 2014.
Decided April 14, 2014.
Rehearing Denied May 22, 2014.

[757 S.E.2d 410]

C. Mitchell Brown and Travis Dayhuff, both of Nelson Mullins Riley & Scarborough, LLP, of Columbia, William W. Wilkins, Andrew A. Mathias, and Burl F. Williams, all of Nexsen Pruet, LLC, of Greenville, for Petitioners.

W. Marshall Taylor, Jr., Ashley C. Biggers, and James B. Richardson, Jr., all of Columbia, for Respondent.

Swati S. Patel, Chief Legal Counsel for the Office of the Governor, and M. Todd Carroll and Kevin A. Hall, both of Womble Carlyle Sandridge & Rice, LLP, all of Columbia, for Amicus Curiae The Office of the Governor.

ORIGINAL JURISDICTION
Chief Justice TOAL.

This matter comes before the Court in its original jurisdiction. Ten health care entities,

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along with the South Carolina Hospital Association and the South Carolina Health Care Association (collectively, Petitioners), seek a declaration from this Court that the South Carolina Department of Health and Human Services (DHEC) is obligated to enforce the State Certification of Need and Health Facility Licensure Act (the CON Act) ¹ and fund the certificate of need (CON) program despite the South Carolina House of Representative's failure to override the Governor's veto of the line item in the state budget providing funding for the program. We grant Petitioners' requested relief.

Facts/Procedural Background

The South Carolina General Assembly initially passed the CON Act in 1971. It is a comprehensive approach to containing health care costs for South Carolinians by controlling the construction of health care facilities, the provision of certain services, and the purchase of health care equipment so as to avoid duplication of health care services. Since its adoption in 1971, the CON Act and its corresponding regulations have evolved into a sophisticated regulatory scheme. Under the CON Act, a person or health care facility must obtain a CON from DHEC before constructing a new health care facility, establishing certain health care services, making capital expenditures on certain health care projects, or acquiring certain types of health care equipment. S.C.Code Ann. § 44–7–160 (Supp.2013). In addition, the CON Act and the regulations promulgated pursuant to the CON Act set forth, inter alia, specific CON application procedures, project review criteria, and penalties for non-compliance. S.C.Code Ann. §§ 44–7–110 to –394 (2002 & Supp.2013); 24A S.C.Code Ann. Regs. §§ 61–15 (2012). DHEC is responsible for administering the CON program. S.C.Code Ann. § 44–7–140.

In August 2012, DHEC submitted its agency appropriations request to Governor Nikki Haley for Fiscal Year 2013–2014, requesting appropriations for four programs: (I) Administration; (II) Programs and Services; (III) Employee Benefits; and (IV) Non-[R]ecurring Appropriations. DHEC requested funding for the CON Program in subsection (II)(F)(2), Facility & Service Development. DHEC specifically asked for a $773,000 increase from the previous year to be paid from the state's general fund to fund the CON program, resulting in a total of $1,759,915 requested funding for subsection (II)(F)(2). However, in her Executive Budget for Fiscal Year 2013–2014, the Governor recommended no additional funding for the CON program and only allocated a total of $986,615 in combined funds for subsection (II)(F)(2).

In its 2013–2014 appropriations bill, the General Assembly appropriated $1,759,915 to DHEC for subsection (II)(F)(2), as requested by DHEC. By letter dated June 25, 2013, the Governor vetoed certain line items in the General Assembly's appropriations bill. Veto 20, entitled “Closing Programs That Don't Work” (Veto 20), specifically vetoed subsection (II)(F)(2). In her veto message, the Governor stated: “The [CON] Program is an intensely political one through which bureaucratic policy makers deny healthcare providers from offering treatment. We should allow the market to work rather than politics.” ²

The House of Representatives sustained Veto 20.³ According to Representative Brian White, Chairman of the Ways and Means Committee (Chairman White), he asked the House members to sustain Veto 20 because DHEC had “other funds in that agency they can use and [can] move other people over for that purpose.” Thereafter, the General Assembly passed Act No. 101, 2013 S.C. Acts 1, the General Appropriations Act for Fiscal

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Year 2013–2014 (the 2013–2014 Appropriations Act).

On June 28, 2013, DHEC Director Catherine Templeton issued a letter to health care providers communicating that DHEC would no longer fund the CON program. In pertinent part, the letter stated:

The sustained veto shows the intention of both the Executive and Legislative branches to suspend the operation of the [CON] program for the fiscal year beginning July 1, 2013.... [DHEC] has no independent authority to expend state funds for [the CON program] and therefore, the veto completely suspends the program for the upcoming fiscal year. Accordingly, [DHEC] cannot review new or existing applications for [CONs] as of July 1. Moreover, [DHEC] cannot take any [CON] enforcement action. Should the General Assembly restore the program in the future, [DHEC] will not be inclined to take enforcement actions under [the CON Act] for activity that occurs during the program's suspension, unless instructed otherwise by the General Assembly. Suspending the program has the practical effect of allowing new and expanding health care facilities to move forward without the [CON] process.

In response, Chairman White and Representative Murrell Smith, Chairman of the Ways and Means healthcare subcommittee, issued a statement regarding Veto 20, stating in pertinent part that “[t]he House of Representatives did not intend to eliminate the CON Program or its statutory requirements. In fact, the House believes there are a number of ways for the CON Program to retain its function and purpose.”

DHEC discontinued the CON program effective July 1, 2013. As of that date, DHEC had thirty-nine undecided CON applications and requests pending.

Petitioners, each past CON recipients, future CON applicants, or pending CON applicants, filed a petition for original jurisdiction, seeking declarations that DHEC's duty to administer the CON program during Fiscal Year 2013–2014 was not suspended and that DHEC has a duty to seek alternative means of funding.

Pursuant to Rule 245, SCACR, we granted Petitioners' petition for original jurisdiction. We further accepted the Governor's amicus curiae brief pursuant to Rule 213, SCACR.

Issues

I. Whether DHEC's duty to administer the CON program was suspended for Fiscal Year 2013–2014 after the House of Representatives sustained the Governor's line item veto eliminating funding for the program?

II. Whether DHEC must fund the administration and enforcement of the CON program?

Law/Analysis

We preface our opinion by emphasizing the significance of the separation of powers doctrine to the decision we must render in this matter. The South Carolina Constitution provides:

In the government of this State, the legislative, executive, and judicial powers of the government shall be forever separate and distinct from each other, and no person or persons exercising the functions of one of said departments shall assume or discharge the duties of any other.

S.C. Const. art. 1, § 8. This constitutional mandate “prevents the concentration of power in the hands of too few, and provides a system of checks and balances.” Hampton v. Haley, 403 S.C. 395, 403, 743 S.E.2d 258, 262 (2013); State ex rel. McLeod v. McInnis, 278 S.C. 307, 312, 295 S.E.2d 633, 636 (1982). The General Assembly “has plenary power over all legislative matters unless limited by some constitutional provision.” Hampton, 403 S.C. at 403, 743 S.E.2d at 262 (citing Clarke v. S.C. Pub. Serv. Auth., 177 S.C. 427, 438–39, 181 S.E. 481, 486 (1935)). The executive branch, on the other hand, “is constitutionally tasked with ensuring ‘that the laws be faithfully executed.’ ” Id. (quoting S.C. Const. art. IV, § 15).

History reveals that litigation often arises because of conflicts between the branches of the government. McLeod, 278 S.C. at 312–13, 295 S.E.2d at 636. While case law within our state and across the

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nation involving separation of powers disputes is not a model of consistency, one theme reverberates throughout: the court's role in upholding the separation of powers doctrine is to maintain the three branches of government in positions of equality. When asked to resolve a conflict in which the Governor attempts use her veto pen to rewrite a permanent law, this Court must adhere to well-established separation of powers principles, leaving the power to legislate to the General Assembly, and the power to execute the laws and to veto legislation to the Governor.

I. Enforcement of the CON Act

The General Assembly must provide annually for all expenditures in a general appropriations act in order to fund the ordinary expenses of state government and to direct the expenditure of these funds. S.C.Code Ann. § 2–7–60 (2005); Ex parte Georgetown Cnty. Water & Sewer Dist., 284 S.C. 466, 469, 327 S.E.2d 654, 656 (1985) (citations omitted). Pursuant to the South Carolina Constitution, “[b]ills appropriating money out of the Treasury shall...