AUBURN MED. CTR. v. ALA. HEALTH PLANNING AGENCY

• Decision Date: 11 October 2002
• Citation: 848 So.2d 269
• Parties: AUBURN MEDICAL CENTER, INC. v. ALABAMA STATE HEALTH PLANNING & DEVELOPMENT AGENCY and East Alabama Health Care Authority d/b/a East Alabama Medical Center.
• Court: Alabama Court of Civil Appeals

848 So.2d 269

AUBURN MEDICAL CENTER, INC. v. ALABAMA STATE HEALTH PLANNING & DEVELOPMENT AGENCY and East Alabama Health Care Authority d/b/a East Alabama Medical Center.

2010257.

Court of Civil Appeals of Alabama.

October 11, 2002.

Alvin T. Prestwood of Volz, Prestwood & Hanan, P.C., Montgomery, for appellant.

Mark D. Wilkerson and Keith S. Miller of Brantley, Wilkerson & Bryan, P.C., Montgomery, for appellee State Health Planning & Development Agency.

James E. Williams and J. Flynn Mozingo of Melton, Espy & Williams, P.C., Montgomery, for appellee East Alabama Health Care Authority.

PITTMAN, Judge.

Auburn Medical Center, Inc. (hereinafter "AMC"), appeals two interrelated administrative decisions of the Alabama State Health Planning and Development Agency (hereinafter "SHPDA"). The case was originally filed in the Montgomery Circuit Court on April 24, 2001, seeking judicial review of two SHPDA decisions, both rendered on February 28, 2001, and which became effective on March 8, 2001. One decision granted a certificate of need ("CON") to the East Alabama Health Care Authority d/b/a East Alabama Medical Center (hereinafter "EAMC") to provide specialty-care assisted living in Lee County, and the other decision denied AMC's request for a declaratory ruling regarding that CON application as well as other projects of EAMC. AMC had sought a rehearing of those decisions, and SHPDA denied the request by failing to act on it before April 18, 2001. AMC filed timely notices of appeal of both SHPDA decisions to the circuit court. On September 26, 2001, the trial court affirmed the decisions of SHPDA. AMC filed a postjudgment motion, which was denied on October 29, 2001. AMC filed its notice of appeal to this court on December 7, 2001.

Although this case was submitted on briefs on April 29, 2002, EAMC subsequently filed a motion to dismiss the appeal on August 14, 2002. We will address the motion to dismiss the appeal first.

In its motion, EAMC cites a June 14, 2002, Alabama Supreme Court decision, Ex parte East Alabama Health Care Authority, 847 So.2d 951 (Ala.2002), which held that AMC's CON had expired in June 1995. Accordingly, EAMC argues that AMC did not have standing to bring the original challenges before SHPDA and the circuit court, nor does AMC have standing now to bring this appeal. Upon a close examination of Ex parte East Alabama Health Care Authority, we must agree with this conclusion and dismiss the appeal due to lack of standing.

In Ex parte East Alabama Health Care Authority, our supreme court answered the crucial question: Did AMC's CON expire in June 1995 or was the time limitation tolled by the filing of a complaint under SHPDA's rules and regulations?

"SHPDA issued the present version of AMC's CON on December 7, 1992. Since [Ala. Admin. Code (SHPDA Rules and Regulations) ] § 410-1-11-.01 stipulates that a CON will expire after 12 months, AMC's CON was due to expire in December 1993. However, § 410-1-11-.02 states in pertinent part:

"`The holder of the certificate of need must incur a firm commitment or obligation as defined by statute and these rules within the initial twelve (12) month period, or if extended, within the extension period. Should the obligation be incurred before the expiration date of the certificate of need, then the certificate shall be continued in force and effect for a period not to exceed one year, or:

"`(a) the completion of the construction project, where the certificate is for construction;....'

"On November 2, 1993, AMC entered into a construction contract ... thus incurring the commitment necessary to extend the duration of the CON beyond the December deadline. Under the terms of § 410-1-11-.02, AMC's CON was now due to expire upon completion of the construction of the hospital facility. However, § 410-1-11-.04 places a restriction on such an extension. That section states, in pertinent part:

"`If the holder of the certificate of need fails to commence the construction project within the time period stated in the construction contract or to complete the construction project within the time period stated in the construction contract, then the Certificate of Need shall be terminated and shall be null and void.'"

847 So.2d at 954. Our supreme court reviewed AMC's facility-construction contract and concluded that, because AMC's facility was not completed by the deadline imposed in its construction contract, AMC's CON expired in June 1995. 847 So.2d at 954. "AMC's CON had expired as a matter of law in accordance with SHPDA's Rules and Regulations in June 1995, and nothing in those rules gives SHPDA the power to resurrect it." 847 So.2d at 957.

The expiration of AMC's CON is essential to the resolution of this appeal. Without a valid CON, AMC has no legal right to provide medical services in Lee County. Therefore, AMC has no direct or individual interest in SHPDA's administrative decisions beyond that of a member of the public at large. "[S]tanding is an issue of subject-matter jurisdiction, and it does not have to be raised in the trial court to be considered by an appellate court." Birmingham Zoning Board of Adjustment v. Jackson, 768 So.2d 407, 408 (Ala.Civ.App. 2000).

Standing may be defined as a party's right to seek legal redress when "`the party has been injured in fact and [when] the injury is to a legally protected right.'" State v. Property at 2018 Rainbow Drive, 740 So.2d 1025, 1027 (Ala.1999). If a party has no direct or discernable legal interest then he has no standing to challenge an administrative decision, nor can he challenge the decision of a trial court affirming that decision. Cf. Springhill Hosps., Inc. v. Alabama State Health Planning Agency, 549 So.2d 1348 (Ala.Civ.App.1989) (holding that the hospital, which stood to lose patients and whose expansion opportunities would be adversely affected by the agency action, had standing to appeal agency decision).

Once AMC's CON expired in June 1995, AMC no longer had a direct or legally defendable interest in any decisions of SHPDA regarding health care in Lee County. However, SHPDA's rules and regulations provide for two forms of third party involvement: (1) declaratory relief pursuant to Ala. Admin. Code (SHPDA Rules and Regulations) Rule 410-1-9-.01 (see also § 41-22-11, Ala.Code 1975, for the corresponding provision in the Alabama Administrative Procedure Act) and (2) intervention pursuant to Ala. Admin. Code (SHPDA Rules and Regulations) Rule 410-1-9-.03 (see also § 41-22-14, Ala.Code 1975, for the corresponding provision in the Alabama Administrative Procedure Act). A declaratory ruling under Rule 410-1-9-.01 is available to "any person substantially affected" by an administrative rule or statute enforceable by an administrative agency. Rule 410-1-2-.18 defines an "affected person" as the applicant, or health care facilities in the same area, or persons who have a letter of intent to provide similar services. AMC meets none of these definitions.

Similarly, intervention under Rule 410-1-9-.03 is available to only three classes of persons: (1) a person who has standing to obtain injunctive relief under § 22-21-276, Ala.Code 1975, (2) a person who has a statutory right to intervene, and (3) a person who has an individual interest in the outcome of the case as distinguished from a public interest. Pursuant to § 22-21-276, Ala.Code 1975, a person entitled to injunctive relief is "any holder of a certificate of need that is adversely affected in the exercise of privileges thereunder by a violation [of Title 22, Chapter 21]" or is "a member of the public directly and...