Baptist Health Sys. v. Rutledge
Decision Date | 17 March 2016 |
Docket Number | No. CV–15–616,CV–15–616 |
Citation | 488 S.W.3d 507,2016 Ark. 121 |
Parties | Baptist Health Systems, Mercy Health System, and Washington Regional Medical Center, Appellants/Cross–Appellees v. Leslie Rutledge, Arkansas Attorney General ; Arkansas Department of Health; and Nathaniel Smith, MD, MPH, Director, Appellees/Cross–Appellants |
Court | Arkansas Supreme Court |
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., Little Rock, by: Megan D. Hargraves, for appellants.
Leslie Rutledge, Att'y Gen., by: Bourgon B. Reynolds, Ass't Att'y Gen., for appellees.
Mitchell, Blackstock, Ivers, Sneddon & Marshall, PLLC, Little Rock, by: Emily Sneddon and Michael W. Mitchell, amicus curiae in support of appellees.
Elisa White, Vice President and General Counsel, Arkansas Hospital Association, amicus curiae in support of appellants.
At issue in this appeal is Act 766 of 2013, known as the Arkansas Peer Review Fairness Act (the Act). Act of Apr. 5, 2013, No. 766, 2013 Ark. Acts 2890 (codified at Ark.Code Ann. § 20–9–1301
(Repl. 2014)). Before the Pulaski County Circuit Court, the case was decided on competing motions for summary judgment. The hospitals appealed, and the defendants cross-appealed. The Arkansas Hospital Association and the Arkansas Medical Society have filed amicus curiae briefs. We reverse the circuit court's denial of the defendants' motion for summary judgment as to whether this case presents a justiciable controversy, and we dismiss the direct appeal.
The appellants, plaintiffs below, are three Arkansas corporations that operate private hospitals in the state (the Hospitals). In June 2014, the Hospitals filed a complaint for declaratory judgment in the Pulaski County Circuit Court seeking a judgment declaring the Act unconstitutional under the Arkansas and United States Constitutions.1 The complaint named the following parties as defendants: the Attorney General2 in his official capacity; the Arkansas Department of Health; and Nathaniel Smith, MD, MPH, Director. The defendants answered, denying that they were proper parties to this action, denying that the Act is unconstitutional, and pleading various affirmative defenses. Eventually, the parties filed competing motions for summary judgment. No hearing was held, and the circuit court entered two separate orders on April 24, 2015. The circuit court denied paragraph four of the defendants' motion for summary judgment, which stated as follows:
This Court should also enter summary judgment in favor of the state defendants because plaintiffs lack standing to file this declaratory judgment action. There is no justiciable controversy between plaintiffs and these state defendants, and plaintiffs' declaratory judgment complaint is not ripe for consideration.
Without elaboration, the circuit court ruled that the Act is not unconstitutional for the following reasons: the Act is not pre-empted by federal law; the Act does not unconstitutionally treat the Hospitals differently from other healthcare entities; the Act does not restrict the Hospitals' right to retain the attorney of their choice; the Act does not unconstitutionally interfere with the exclusive jurisdiction of Arkansas courts to regulate the practice of law; and the Act is not unconstitutionally vague and ambiguous. The Hospitals filed a timely notice of appeal; the defendants filed a timely notice of cross-appeal.
Cross–Appeal: Is this a proper declaratory judgment action?
Peer review is a process for monitoring quality and improving care within a healthcare institution. See Ark.Code Ann. § 20–9–1302(a)(1)
. It was addressed by Congress in 1986 with the passage of the Health Care Quality Improvement Act (HCQIA), codified at 42 U.S.C. §§ 11101 et seq. Generally speaking, HCQIA provides immunity from liability for civil damages for those who participate in a professional-review action and meet the standards set forth in HCQIA (regarding the purpose of the action, notice and hearing, and procedures). See 42 U.S.C. § 11111. In 2013, our General Assembly passed the Act, codified at Ark.Code Ann. §§ 20–9–1301 to –1308. Arkansas Code Annotated section 20–9–1302 provides as follows:
and the additional requirements of [the Act].” Ark.Code Ann. § 20–9–1304(a).
The defendants/cross-appellants argue that they are improper parties to this suit and that the Hospitals do not have standing to obtain declaratory relief. With regard to obtaining declaratory relief, the defendants argue that there is no justiciable controversy, there is no actual controversy between adverse parties, and the issues are not ripe. Because the arguments under these two points overlap, we address them together.
Our declaratory-judgment statute provides that “[a]ny person ... whose rights, status, or other legal relations are affected by a statute ... may have determined any question of construction or validity arising under the ... statute ... and obtain a declaration of rights, status, or other legal relations thereunder.” Ark.Code Ann. § 16–111–104
(Repl. 2006). While this section recognizes a party's right to a declaratory judgment, a justiciable controversy is required. McGhee v. Arkansas State Bd. of Collection Agencies , 375 Ark. 52, 57–58, 289 S.W.3d 18, 23 (2008). Declaratory relief will lie where: (1) there is a justiciable controversy; (2) it exists between parties with adverse interests; (3) those seeking relief have a legal interest in the controversy; and (4) the issues involved are ripe for decision. Id.
On appeal, the question of whether there was a complete absence of a justiciable issue shall be reviewed de novo on the record of the circuit court. Id.
(quoting Cummings v. City of Fayetteville, 294 Ark. 151, 154–55, 741 S.W.2d 638, 639–40 (1987) ). Here, the Hospitals argue that the Act imposes a present and ongoing injury to them in that it creates new standards with which they must comply during the peer-review process. We disagree that a justiciable controversy has been presented for our review. See
Jegley v. Picado, 349 Ark. 600, 622, 80 S.W.3d 332, 343 (2002) ( ). After carefully considering the parties' arguments on this point, we conclude that the requirement of a justiciable controversy is not present in this case.
In sum, appellants ask this court to determine whether the Act, which presents an entire statutory scheme, is unconstitutional without any present controversy to examine. The only evidence before the circuit court on the cross-motions for summary judgment was an affidavit of the Director of the Department of Health and a portion of the Hospitals' responses to appellees' first set of requests for admissions. Without a sufficient factual record to show an actual, present controversy, this court cannot opine on the merits of the constitutional arguments raised in the Hospitals' declaratory-judgment suit. Because a justiciable controversy is a necessary element of a declaratory-judgment suit and that element is lacking in this case, it is unnecessary to address the other requirements for obtaining declaratory relief. Similarly, we do not reach the issues presented on direct appeal.
Reversed on cross-appeal; direct appeal dismissed.
Danielson
Paul E. Danielson
, Justice, dissenting.
I respectfully dissent. I disagree with the majority's holding that this is not a proper declaratory-judgment action. Declaratory judgments are used to determine the rights and liabilities of respective parties. Nelson v. Ark. Rural Med. Practice Loan & Scholarship Bd. , 2011 Ark. 491, 385 S.W.3d 762
(citing Stilley v. James, 345 Ark. 362, 48 S.W.3d 521 (2001) ). The purpose of the declaratory-judgment statutory scheme “is to settle and to afford relief from uncertainty and...
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