North Fulton Community Hosp., Inc. v. State Health Planning & Development Agency

CourtUnited States Court of Appeals (Georgia)
Citation168 Ga.App. 801,310 S.E.2d 764
Decision Date09 November 1983
Docket NumberNo. 66337,66337

Mark A. Hall, Emmet J. Bondurant II, Robert W. Miller, William E. Hoffmann, Jr., Atlanta, for appellant.

Mark H. Cohen, Barry P. Allen, H. Perry Michael, Carol A. Cosgrove, Asst. Attys. Gen., Lawrence H. Neville, H. Boyce Connell, Jr., Kim H. Roeder, Randall L. Hughes, Atlanta, Stanley S. Jones, Jr., Athens, Peter J. Anderson, Atlanta, Thomas J. Browning, Marietta, H. Fred Gober, James P. Kelly, Jr., Atlanta, George Polatty, Jr., Roswell, for appellees.

POPE, Judge.

This appeal is from the superior court's affirmance of a decision by the State Health Planning Review Board (Review Board) granting Certificates of Need for a 95-bed expansion to appellee Hospital Authority of Fulton County d/b/a Northside Hospital (Northside), and for construction of a new 175-bed hospital in Roswell, Georgia by appellee North Fulton Medical Center, Inc. (AMI). In its decision, the Review Board denied a Certificate of Need for construction of a 100-bed hospital in Roswell by appellant North Fulton Community Hospital, Inc. (Charter).

Title 31, Chapter 6 of the Official Code of Georgia Annotated (Code Ann. § 88-3301 et seq.) establishes a system for state health planning and development. In this system, before a hospital is built or expanded, a Certificate of Need must be obtained from the State Health Planning and Development Agency (SHPDA). See OCGA § 31-6-40 et seq. (Code Ann. § 88-3306 et seq.). The initial agency determination of whether to grant or deny a requested Certificate of Need rests with the SHPDA. An applicant, or a person aggrieved as defined in the Administrative Procedure Act, OCGA Ch. 50-13 (Code Ann. § 3A-101 et seq.), may appeal an adverse determination to a five-member panel of the Review Board. The Review Board is composed of citizens appointed by the Governor who are knowledgeable in health care, but who have no financial interest in any health care facility. The chairman of a five-member panel must be an attorney. The decision of the Review Board is considered the final agency decision; thereafter, judicial review is available in accordance with the Administrative Procedure Act. See OCGA § 31-6-47 (former Code Ann. § 88-3313).

In this case, between November of 1980 and February of 1981, several applications for Certificates of Need to build or expand hospital facilities in the north Fulton County area were received by SHPDA. After the appropriate hearings, SHPDA denied all applications, save those for expansion at Northside Hospital and Kennestone Hospital. Several parties, including Charter and AMI appealed the SHPDA decision to the Review Board. Upon motion, the Review Board consolidated the several appeals into one hearing; through attrition by withdrawal and dismissal, only Northside, Charter and AMI remained as applicants for Certificates of Need before the Review Board at the conclusion of the hearing.

SHPDA has standing to be a party in appeals before the Review Board, see OCGA § 50-13-2 (Code Ann. § 3A-102) and Board of Pharmacy v. Bennett, 126 Ga.App. 307(1), 190 S.E.2d 788 (1972); SHPDA was such a party to the consolidated appeal before the Review Board. Throughout the proceedings below, SHPDA was represented by the Attorney General through Barry P. Allen, Assistant Attorney General.

The appeals to the Review Board were filed in May and June of 1981. The hearing began on July 21, 1981. Sessions were scheduled intermittently through December 13, 1981, to accomodate the schedules of the five panel members, over 30 attorneys representing the several parties, and the approximately 70 witnesses called to testify. The record numbered in excess of 6,000 pages of transcript and some 300 exhibits. In the course of the protracted hearing, Chairman John A. Sherrill of the Review Board contacted members of the SHPDA staff and Assistant Attorney General Allen concerning logistical and procedural matters pertaining to the hearing.

After requesting and receiving from each party proposed findings of fact and conclusions of law, and after hearing final arguments, the Review Board concluded the hearing and closed the record on December 13, 1981. On January 6, 1982, in an open meeting, on the record, the Review Board announced its decision with regard to each applicant. This was done by voice vote and show of hands; each decision was unanimous. Chairman Sherrill announced that the findings of fact and conclusions of law would be issued by the Review Board on January 27, 1982.

Chairman Sherrill and an associate attorney in Chairman Sherrill's law firm, Mike McElroy, drafted proposed findings of fact and conclusions of law and circulated the draft to the other panel members. At Chairman Sherrill's request, and after checking with his superiors in the Attorney General's office and receiving approval, Assistant Attorney General Allen began assisting the Review Board on January 18, 1982 in the final preparation of its findings of fact and conclusions of law. The findings of fact and conclusions of law supporting the January 6, 1982 decision were issued on January 27, 1982.

Charter then petitioned the superior court for judicial review of the Review Board decision. Pursuant to OCGA § 50-13-19(g) (Code Ann. § 3A-120), Charter was permitted by the superior court to make discovery and present evidence regarding alleged ex parte contacts between Chairman Sherrill and Assistant Attorney General Allen.

After considering the deposition evidence of Chairman Sherrill, Mr. McElroy, and Mr. Allen, the interrogatory responses and documents produced in response to discovery requests, and after conducting a day-long hearing including testimony from Chairman Sherrill and Mr. Allen along with the record of the proceedings before the Review Board, the superior court affirmed the decision of the Review Board. Appellant Charter then sought and was granted this discretionary appeal.

1. In enumerations of error 2, 3, 4 and 16, Charter seeks to attack the decision of the administrative agency upon constitutional grounds. These arguments were first urged before the superior court and not before the agency. Thus, these constitutional challenges come too late to be considered by an appellate court. Sparks v. Caldwell, 244 Ga. 530, 261 S.E.2d 590 (1979); Dept. of Public Safety v. Foreman, 130 Ga.App. 71(2), 202 S.E.2d 196 (1973). This is true even regarding the alleged irregularities in procedure before the agency, upon which the superior court heard evidence pursuant to OCGA § 50-13-19(g) (Code Ann. § 3A-120). "The authorization to the superior court set forth in Code Ann. § 3A-120(g) [OCGA § 50-13-19(g) ] to hear evidence relating to alleged irregularities in procedure before the agency that are not shown in the record is an exception to the principle that review by the superior court shall be confined to the record but is not an exception to the principle stated in Code Ann. § 3A-120(c) [OCGA § 50-13-19(c) ] requiring objections to agency decisions or orders to be urged in the first instance before the agency." Ga. Real Estate Comm. v. Burnette, 243 Ga. 516(1), 255 S.E.2d 38 (1979).

The court is aware that Charter, in a letter to Chairman Sherrill dated January 26, 1982, objected to the alleged ex parte contacts. The letter further stated: "As of the date of this letter, we do not know the extent and nature of these violations of our client's rights under the United States and Georgia Constitutions...." This letter preceded Charter's appeal of the agency decision in superior court. However, the record reflects no other objection before the agency. The January 26, 1982 letter is not sufficiently specific in its objection to raise the constitutional issues now sought to be heard in this court. See Taylor v. Moultrie Tobacco Sales Bd., 227 Ga. 384, 180 S.E.2d 737 (1971); Elinburg v. State, 227 Ga. 246(1), 179 S.E.2d 926 (1971); Persons v. Lea, 207 Ga. 384(2), 61 S.E.2d 832 (1950). Therefore, Charter is deemed to have waived its constitutional arguments.

2. In enumerations 12, 13 and 14 Charter contends the superior court erred in holding that the Review Board was statutorily authorized to base its decision not only upon the specific considerations set out in OCGA § 31-6-45 (former Code Ann. § 88-3316), but also upon factors specified in SHPDA rules. OCGA § 31-6-47(b) (former Code Ann. § 88-3318) states in part: "The five-member panel shall base its decision upon the considerations set forth in Code Section 31-6-45 (former Code Ann. § 88-3316)." OCGA § 31-6-43 reads (former Code Ann. § 88-3313) in pertinent part: "... the state agency shall exercise the following powers and duties with respect to certificates of need: (1) Adopt, promulgate and implement rules and procedures sufficient to administer the certificate of need program; ... (4) Establish standards, criteria, or plans required to carry out the purposes and provisions of this article; ... (7) Develop procedures for appeals of decisions of the state agency...."

SHPDA Rule 272-2-.07(2) reads in pertinent part: "The standards listed below will be used in applying the considerations set forth in Rule 272-2-.07(1). These standards shall not be used in place of said considerations, but shall be used only to provide the specificity necessary to interpret and implement said considerations on a fair and consistent basis." The considerations of Rule 272-2-.07(1) are essentially those considerations set out in OCGA § 31-6-45 (former Code Ann. § 88-3316).

Thus, the superior court was correct in its holding that the Review Board could use not only the considerations listed in OCGA § 31-6-45 (former Code Ann. § 88-3316), but also those SHPDA standards and criteria interpreting those standards. Implicit in the interlocking parts of the statutory scheme is the legislative intent that the ...

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