Petition of University Hospitals Authority
| Decision Date | 30 December 1997 |
| Docket Number | No. 90212,90212 |
| Citation | 1997 OK 162,953 P.2d 314 |
| Court | Oklahoma Supreme Court |
| Parties | In the Matter of the Petition of UNIVERSITY HOSPITALS AUTHORITY, an agency of the State of Oklahoma and University Hospitals Trust, a public trust. |
N. Martin Stringer, Phillip L. Savage, George D. Davis, Mary E. Nelson, McKinney, Stringer & Webster, P.C., Oklahoma City, for Petitioners.
Jon D. Sellers, for Protestants Common Cause Oklahoma, N.A.A.C.P., Oklahoma City Branch, and Oklahoma Coalition for Health Security.
John B. Heatly, Fellers, Snider, Blankenship, Bailey & Tippens, P.C., Oklahoma City, for HCA Health Services of Oklahoma, Inc.
Fannie Bates, pro se, Protestant.
James Behrman, M.D., Edwin Kessler, and Roosevelt Milton, pro se, Protestants.
Mark Seikel, Member House of Representatives, pro se, Protestant.
Cindy Tate, Friday's Home Health Services, Inc., pro se, Protestant.
Nancy Stewart, pro se, Protestant.
John L. Lucas, M.D., Saint Francis Health System, Inc., Tulsa, pro se, Protestant.
Mary Alice Valentine, Director, The Rejuvenation and Longevity Foundation, Inc., pro se, Proponent.
Howard Turney, pro se, Proponent.
FACTS AND PROCEDURAL BACKGROUND
¶1 This is an original action brought by petitioners University Hospitals Authority and University Hospitals Trust seeking approval by this Court of a lease of the University Hospitals from University Hospitals Trust to HCA Health Services of Oklahoma, d/b/a Presbyterian Hospitals 1 pursuant to process issued in conformance with § 3225 of the Act, which is set out in full in note 3.
¶2 In 1993 the Legislature transferred "jurisdiction, supervision, management and control" of the University Hospitals from the Department of Human Services to the Authority. 63 O.S.Supp.1993 § 3204. Section 3204 is a part of the University Hospitals Authority Act, 63 O.S.Supp.1993 §§ 3201, et seq. The Legislature amended the Act in 1997 to authorize the creation of a public trust to be called the University Hospitals Trust. 63 O.S.Supp.1997 § 3224. 2 The ¶3 Under the terms of the Act the Legislature made a public policy determination that the needs of Oklahoma citizens would be best served if the Authority were "charged with the mission of operating or leasing " the hospitals. [Emphasis added.] 63 O.S.Supp.1997 § 3203.B.
Trust, the Authority, and HCA, together with the Board or Regents of the University of Oklahoma, agreed to the lease of the University Hospitals to HCA, called the "Transaction" by the parties. The Transaction is memorialized in an agreement called the "Closing Agreement," which includes by reference several earlier agreements.
¶4 The Act requires that before any "proposed agreement regarding the lease and operations of the University Hospitals" could become effective, it would have to be approved by the Contingency Review Board, and by this Court. 63 O.S.Supp. § 3225. 3 The members of the Contingency Review Board are the Governor, the Speaker of the House of Representatives, the President Pro Tem of the Senate, and the Director of State Finance, who is an ex officio non voting member. 74 O.S.Supp.1992 § 3605. The Contingency Review Board approved the Transaction.
¶5 If this Court is "satisfied that the proposed agreement is in accordance with the ... Act and Oklahoma Laws" the Act states that we shall "enter a declaratory judgment approving and declaring the proposed agreement to be valid," and "permanently [enjoin] all persons described in the notice [of the application filed in the Supreme Court] ... from ... instituting any action or proceeding contesting the validity of the proposed agreement." 63 O.S.Supp.1997 § 3225.B.3.
¶6 No contention is made that the Act violates this Court's proscription against issuing advisory opinions, established in Application of Fun Country Development Authority, 1977 OK 138, 566 P.2d 1167, and we
hold that it does not do so because the Act called for notice and gave all protestants the opportunity to be heard. Thus, there is before us an actual case or controversy, and our decision today is not advisory. Further, because of the importance to the public of settling the issue of the lawfulness of the Transaction, we hold that the Act appropriately invoked this Court's jurisdiction. Application of Goodwin, 1979 OK 106 p 2, 597 P.2d 762. 4
¶7 The Transaction involves a long term lease and transfer of the University Hospitals properties and other non-cash assets from the Authority to the Trust. The Trust agrees in a sublease and contract to transfer to HCA the right to use those assets and operate the Hospitals. A Joint Operating Agreement provides how the University Hospitals and HCA's Presbyterian Hospital are to be operated. The Trust retains all duties imposed upon it under the Act. The day-to-day management and operation of the Hospitals is left to HCA. Certain major decisions, however, are reserved for decision by a Governing Committee created by the Act. At closing, HCA is to pay the Trust $19,200,000.00, and the University of Oklahoma $10,000,000.00. HCA is to deposit $10,800,000.00 in an interest bearing escrow account, and pay from it to the University four annual installments of $2,700,000.00 each. In return, all revenues from the operation of the Hospitals will be owned exclusively by HCA but HCA is to pay up to $9,000,000.00 per year of the Hospitals' earnings plus 30% of all pre-tax earnings of the Hospitals over $39,000,000.00. The Agreement expressly states that it does not create a partnership, joint venture, or agency relationship between the Trust and HCA.
¶8 In a separate "Indigent Care Agreement" HCA has agreed with the Authority to provide indigent care at all HCA hospitals. HCA agrees to provide care at costs defined in the Agreement in return for the Authority's promise to pay to HCA the amounts appropriated for indigent care by the Legislature.
¶9 The Regents and HCA have agreed that HCA will continue to allow students and faculty at the University of Oklahoma Health Sciences Center to use the University Hospitals, and the University of Oklahoma will continue to use the University Hospitals as its primary teaching hospitals. HCA also agrees to use its best efforts to provide patients under managed care agreements for treatment to the Hospitals, and to pay to the University monthly compensation specified in the agreement for the services provided.
¶10 The only Protestants who responded to the Notice of this proceeding within the time allowed by the Notice and by the order of this Court of October 13, 1997 that all protests were to be filed not later than November 3, 1997 and are represented by counsel are Common Cause Oklahoma, the N.A.A.C.P., Oklahoma Branch, and the Oklahoma Coalition for Health Security. Their counsel candidly concedes that this Court has jurisdiction under the Act, and that the parties to the Transaction complied with the requirements of the Act. 5
¶11 Protestants have raised several public policy issues, some of which are that the Transaction will cause staff reductions at the University Hospitals, that HCA should not be allowed to lease and operate the hospitals because it is a large private corporation, that the Transaction will put competing hospitals out of business, that the costs of health care will rise, and that HCA will gain control over medical education in Oklahoma. In addition, some Protestants raise an ethical issue, claiming that the President pro tem of the Senate and the Governor, both members of the Contingency Review Board, have an unethical and unlawful conflict of interest because of their relationship with HCA and that we should, therefore, declare the Transaction unlawful. The public policy issues are within the purview of the Oklahoma Legislature, and the ethics issue, if any, should initially lie within the province of the Ethics Commission and the Legislature. These issues are, therefore, not available to this Court as reasons to declare the Transaction unlawful. In Application of Oklahoma Capitol Improvement Authority, 1960 OK 207, 355 P.2d 1028, 1031, we said:
In construing the constitutionality of a statute the Supreme Court is not authorized to consider its propriety, wisdom, or its practicability as a working proposition. Those questions are clearly and definitely established by our fundamental law to a certainty as functions of the legislative department of the government.... There is a presumption that the act is constitutional.... Courts must sustain statutes, if possible, and nullify them only when they are clearly unconstitutional.
A determination of the validity of the claimed ethics violations is constitutionally vested with the Ethics Commission. This Court does not exercise power that is constitutionally granted to another entity. Okla. Const. Art. IV § 1; State v. Freeman, 1968 OK 54 pp 35-43, 440 P.2d 744, 753-54. Thus, the public policy and ethics issues listed above are beyond our purview here and we must limit our review to whether the Act violates other laws or is unconstitutional. We expressly refuse to pass on the wisdom and business advisability of the Transaction, or the lack thereof. Here, we conclude that the Transaction is not in discord with the requirements of the Act and other Oklahoma law.
¶12 Protestants raise two issues into which we shall inquire: (1) Did Petitioners violate the Open Meeting Act, 25 O.S.1991 §§ 301, et seq., and the Open Records Act, 51 O.S.Supp.1997 §§ 24A.1, et seq.; and (2) Does the Transaction violate Okla. Const. Art. 10 § 15. For the reasons discussed below, we declare that neither the Open Meeting Act, the Open Records Act nor Okla. Const., Art. 10 § 15, was violated.
¶13 Title 63 O.S.Supp.1997 § 3207.I expressly provides that the Authority is subject to the Open Meeting Act, 25...
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