Psychiatric Institute of America v. Mediplex, Inc., 86-327

• Decision Date: 04 December 1987
• Docket Number: No. 86-327,86-327
• Citation: 536 A.2d 169,130 N.H. 125
• Parties: PSYCHIATRIC INSTITUTE OF AMERICA v. MEDIPLEX, INC., et al.
• Court: New Hampshire Supreme Court

Page 169

536 A.2d 169

130 N.H. 125

PSYCHIATRIC INSTITUTE OF AMERICA v. MEDIPLEX, INC., et al.

No. 86-327.

Supreme Court of New Hampshire.

Dec. 4, 1987.

Sulloway, Hollis & Soden, Concord (Eleanor H. Holmes on the brief and orally), for Psychiatric Institute of America.

Orr & Reno P.A., Concord (Eve H. Oyer on the brief and orally), for Lake Shore Hosp.

McSwiney, Jones, Semple & Douglas, Concord (Charles G. Douglas, III, and Katherine E. Stine on the brief, and Mr. Douglas orally), for Mediplex, Inc.

Upton, Sanders & Smith, Concord (Russell F. Hilliard and Gilbert Upton on the brief, and Mr. Hilliard orally), for James F. and Maureen G. O'Neill.

Stephen E. Merrill, Atty. Gen. (Douglas N. Jones, Asst. Atty. Gen., on the brief and orally), for State, on behalf of Governor John H. Sununu and the Health Services Planning and Review Bd.

BROCK, Chief Justice.

This is an interlocutory transfer without ruling from the Superior Court (Cann, J.), whereby the parties seek clarification as to the effect, if any, of Executive Order 85-2 and of Laws 1985, chapter 378, on the certificate of need (CON) procedures set forth in RSA ch. 151-C (Supp.1983).

The facts are not in dispute. In late 1984, Mediplex, Inc. (Mediplex), Whispering Pines, and Psychiatric Institute of America (P.I.A.), all parties in the present action, applied for CON's for alcohol and substance abuse specialty beds under the provisions of RSA chapter 151-C (Supp.1983). On May 23, 1985, the board, in two separate actions, reached a final decision, pursuant to RSA 151-C:8 (Supp.1983), to deny all three CON applications.

On June 1, 1985, Executive Order 85-2 took effect. This Executive Order imposed a moratorium on the issuance of CON's for additional general acute and specialty care beds in New Hampshire. The limitation in the moratorium stated that it did not apply to any letter of intent or application which was submitted as of February 28, 1985, "provided that the letter of intent and its application receive[d] a CON by June 1, 1985."

Under the procedures provided in RSA chapter 151-C (Supp.1983), Whispering Pines, on June 12, 1985, requested reconsideration of the denial of its application. The board held a hearing for that purpose on June 26, 1985, reversed its earlier decision, and granted a CON to Whispering Pines. P.I.A., Mediplex, and Lake Shore Hospital (Lake Shore) (a party who currently operates a specialty bed hospital and is opposed to the granting of additional CON's), pursuant to the provisions of RSA chapter 151-C (Supp.1983), then requested reconsideration of the board's decision.

On October 21, 1985, the board granted the three requests for reconsideration, ruled that all three original applications would be considered as competing, and issued a pre-hearing order stating that a rehearing would be held on December 13, 1985.

On December 3, 1985, P.I.A. filed a petition for declaratory judgment in the superior court seeking a ruling that Executive Order 85-2 prohibited the board from issuing the CON to Whispering Pines on July 26, 1985. On December 6, 1985, the board stayed any further consideration of the matter pending a decision on the validity of the Executive Order. On June 10, 1986, the superior court approved the recommendation of the Master (Frank B. Clancy, Esq.) to approve the interlocutory transfer.

The four questions transferred pursuant to RSA 491:17 and supreme Court Rule 9 are as follows: (1) whether Executive Order 85-2 is constitutional as applied to an applicant whose CON application was submitted prior to June 1, 1985, the date of the moratorium imposed by the Executive Order; (2) if the answer to question 1 is in the affirmative, whether the Certificate of Need Review Board (as of July 1, 1985, the Health Services Planning and Review Board) (the board) possessed the authority to grant a CON to the defendants James F. O'Neill and Maureen G. O'Neill (Whispering Pines), on July 26, 1985; (3) whether the enactment of Laws 1985, chapter 378, prohibited the board from granting the CON to Whispering Pines on July 26, 1985; and (4) if the answer to question 3 is in the negative, which statute, RSA chapter 151-C (Supp.1983) or RSA chapter 151-C (Supp.1986), governs further proceedings before the board involving the subject matter of this case.

While the parties present two separate substantive issues, one being the effect of the Executive Order on RSA chapter 151-C (Supp.1983) and the other being the effect of the subsequent revision to RSA chapter 151-C, all of their arguments go to one central issue; namely, whether the actions taken by the board under RSA chapter 151-C (Supp.1983), relative to Whispering Pines' CON application, were proper at the time and under the procedures relied upon. For the reasons that follow, we conclude that the board adhered to procedures appropriate to its authority in reaching the decisions that it did under RSA chapter 151-C (Supp.1983) and that future proceedings relative to this action should be determined pursuant to RSA chapter 151-C (Supp.1983).

The parties' first claim, regarding the constitutionality of the Executive Order, is relevant only if it is determinative of the board's authority to issue a CON in this case. Because we find that a decision on a motion for reconsideration, under RSA chapter 151-C (Supp.1983), is merely a modification of the board's initial "final decision," in this case on May 23, 1985 which was before the effective date of the moratorium, we conclude that the Executive Order in question is not applicable to this case. Since the constitutionality of the Executive Order is not determinative of the outcome, we need not address that issue...