Rapides General Hosp. v. Robinson

• Decision Date: 18 March 1986
• Docket Number: No. CA,CA
• Citation: 488 So.2d 711
• Parties: RAPIDES GENERAL HOSPITAL v. Sandra ROBINSON, Secretary of DHHR and Harvey Fitzgerald, Undersecretary of DHHR. 84 1145.
• Court: Court of Appeal of Louisiana — District of US

Page 711

488 So.2d 711

14 Soc.Sec.Rep.Ser. 947

RAPIDES GENERAL HOSPITAL v. Sandra ROBINSON, Secretary of DHHR and Harvey Fitzgerald Undersecretary of DHHR.

No. CA 84 1145.

Court of Appeal of Louisiana First Circuit.

March 18, 1986.

Rehearing Denied April 29, 1986.

Writ Denied June 20, 1986.

James A. Cobb, Jr., New Orleans, and Charles S. Weems, III., Alexandria, for plaintiff.

Frank H. Perez, Joseph A. Donchess, and Charles L. Patin, Jr., Roy A. Mongrue, Jr., Atty. Gen. Office, Baton Rouge, for defendants.

Before COVINGTON, C.J., and LOTTINGER, EDWARDS, COLE, SHORTESS, CARTER, SAVOIE, LANIER, CRAIN and ALFORD, JJ.

COLE, Judge.

On August 7, 1984, Rapides General Hospital, the plaintiff, brought suit against Sandra Robinson, Secretary Department of Health and Human Resources and Harvey Fitzgerald, Undersecretary, Department of Health and Human Resources, the defendants herein. The plaintiff sought an order commanding the defendants to comply with an agreement entered into between the Secretary of the U.S. Department of Health and Human Services and the State of Louisiana, known as a Section 1122 agreement. Further, the plaintiff sought to restrain the defendants from complying with any orders from Governor Edwin W. Edwards that attempt to change the existing 1122 program, including Executive Order EWE 84-13, the moratorium on 1122 application approvals. In addition, the plaintiff sought an order recalling and vacating the 1122 approval granted to the Pineville Regional Medical Center.

A temporary restraining order was issued by the trial court granting the relief sought by the plaintiff and requiring the defendants to show cause on September 7, 1984 why the temporary order should not be made permanent. On August 9, 1984, an intervention was granted to the Lafayette General Hospital which, in addition to the relief sought by the initial plaintiff, sought an order recalling and vacating the 1122 approval granted to the Lafayette Regional Medical Center. An additional temporary restraining order and show cause order as to the relief sought by the intervenor was granted by the trial court.

On August 9, 1984, the defendants filed a motion to vacate the stay orders and a hearing on the motion was held. ¹ The next day the trial court rendered judgment dismissing the plaintiff's and intervenor's suits. As a basis the trial court found they possessed "no right and/or cause" of action pursuant to the rationale expressed by the court in Lifemark Corp. v. Guissinger, 416 So.2d 1279 (La.1982). The trial court also decreed all stay orders previously issued were recalled, vacated and set aside. The plaintiffs then sought supervisory writs which were denied by this court and thereafter by the Supreme Court. The plaintiffs now bring this devolutive appeal.

The statutory and regulatory background of Section 1122 of the Social Security Act has been well documented. The court in Psychiatric Institutes of America, Inc. v. Heckler, 596 F.Supp. 1311 (E.D.La.1984), provides,

"Prior to 1972, the Department of Health, Education and Welfare, now the Secretary, reimbursed hospitals and other health care facilities for the cost of providing service to Medicare, Medicaid and other federal beneficiaries. The amounts which were reimbursed included the costs attributable to building and equipping those facilities. In 1972, to assure that federal assistance for capital expenditures was not used to support unnecessary capital expenditures and to assure that federal reimbursements for capital expenditures were consistent with state plans, Congress enacted Section 1122 of the Social Security Act, 42 U.S.C. Secs. 1320a-1 et seq. ²

Section 1122 provides that interested states may enter into an agreement with the Secretary whereby the State agrees to review certain capital expenditures proposed by or on behalf of health care facilities located within the State. This review is made under the auspices of a state designated planning agency (DPA). The Secretary has entered into such an agreement with the State of Louisiana."-at 1313. [Footnote omitted.]

The subject agreement between the Secretary (U.S.) and the State of Louisiana was renewed to become effective on July 1, 1984.

I. EXECUTIVE ORDER EWE 84-13

On July 30, 1984, in a letter to Mr. Harvey J. Fitzgerald, Undersecretary of the Department of Health and Human Resources, Governor Edwin W. Edwards stated, "Effective August 1, 1984, and for an indefinite period of time, I am ordering the implementation of a moratorium on the 1122 Program." Thereafter, on August 1, 1984, Governor Edwards signed and affixed the Great Seal of the State of Louisiana to Executive Order EWE 84-13. ²

It is the contention of the plaintiffs this executive order is ultra vires for two specific reasons. First, they argue nowhere in the agreement between the State of Louisiana and the Federal Department of Health and Human Services does a provision allow for a moratorium or a "breach" of the contractual obligations which the agreement provides. Second, they argue because the executive order directs, "No application for any type health care facility or service under the federal 1122 Program shall be approved for an indefinite period of time..," it disregards properly promulgated rules of the Louisiana Department of Health and Human Resources, Division of Policy Planning and Evaluation, which serves as the Designated Planning Agency for the State of Louisiana. Therefore, the plaintiffs contend an executive order in this context is a "rulemaking" which must comply with the Louisiana Administrative Procedure Act, La.R.S. 49:951 et seq., which they allege it clearly does not.

In determining whether the governor possesses the power to declare a moratorium in this instance and whether that power must be exercised through the channelized provisions of the LAPA we note initially the court in Lifemark Corp. v. Guissinger, supra, stated, "We expressly decline to address at this time the issue of the applicability of the Administrative Procedure Act to the Section 1122 process."--p. 1282, fn 8.

The enabling statute empowering the federal secretary to enter into a 1122 agreement with a state, 42 U.S.C. Sec. 1320a-1(b), provides in pertinent part:

"The Secretary, after consultation with the Governor (or other chief executive officer) and with appropriate local public officials, shall make an agreement with any State which is able and willing to do so...." (Emphasis ours.) ³

In conjunction with the above statute the record establishes it is the continuing practice of the State of Louisiana to have the office of the Governor, through its Department of Health and Human Resources, to maintain yearly the 1122 agreement. ⁴

The executive authority of the Governor emanates from Article IV, Section 5(A), Louisiana Constitution of 1974, which provides:

"The governor shall be the chief executive officer of the state. He shall faithfully support the constitution and laws of the state and of the United States and shall see that the laws are faithfully executed."

It is the exercise of this executive authority which forms an 1122 agreement. In an analogous context it has been recognized in Harris v. Trustees of La. Public Facilities, 356 So.2d 1039 (La.App. 1st Cir.1977), writ denied, 357 So.2d 558 (La.1978), the acceptance by the governor of the beneficial interest in a public trust is not a legislative function but is a ministerial function which is properly exercised by the governor.

In Durrett Hardware & Furniture Company v. City of Monroe, 199 La. 329, 340, 5 So.2d 911, 915 (1942), our Supreme Court states,

"Under our system of government providing for a distribution of powers between the legislative, executive and judicial departments, it is of vital importance that no one department unduly interfere with or hinder any other department while the latter is acting or assuming to act within the scope of the particular powers reserved to it."

We have determined it is the duty of the office of the governor to oversee the 1122 program. Therefore, if the governor, through an executive order, places a moratorium on the 1122 agreement indicating the State of Louisiana is no longer "willing to do so ...," the order may not be set aside by a coordinate branch of our state government.

Because the decision to order a moratorium suspending the contractual obligations of the State of Louisiana with the United States Secretary of Health is not subject to limitation or control from the other government branches, no judicial review can be obtained. ⁵ Specifically, it is a well recognized principle of law a statute such as the LAPA can not adversely affect authority granted pursuant to our state constitution. See La. Consumers' League, Inc. v. La. Public Serv., 351 So.2d 128, 131 (La.1977), wherein it was held: "This constitutional grant of rule-making power to the Commission precludes the legislature from enacting statutes which would restrict the Commission's ability to adopt its own rules, regulations, and procedures. Accordingly, the rule-making provisions of the Administrative Procedure Act are not applicable to the Commission." Surely, the constitutional grant of power to our Governor must be of comparable significance. ⁶

II. JUDICIAL REVIEW OF APPROVED APPLICATIONS # 5011 and # 5013

In the same July 30, 1984 letter to Mr. Harvey Fitzgerald which instituted the moratorium, Governor Edwards directed Mr. Fitzgerald to approve eight applications, two of which were # 5011, the Lafayette Nursing Home, and # 5013, the Pineville Nursing Home. ⁷ Subsequently, certificates of approval were granted these eight applications by the Designated Planning Agency (DPA) of the DHHR.

It is the contention of the plaintiffs the grants of the certificates of approval which are the subject matter of this case were invalid for several reasons. The plaintiffs allege judicial review may be sought to discern this invalidity. We note the plaintiffs are...