Slaughter v. Dobbs
| Decision Date | 13 January 2022 |
| Docket Number | 3:20-CV-789-CWR-FKB |
| Citation | 579 F.Supp.3d 842 |
| Parties | Charles SLAUGHTER, Plaintiff, v. Dr. Thomas E. DOBBS, in his official capacity as the Mississippi State Health Officer, Defendant. |
| Court | U.S. District Court — Southern District of Mississippi |
Aaron Randall Rice, Mississippi Justice Institute, A. Seth Robbins, Watson & Jones, PA, Jackson, MS, for Plaintiff.
Stephen F. Schelver, Mississippi Attorney General's Office, Jackson, MS, for Defendant.
Before Carlton W. Reeves, District Judge.
Carlton W. Reeves, United States District Judge This case is a constitutional challenge to Mississippi's Certificate of Need ("CON") program. Under consideration are a set of laws that require health care facilities to apply and receive a state-issued CON before opening, expanding, relocating, changing ownership, or even acquiring major medical equipment. Also at stake are 40-year-old moratoria which bar the issuance of CONs to certain new health care facilities, particularly those that offer at-home health care services.
From 1985, three years after the creation of the moratorium, to 2014, the Mississippi State Department of Health reports that demand for at-home health services tripled. Amidst the COVID-19 pandemic, agencies offering these services have taken on critical importance as many of us seek alternatives to hospitals, nursing homes, and other care facilities that increase the risk of exposure to the virus. To protect ourselves and our loved ones, and in our collective effort to stop the spread, some of us turned to agencies like those at issue in this case.
Plaintiff Charles Slaughter alleges that the CON regime, including the moratoria, violates the equal protection and substantive due process clauses of the United States and Mississippi Constitutions. Specifically, he claims that the regime harms Mississippians, protects monopolies, and worsens the very goals it claims to advance. For support, he relies on 40 years’ worth of research finding that CON laws stifle innovation in the health care industry and merely protect established companies from competition.
Defendant Mississippi State Health Officer Dr. Thomas Dobbs has filed a Motion for Judgment on the Pleadings. Intervenor-Defendant Mississippi Association for Home Care has filed a Motion to Dismiss. Defendants stress the deference due to legislative choices and urge judicial restraint. As discussed below, however, defendants misconstrue the standard of review applicable at this juncture. After considering the Complaint and Answer , relevant pleadings, and applicable law, the Court concludes that for now, plaintiff's claims may proceed to the merits stage.
Charles Slaughter is a licensed physical therapist who owns a physical therapy clinic in Jackson, Mississippi. In the wake of the COVID-19 pandemic, he hoped to expand his business and offer in-home physical therapy to homebound patients. He cannot. Even if he were able to successfully apply and meet the requirements for approval of a CON, Mississippi has had a moratorium on issuing CONs to new home health care businesses for the past 40 years. Hence, this constitutional challenge.
Defendant Thomas Dobbs is the head officer of the Mississippi State Department of Health (Health Department), as appointed by the Mississippi State Board of Health (The Board). The Board and Health Department implement rules and regulations related to public health, and review and recommend legislation regarding the same. They also administer the CON program.
Intervenor-Defendant Mississippi Association for Home Care (MAHC) is a non-profit whose members are licensed home health agencies that serve Mississippians. Absent intervention, MAHC claims, their long-established economic interests as CON holders, as well as care to indigent patients, would be impaired.
By way of background, CONs were a national phenomenon of the 1970's. The National Health Planning and Resources Development Act of 1974 conditioned federal funding upon states adopting CON programs that met federal guidelines. See National Conference of State Legislatures, Certificate of Need (CON) State Laws (2021), https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx. In 1979 the Mississippi legislature, like many other states, adopted CON laws. See generally Miss. Code Ann. § 41-7-171 et seq.
By 1982, every state except for Louisiana had implemented some version of a CON program. See National Conference of State Legislatures.
In 1987, however, Congress repealed the law. Id. Since then, widespread scholarly and government research has admitted that the experiment was misguided. See Complaint at 70 n.1 (collecting research). Specifically, CONs are ineffective in achieving the desired outcome: less expensive, more accessible, and better-quality health care. Still, today 35 states retain CON laws. See National Conference of State Legislatures.
The Board and Health Department, the agencies that administer the CON program, disagree with the research consensus. Citing the State Health Plan, they claim the CON regime is designed to "prevent unnecessary duplication of health resources; provide cost containment; improve the health of Mississippi residents; and increase the accessibility, acceptability, continuity and quality of health services." They review the CON program annually and have recommended it continue.
To understand the parties’ positions, an overview of the CON application and approval process is helpful. It is lengthy and costly, and ultimately the process can result in what is essentially a trial with attorneys, consultants, exhibits, and written motions. Any "affected persons," including current home health providers, can oppose the application. After the proceeding, the Board and Health Department evaluate whether the applicant has demonstrated need based on several factors, including 16 criteria (e.g. , "economic viability," "consistency with the state health plan," and "access by health professional schools") as well as a regional formula to define "need."
Even so, there is a categorical ban on certain new facilities applying for CONs at all. In 1982, the predecessor to the Health Department determined that no new home health care agencies were needed and issued an administrative moratorium on their licensure. Docket No. 7-1, 1982-87 Health Plan , at 282. During the subsequent legislative session, the administrative moratorium was codified into state statute. It was expanded in 1986. This moratorium, or some version of it, has remained in place for 40 years. Four decades! And, since this moratorium was imposed, the number of home health patients has increased by at least 194 percent. Now, one can only enter the market if a current operator is willing to sell their CON.
The Board of Health annually reviews laws pertaining to public health and can recommend the moratoria be lifted. One moratorium related to adolescent psychiatric beds was lifted in March 2021. Minutes from the Board's quarterly meeting have not revealed any such recommendation as to at-home health facilities, and the CON program has been revisited and amended as recently as 2020.
Guidry v. Am. Pub. Life Ins. Co. , 512 F.3d 177, 180 (5th Cir. 2007) (citations and quotation marks omitted).
"This inquiry focuses on the allegations in the complaint, not whether plaintiffs have pleaded sufficient facts to succeed on the merits." Porter v. Valdez , 424 F. App'x 382, 385 (5th Cir. 2011).
Plaintiff's federal due process and equal protection claims are subject to rational-basis scrutiny.1 See F.C.C. v. Beach Commc'ns , 508 U.S. 307, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993). Under this standard, Mississippi is afforded great deference. Those attacking the rationality of a legislative decision have the burden of negating "every conceivable basis which might support it." Id. at 315, 113 S.Ct. 2096.
That is not to say that rational-basis review is a rubber stamp. "Between 1970 to 2000, applying rational-basis review, the Supreme Court struck down at least a dozen economic laws as violating either the Equal Protection Clause or the Due Process Clause." Tiwari v. Friedlander , No. 3:19-CV-884-JRW-CHL, 2020 WL 4745772, at *6, 2020 U.S. Dist. LEXIS 146248, at *13 (W.D. Ky. Aug. 14, 2020) (collecting cases). The Fifth Circuit and district courts in this Circuit have also struck down laws applying the same. E.g. , St. Joseph Abbey v. Castille , 712 F.3d 215 (5th Cir. 2013).
In a recent application of rational-basis scrutiny, the Fifth Circuit held that courts need not take a state's justifications at face value where they seem implausible or impermissible. See id. at 226. "[T]he great deference due state economic regulation does not demand judicial blindness to the history of a challenged rule or the context of its adoption nor does it...
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