Dialysis Solution, LLC v. Miss. State Dep't of Health
| Docket Number: | 2008-CA-02073-SCT Linked Case(s): 2008-CA-02073-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 02-18-2010 Opinion Author: Graves, P.J. Holding: Reversed and rendered |
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| Additional Case Information: |
Topic: Certificate of need - Expiration of CON - Authority to grant extensions - Section 41-7-195(1) Judge(s) Concurring: Waller, C.J., Carlson, P.J., Dickinson, Randolph, Lamar, Kitchens, Chandler and Pierce, JJ. Procedural History: Bench Trial Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES |
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| Trial Court: |
Date of Trial Judgment: 12-08-2008 Appealed from: Hinds County Chancery Court Judge: J. Dewayne Thomas Disposition: The trial court ruled in favor of the defendants in regards to 1) Whether, pursuant to Section 41-7-195, the MSDH has the authority to grant an extension of a CON after the date of expiration specified in the CON; and 2) whether, pursuant to Section 41-7-195, the MSDH has the authority to grant multiple extensions of a Certificate of Need. Case Number: G2007-1990 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Dialysis Solution, LLC |
BRYANT WANDRICK CLARK, ROBERT GEORGE CLARK, III |
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| Appellee: | Mississippi State Department of Health, Dr. Mary Currier, In her Capacity as the Executive Director of the Department of Health; State of Mississippi and RCG-Montgomery County, LLC | BEA McCROSKY TOLSDORF, BARRY K. COCKRELL | ||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Certificate of need - Expiration of CON - Authority to grant extensions - Section 41-7-195(1) |
| Summary of the Facts: | A Certificate of Need was issued to RCG-Montgomery County, LLC, to develop a kidney-disease treatment facility in Montgomery County. While the CON for the RCG ESRD facility was issued in December 2004, for two significant reasons, RCG did not commence development and construction of the project until approximately September 2007. First, approximately eight months after the CON was issued, Hurricane Katrina devastated the Mississippi Gulf Coast. Second, in 2005, Renal Care Group, Inc. (RCG’s parent company), negotiated and executed an agreement to be acquired by Fresenius Medical Care Holdings, Inc. Renal Care Group, Inc., announced the definitive agreement on May 4, 2005, but RCG could not move forward with the development of the ESRD facility in Montgomery County until federal regulatory approvals were secured regarding the transaction. In 2006 (about eight or nine months before RCG began construction on its dialysis facility), the Mississippi State Department of Health received a CON application for the establishment of a twelve-station ESRD facility in Montgomery County from Dialysis Solution. Ten days after the MSDH received a CON application from Dialysis Solution), RCG filed its first request for a six-month extension of the CON that it had been issued. The State Health Officer granted the requested six-month extension. RCG requested a second six-month extension. The State Health Officer granted RCG this second extension, making it the second official six-month extension granted of four official six-month extensions the State Health Officer ultimately granted before the project was completed. Dialysis Solution filed a Complaint for Declaratory Judgment and Injunctive Relief in chancery court. The trial court issued an Order denying Dialysis Solution’s Motion for Temporary Restraining and/or Preliminary Injunction. The trial court issued a Final Judgment in favor of the defendants, and Dialysis Solution appeals. |
| Summary of Opinion Analysis: | Dialysis Solution argues that the MSDH does not have the authority to grant an extension of a CON after the date of expiration specified in the CON. Dialysis Solution argues that, once the stated duration of the CON has lapsed, the CON is void, and the MSDH must reissue the CON in accordance with CON statutory provisions. Therefore, Dialysis Solution reasons, since the expiration date of RCG’s CON was December 16, 2005, RCG’s CON became void on that date, and the MSDH did not have the authority to grant any of the six-month extensions that it granted to RCG after that date. The issue is whether the MSDH exceeded its power and violated section 41-7-195(1)-(2) of the Health Care CON Law when, on January 18, 2007, it granted RCG’s January 8, 2007, request for a six-month extension, this request having been made one year and twenty-three days after the date of expiration specified on RCG’s CON. Section 41-7-195(1)-(2) states that “[a] certificate of need shall be valid for the time period specified therein” and “[a] certificate of need shall be issued for a period of twelve (12) months, or such other lesser period as specified.” The statutory section makes clear that, unless the CON holder requests an extension of the CON before the time period stated in the CON lapses, the CON will expire and become void at the end of that specified period. Here, the MSDH issued RCG a CON on December 16, 2004, set to expire twelve months later on December 16, 2005. Not until January 8, 2007 – one year and twenty-three days after the expiration date of RCG’s CON – did RCG apply for an extension of this CON. By January 2007, RCG’s CON clearly had expired, and the MSDH did not have the authority to contravene section 41-7-195 and revive RCG’s expired CON by issuing RCG a six-month CON extension. After the stated expiration of a CON, the MSDH must reopen the CON application and review process as provided by statute and regulation. The MSDH’s own Certificate of Need Review Manual supports the contention that a CON becomes void on the expiration date stated in the CON (unless an extension of the CON is timely requested). An agency cannot grant itself broader authority than the Legislature gave it. Therefore, the MSDH did not have the authority to grant RCG an extension of its CON after the CON had expired. Because Dialysis Solution’s original action was timely filed and it promptly prosecuted its appeal, RCG’s completion of its dialysis facility following the commencement of the lawsuit does not legitimate the act of building a facility while not possessing a valid CON. RCG’s CON is void by operation of law. If the MSDH still wants to issue a CON for an ESRD facility in Montgomery County, it will have to reopen the CON application and review process as provided by statute and regulation. |
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