Citrus County Hospital Board, etc. v. Citrus Memorial Health Foundation, Inc., etc.
150 So. 3d 1102
| Fla. | 2014Background
- 1949: Florida Legislature creates Citrus County Hospital Board to operate a public hospital in Citrus County.
- 1990: Hospital Board leases hospital to Citrus Memorial Health Foundation under section 155.40 to enable public-private operation.
- Contracts (lease and hospital care) run through 2033 to permit Foundation management, sovereign immunity, and favorable Medicaid rates.
- Foundation is a separate nonprofit; Hospital Board historically controlled Foundation’s board but Foundation later amended its articles to reduce Board control.
- 2011: Legislature enacts chapter 2011-256 to increase Hospital Board oversight and necessitate accountability measures to preserve sovereign immunity.
- Section 16 of the act adds Board-approved governance, budgeting, audits, and dispute procedures, effectively altering Foundation’s contractual framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Foundation contracts fall within the Contract Clause | Foundation asserts protections from impairment. | Hospital Board and State contend no protection because Foundation is public/quasi-public. | Contract Clause applies to Foundation contracts. |
| Whether the 2011-256 impairment is unconstitutional as applied | Impairment by rewriting contracts unjustified. | Legislature may regulate public entities for oversight. | Section 16, as applied, is unconstitutional. |
Key Cases Cited
- Traylor v. State, 596 So.2d 957 (Fla. 1992) (contracts clause applies to individuals and corporations against government)
- State Farm Mut. Auto. Ins. Co. v. Gant, 478 So.2d 25 (Fla. 1985) (contract clause protection to corporations)
- O’Malley v. Florida Insurance Guaranty Ass’n, 257 So.2d 9 (Fla.1971) (distinguishes public vs private corporations; governing status matters)
- Pan-Am Tobacco Corp. v. Dep’t of Corr., 471 So.2d 4 (Fla.1984) (state contracts should be valid when authorized by statute)
- Marion Mortgage Co. v. State, 145 So.2d 222 (Fla.1932) (charter contract cannot be impaired by Legislature)